For many organizations, the explosive growth in available AI technologies has opened new paths of innovation and transformation that would’ve been unimaginable just a few years ago. In many ways, AI tools can make the journey between imagination and implementation quicker and easier than ever, but in the minds of many decision makers, the steps to take to embrace AI may not be obvious. Cloud AI services can offer a way forward for some businesses, but they won’t be the best solution for many organizations and situations. Practical concerns about performance, security, and the ongoing and sometimes unexpected costs associated with cloud AI sprawl can bog down some AI projects before they start. A detailed, real-world total cost analysis of AI solution options can help visionary leaders move ahead with confidence.
To provide companies with reliable AI solution cost data, we conducted an in-depth analysis of the five-year TCO of two solutions: an on-premises, validated GenAI environment from Dell AI Factory infrastructure—utilizing PowerEdge XE9680 and PowerEdge R660 hardware and Red Hat OpenShift—and a similar cloud offering from AWS SageMaker. We accounted for each solution's infrastructure costs and such operational factors as deployment services, support, and data center resources. Dell AI Factory customers have the option to choose between two payment models: a traditional capital expenditure (CAPEX) model or a managed, subscription-based option through APEX Infrastructure. We examined the costs associated with both alternatives.
We found that the on-premises Dell AI Factory solution we modeled was substantially more cost-effective than the AWS SageMaker solution, reducing five-year TCO by 33 percent through Dell APEX Infrastructure subscriptions and 38 percent through an upfront CAPEX payment. In addition, the Dell AI Factory solution included Red Hat OpenShift licenses, which provide customers with additional functionality and features that can help support successful AI app development and deployment. Key such features include self-service scaling, single-console management, and hardened security, among others.
Our analysis suggests that businesses looking to fast-track AI integration could benefit from considering an on-premises Dell AI Factory solution—either purchased upfront or over time through Dell APEX Infrastructure. With Dell AI Factory, businesses can accelerate AI innovation, reduce long-term expenses compared to leading cloud alternatives, and confidently deploy advanced AI workloads—all while maintaining control over their infrastructure, data, and long-term project costs.
To learn more about our in-depth GenAI solution TCO comparison, check out the report below.
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