Given the state of the worldwide economy, it is timely to now to review how much money your company can saved with Software-as-a-Service. Why is Software as a Service (SaaS) so popular? Is your company making budget reductions, but want to keep providing exceptional levels of customer service and support? SaaS can help you reduce costs while giving your team a product that is generally easier to learn and use with minimal training and not require any IT resources to support. Every time you go to your IT department to ask for assistance, they probably say they have too many project that will directly impact revenue so they cannot help your with customer service software selection, deployment and ongoing maintenance. With Software-as-a-Service (SaaS), you do not need resources from the IT department to get your project started and keep going.
It's the economics stupid!
Look at the Total Cost of of ownership for required hardware and software for a typical midsized Customer Service department, Call Center or IT help desk. These costs do not consider the cost of the actual customer service, call center or IT help desk software.
It's Green and Cheap!
Also, do you really need to have more servers in your company data center burning up power for server operation and cooling. It's an inefficient use of energy. Ask a SaaS vendor if they use a multitenant architecture. Many Software-as-a-Service (SaaS) applications are architected from the start as pure web applications and have multiple customers sharing the same underlying server infrastructure. This saves power and cooling resources by leveraging and sharing computing infrastructure. Smart CIOs and VPs of Customer Service are planning for this today.
Take a look at these numbers. Are you surprised?
GARTNER GROUP ESTIMATES- 3 YEAR INFRASTRUCTURE & ADMINISTRATION COSTS OF OWNING 2 SERVERS
3 Year Infrastructure & Administration Costs of Owning Servers $259,100
- Server Support & Maintenance $208,500
- Server Hardware & Software $50,600
1. Database Server required
One server at minimum is required to run applications. DB server cost estimate is $10,000 for hardware. Plus annual maintenance contract and power 40% of cost per year. Use $10,000 x 40% x 3 years = $12,000
2. Database Licenses Required
Microsoft SQL @ $5,500 processor license x 2 processors is $11,000. Plus annual software maintenance is 20%..$11,000 x 20% x 3 years =$6,600
3. Web Server required
A web server is required for best performance. Total Web Server cost estimate is $5,000 for hardware. Plus annual maintenance contract and power cost is 40% of cost per year. Use $5,000 x 40% x 3 years = $6,000
4. General Server Administration (O/S, Patches, Virus, BIOS, HD...)
Servers and O/S require continuous maintenance. Gartner Group estimates 65 hrs/year @ $150/hr. per server is $9,750 x 2 servers x 3 years is $58,500.
5. Daily Incremental and Full Weekly Back-up
Your IT department either performs or must automate data backup. Back-up media storage process and costs associated with off-site storage. Gartner Group estimates $10,000/yr. per server x 2 servers x 3 years is $60,000.
6. Required Application & Database Administration
Database and application requires continuous monitoring for performance and storage. Gartner Group estimates 50 hrs/year per installation @ $200/hr. is $10,000 x 2 servers x 3 years is $60,000.
7. Man-hours required for upgrades
How many total IT man-hours are required to implement an upgrade (Backup, install)? Gartner Group estimates average upgrade requires 80 hrs @ $125/hr is $10,000 x 1 time/yr. x 3 years =$30,000. This does not included user training.
Other costs to consider if you want to own Customer Service, Call Center and IT Help Desk software:
8. Up-front configuration required
Configuration requires outside consulting, significant time and input from your organization. As your needs change, this is an ongoing cost.
9. Frequency of incremental upgrades (Months)
How often does the vendor distribute upgrades? What is your required process to deploy an upgrade?
10. User Training
How much additional administrator and user training is required to gain proficiency with a complex client server application deployed locally vs. an externally hosted application? Do you need to maintain programmers and Crystal Reports experts on staff?
Here is a great White Paper on the topic.
The title is "Saving Money with Software-as-a-Service". See https://www.givainc.com/white-papers/Save-Money-with-Software-as-a-Service-SaaS.htm