Here is a great white paper with a comprehensive look at the Total Cost of Ownership (TCO) analysis any decision maker should complete before making a choice between a SaaS or a traditional software deployment.
The key cost drivers for any software implementation are the cost of the software application, the hardware required to run the application and the people services required to design, deploy, manage, maintain and support the application.
> Traditional software pricing is limited to the cost of the software application, in most cases an upfront fee in exchange for a perpetual user license. It is up to the customer to determine the cost of the hardware and the people services.
> SaaS applications are charged on a subscription basis. The subscription fee includes the cost of the software application, the hardware and the people services.
This difference in pricing models can make an apples-to-apples TCO comparison “tricky”.
Software and hardware costs are well understood but the people resources associated with traditional software applications are often underestimated or omitted in a TCO analysis. As a result, the usage driven subscription cost of SaaS applications can seem to be the more expensive solution over a multi-year period. However, when these people resources are correctly associated, deploying a SaaS application becomes – in many cases – the more cost effective option.
This white paper helps in better understanding all the different cost factors and includes a TCO calculation for you that will help influencers and decision makers to better estimate the true TCO of a SaaS versus a traditional software deployment. The ultimate goal of this paper is to educate the reader that in some cases traditional software applications remain the right choice, but in other cases deploying SaaS applications provide a better business case.