The total cost of ownership of the on demand model is probably the most compelling feature. Simply put – it requires less investment, less on site skill sets and no other software license purchases.

You simply pay for what you use.

Cost Components of Enterprise Software Economics

One of the great historical deceptions has been the total cost of enterprise software. As buyers go through long procurement cycles, it often is not clear what the total cost of ownership is for enterprise software by the time it is live and being used. In most cases it is substantially higher that expected.

The Software as a Service model again makes the economics completely transparent. The cost buckets of each of the components of enterprise software are described below coupled with a side by side comparison with traditional software solutions.

Average savings between an On Demand Solution and a traditional on premise solution is between

30%-90%
Less than on premise models

License

Tradtional Software requires the upfront purchase of a license. This is usally a substantial amount and once you have paid, it is difficult to retrieve your money, if the system doesn’t deliver to your expectations. There is no accountability with this model.

On demand Subscription Pricing includes everything you need. Based on a per user per month, you pay for exactly what you need. If the software is not performing as advertised, you don’t renew your subscription. It cant be more accountable than that.

Support and Maintenance

Traditional software usually requires a 15-20% annual support and maintenance cost. This is additional to the license and very quickly adds to the total cost.

On demand models include basic support in the pricing. There is no additional cost for standard support and maintenance.

Implementation Services

On Premise solutions have large implementation costs with consultants required on site for extended periods of time.

On Demand software is rapid to configure and can be done entirely remotely if you wish – the cost is typical 50 -80% less for implementation costs versus a traditional software deployment.

System Administration, DBA and IT Support

– no hidden costs. Unlike traditional Enterprise Software, you won't be surprised later by hidden people and technology costs that can quickly add up to as much as ten times the original licensing fees - more on.. eliminate hidden costs.

Other Software

Software as a Service (SaaS) is gaining traction in a number of enterprise application areas and making quick believers out of previous skeptics. Also known as on-demand or

Hardware

hosted applications, SaaS is changing how companies pay for, implement, and run their software applications. Perhaps most importantly, SaaS is accelerating companies’ return

Upgrades

on investment, enabling them to make automation enhancements even in the face of internal

IT resource constraints, and making it possible to solve business problems in much shorter time spans.

Comparison Chart