How does the total cost of ownership compare to on-prem solutions?

How does the total cost of ownership compare to on-prem solutions?

Purchasing Kinetic Mobility through a subscription-based SaaS model offers a myriad of benefits over traditional on-premises systems including lower upfront fees and spreading the total cost of ownership over time.

To calculate and compare costs, it’s important to look at the total cost of ownership (TCO) which reflects all direct and indirect costs and tradeoffs during the lifetime of a product to help determine if the service is worth it, not just up front, but over its projected lifetime.

The following are key areas to consider when calculating TCO:

  • License/Subscription Fees

    Traditional on-prem solutions, require a high up-front fee for a perpetual license. Additional license fees may be incurred yearly if new users or applications are added.

    A SaaS offering is based on recurring subscription fees billed at an agreed upon cadence, for instance monthly or annually, with discounts available based on volume and contract term.
  • Installation & Set Up

    On-prem systems require an initial set-up fee that covers things like installing the software and configuring the database. Additional fees may be incurred if you undertake a major upgrade down the road.

    With a Kinetic SaaS system, all installation and upgrade fees are included in your subscription fee.
  • Maintenance & Support

    Systems installed on-premises require an annual maintenance contract for support, ongoing updates, and patches. These contracts are typically 15% to 22% of the initial license cost.

    In a SaaS model, all standard support, updates, and patches are included in your subscription price.
  • Hardware

    All systems have specific hardware requirements that must be maintained for optimum performance. In an on-prem system, it is the customers responsibility to maintain, upgrade, or purchase new hardware to support system requirements such as application and database servers. Depending on the requirements, servers can range from $12,000 to $25,000 or more and typically need to be replaced every 4-6 years.

    In a SaaS system, you will not need to buy or maintain any server hardware.
  • Lobar/Staffing
    One of the most important yet challenging factors to analyze in calculating total cost of ownership is the number of person-hours required to maintain the system. This includes things like application and database updates and server maintenance/upgrades.

    This is of particular importance as many government agencies lack the internal resources to execute this in house, leaving their systems at risk or requiring costly IT consultants.

    In a SaaS system, this is all handled by the vendor.