As Cloud technologies continue to evolve, more and more software buyers are seriously evaluating software as a service (SaaS) solutions against on-premise offerings. While there are many factors that influence which deployment model is best for any particular business (e.g., ability to manage IT internally and speed of deployment) the cost of the system is often a key factor. But comparing the true cost of a Cloud-based system against an on-premise system can be time-consuming and is often a complex undertaking.

For instance, most buyers understand that on-premise licenses are typically purchased with a large, upfront investment and SaaS licenses are purchased for a relatively cheaper subscription price. But many forget to consider the total cost of ownership (TCO) of their investment. That is, they don’t look beyond the licensing costs to consider how other factors such as the need to customize the software and integrate it with existing applications can influence the TCO of their software purchase.

Even then there are intricacies like maintenance and support and training requirements that can make creating an apples-to-apples comparison of the TCO on-premise and Cloud software difficult. If you’re not a seasoned veteran in modeling all these costs, comparing them can become overwhelming.

To help buyers ballpark the true costs of each software model, Software Advice--a research firm that reviews and evaluates enterprise systems--created an interactive TCO calculator that software buyers can use to compare SaaS against on-premise software over a 10-year ownership period.

The calculator models annual and cumalative costs over this time period and shows buyers at which year of ownership the TCO of a SaaS system will equal that of an on-premise solution, based on user inputs. Although the data comes pre-populated with an example case, users can override every value to see the impact that changing any particular value will have on the TCO as a graph at the top of the calculator automatically refreshes after each update.

While the calculator is useful for getting you in a ballpark, it’s important to note that any business will still have to perform their due diligence to come up with an accurate figure that reflects their unique needs and situation. And there are several influencing factors (e.g. organic business growth) that no general calculator can accurately model. In any case, it’s worth checking it out to get an idea of which system seems right for your business. Check it out here.

We offer solutions in Hosted Dynamics GP and On-Premise Dynamics GP. We can help your organization make the right decision and determine the best course of action, taking all costs and factors into account.

by Websan Solutions

April 3, 2013 by Andrew King, WebSan Solutions, Inc.

Email | Print

Ask The Author

Tags: Cloud Based System, Cloud software, Cloud Tech, cloud technology, compare ERP software, on-premise, SAAS, SaaS system, TCO, Total Cost of Ownership
Posted in Accounting Software Research, Accounting Software Selection Tips, Compare Accounting Software Packages, ERP Software Information | 1 Comment »

More Posts By Andrew King, WebSan Solutions, Inc.

1. Support for SQL Server 2008 Is Ending… What Should I Do?
2. Five Reasons Why You Need A Payroll Software
3. Should you hire a bookkeeper or an accountant?
4. 3 Reaons Why You Should Implement an ERP System
5. Transform The Way Your Team Sells Series: Relationships At Scale

Related Posts

1. Microsoft Dynamics Reporting can lead the way with your accounting team today!
2. The Difference Between Hosted and Cloud Computing for ERP Software
3. How Can Microsoft Dynamics GP and Office 365 Enable Better Systems For Growth in 2018?
4. The Differences in Microsoft Dynamics Solutions
5. Game Changing Trend 3: The “Internet of Things”