When choosing an IT service management (ITSM) solution, many companies struggle to determine which deployment approach is better – on-premise or SaaS. But, as more and more companies choose the SaaS method, its benefits – and the added value it delivers over on-site solutions – are coming to light.
There are many areas in which SaaS ROI is far greater than that offered by its on-premise counterpart. Over the next several weeks, we will publish a series of posts, each highlighting one of those areas in detail, to explain why SaaS IT service management ROI is higher, making it the ideal choice for your business.
This week, we’ll discuss the most obvious place where SaaS ITSM is more cost-effective than on-premise IT service management – lower licensing fees.
Lowering On-Premise ITSM License Costs
It’s no secret that the cost of getting started with an on-premise IT service desk tool can be astronomical – averaging as much $1,800 for each service desk user. That means, for a company with an IT support team made up of 20 professionals, initial licensing alone would total $36,000.
But, there are other fees to consider. Many on-premise vendors charge their customers extra to provide end users with access to the system’s self-service capabilities – sometimes as much as 10 percent of the price of a full license (or $180). Let’s assume that the average company has a ratio of 50 employees to every help desk staff member. Since a vendor would likely offer substantial discounts as the number of end users scales up, let’s estimate a cost of $50 per license for this 1,000-employee company. That would result in a whopping $50,000 in additional licensing charges!
There is no reason why you should pay for your users to access the service portal. That’s why SaaS ITSM vendors typically provide this functionality absolutely free. So, end users can use the self-service capabilities, open a new incident or order services from the service catalog, and check the status of their requests, at no additional cost.
Perpetual is a Thing of the Past – Long Live Subscriptions!
Due to the nature of SaaS, the upfront capital outlay is significantly less when compared to on-premise tools. There are no huge, upfront, perpetual license fees, and you pay for your SaaS service every year. This also gives you the flexibility to increase or decrease the number of licenses you own based on your changing business needs.
In our next ROI post, we’ll talk about the differences in on-premise and SaaS ROI as it relates to infrastructure requirements.