All IT asset management (ITAM) tools are valuable, helping users to more effectively monitor, control, and manage their increasingly diverse and multi-faceted technology environments. And while ITAM applications delivered via a software-as-a-service (SaaS) or on-demand model are growing in popularity, many companies are still using on-premise ITAM tools.
What these organizations don’t take into consideration is just how much these on-site solutions may be costing them. In fact, industry research shows that an on-premise ITAM tool can cost more than three times as much as its hosted counterpart in the first year alone. Here’s how to identify these hidden costs:
High Initial Expenditures
Firms who purchase on-site ITAM must lay out tens of thousands of dollars in licensing fees upfront – which can drain shrinking technology budgets, and make it harder to get executive sponsorship for an IT asset management project. On the other hand, acquiring and deploying a SaaS-based ITAM system can cost a 500-employee company as little as $10,o00 annually when procured as a subscription service. This makes on-demand ITAM the far more budget-friendly approach.
The annual subscription allows companies to pay only for what they need today. If technology requirements change due to a growth or decline in assets, the subscription can be adjusted accordingly the next year. But with on-premise tools, firms must commit to paying an upfront license fee, with no way to recoup their investment if they have lesser needs or fewer devices down the road.
In other words, because SaaS ITAM offers greater flexibility, better alignment of investments with needs, and “pay as you go” subscriptions, it is substantially more economical that on-premise systems.
On-premise ITAM vendors typically charge for annual maintenance and upgrades. These fees average about 15 percent of total initial license costs. So, for a company with 500 PCs, this additional expense could be somewhere in the neighborhood of $4,200 each and every year – on top of the tens of thousands of dollars that have already been spent on licenses, hardware, and implementation.
When budgeting for an in-house ITAM system, many companies forget to quantify the effort involved with patching bugs or upgrading the on-premise tool, including testing the new version and rolling it out across the company.
With SaaS-based ITAM tools, there are no upgrades to worry about. As with Gmail and other hosted applications, the on-demand ITAM vendor takes care of all extensions and enhancements behind the scenes. And the biggest benefit is that when new functionality becomes available, gaining immediate access to those features involves absolutely no effort on the client’s part (with the exception of any customization that may be needed). You will never have to upgrade your software again.
An on-premise ITAM solution requires the purchase of extra hardware, adding approximately $5,000 per application server to the already high initial costs. Additionally, implementation, system integration, and training can put a strain on scarce IT staff resources. For example, an on-site IT asset management solution can take at least 40 hours to install and roll-out. With the average IT technician earning around $33 per hour, according to Salary.com, that can result in further expenses of more than $1,300.
By comparison, SaaS-based IT asset management systems can be implemented in just a fraction of the time – as little as half a day. Companies who choose on-demand ITAM also eliminate the need to buy new equipment to support the environment.
Hidden Hardware Costs
There are also other costs to consider, such as data center capacity, server OS and database licenses, database back up tools, storage and backup costs, and the time IT staff will spend conducting routine administration. These costs can quickly add up, further chipping away at human and financial resources.
But with SaaS ITAM, upgrades, ongoing maintenance, and enhancements are all the responsibility of the service provider, and are all included in the subscription fee. Additionally, since the provider administers all hardware and related data, any associated costs are incurred by them, not the client. So, there are never any “surprise” costs above and beyond the agreed upon per-user price.
Better Service Levels
Using a SaaS-based ITAM service instead of an on-premise ITAM tool lets IT staff focus on more critical priorities and projects, instead of overseeing day-to-day operation of yet another IT application. Because running the ITAM service is the sole focus of the provider vendors can offer a great and transparent service level.
About Kyle Shepard
Kyle is a Senior Manager of the Customer Success team for ITSM at SolarWinds. He works directly with customers to provide ongoing support in service management strategy for their evolving goals. He speaks on webinars and other educational resources in ITSM. He also played college lacrosse.
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