The True Cost of SaaS: Find Out How to Save Money

by Paul Petersen on April 3, 2017

3 minute read

Let’s explore the costs of SaaS, and offer some alternatives.

Monthly SaaS cost looks so reasonable, especially when you compare the one time cost of buying software, but here is what we know: by owning your CRM software you keep your system over 5, 7, and even 10+ years. The cost of a monthly subscription over many years can substantially add up.

This graph compares a 5-year life of a one time purchase with annual support renewed compared to the ongoing monthly fee. For five years software access costs are $18,000 less.

  1. Myth buster 1: SaaS providers advertise monthly but do not bill monthly.
  2. Myth buster 2: It’s less costly to get started. This is not true because SaaS providers require payment for the first year upfront. I can get started easily. You start the trial, upload some data (already doing the work), then you are committed.
  3. Myth buster 3: Someone has to migrate your data, create users and set up business rules. Are you a trained SaaS app administrator?
  4. Myth buster 4: It’s a SaaS secret that the SaaS providers have consulting staffs at rates often at the highest in the industry, often over $200 an hour.
  5. Myth buster 5: Most SaaS have full-time admins – not just someone who does it occasionally. I can start easy and integrate later. The reality: to integrate, your data has to be in their cloud. How are you going to get it there and keep it current?
  6. Myth buster 6: In our experience, most firms don’t end up doing it due to complexity and cost.
  7. Myth buster 7: One of the top requests we hear is for integration with accounting. With SaaS, I don’t need a server or network. However, you have to provide internet and network access to other applications and keep it up to date.
  8. Myth buster 8: Does your business run on only one application? While it is true that the SaaS app won’t require a lot, you still have to create back-ups for your other applications as well as security – so the savings here may be only storage, often a low-cost item. Many offer basic lower cost items to start but when you add opportunity management, customer service, etc., that requires additional monthly fees.
  9. Myth buster 9: You may have a quote for $25 a month, but the average user fee based on market feedback is $700-$1,000.
  10. Myth buster 10: There are costs for increased storage, emails, etc. over time.

This post originally appeared on GoldMine's Blog.

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