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TCO for SaaS CPM Solutions Lower Than On-Premise Solutions: Study

By Anil Sharma
TMCnet Contributor

New research study on corporate performance management or "CPM" solutions confirms that the total cost of ownership "TCO" for SaaS (News - Alert) solutions is significantly lower than that of on-premise solutions.

The report, by technology analyst firm Hurwitz & Associates, finds that the four-year TCO of Adaptive Planning'sSaaS solution is as much as 77 percent lower than that of comparable mid-market CPM solutions.

'The TCO Advantages of SaaS-Based Budgeting, Forecasting, and Reporting,' examined the economic benefits of the SaaS model, focusing on CPM solutions with functionality geared to midsize companies.

The technology analyst firm interviewed a cross-section of companies using SaaS solutions from Adaptive Planning, as well as on-premise CPM solutions from mid-market vendors including Clarity (News - Alert) Systems, Longview Solutions, and Prophix.

According to the report, the cost advantages of SaaS solutions are significant across all deployment sizes evaluated, ranging from 10 to 100 users.

In addition, the report said that in the SaaS model, application software costs such as subscription fees account for roughly 62 percent of the total solution cost. In the on-premise model application software costs including the upfront license fees and annual maintenance fees, comprise just 17 percent of the total solution cost.

Moreover, the SaaS model also has lower costs associated with application implementation and support, and user training.

"These findings clearly point to a sizable TCO advantage in favor of Adaptive Planning's SaaS solution compared with on-premise alternatives,' said Sanjeev Aggarwal, partner at SMB Group and Hurwitz & Associates.

Aggarwal also noted that via the SaaS model, companies of all sizes can gain access to enterprise-class solutions without incurring large upfront costs, or having to hire expensive IT staff for initial implementation and ongoing management.