The Potential Savings
While the advantages of an on-demand IT Asset Management software listed so far are quite compelling, the following items provide the IT team with hard quantifiable benefits that are often needed to persuade the powers to be.
Lower Upfront Investment
Getting started with a SaaS IT Asset Management solution will cost much less than the initial purchase price of an on-premise package. On-demand IT Asset Management services can be subscribed to for a low service fee of just $20 per PC per year, with all maintenance, support, and administration included. For a company with 500 end-user desktops, the total cost would be as little as $10,000 annually.
In contrast, on-premise IT Asset Management would require a much higher upfront investment, with companies spending tens of thousands of dollars on the initial license purchase alone. For example, the license cost for an on-premise IT Asset Management solution can be as high as $57 per PC. For a company with 500 PCs, the application itself would cost $28,500.
Faster, More Cost-Efficient Deployment
On-demand ITAM can be up and running in a fraction of the time it takes to deploy an on-premise application. There is no hardware to purchase, install, provision, and test. Integrating the software with the rest of the organization’s IT environment and deploying it to end users is fast and easy. And because on-demand IT Asset Management solutions are Web-based, remote access is seamless—any user can utilize the application, from any location, even when not connected to the company’s network.
Companies that choose an on-demand IT Asset Management solution will also spend nothing at all on related hardware. This is compared to the cost of the application servers needed to operate an on-site IT Asset Management system. On average, the initial purchase cost of an application server is between $3,500-7,000, and an average server lifespan of 3 years.
Additionally, an on-premise solution requires implementation, system integration, and training that can span weeks, and require the dedicated assistance of valuable IT resources. Real-world studies have shown that an on-site IT Asset Management application can take at least 40 hours to implement. And, with the average IT technician earning $33 per hour (based on research conducted by Salary.com), these hours can result in additional expenses of over $1,300. In comparison, on-demand IT Asset Management solutions can be implemented in as little as a half a day, costing only about $130 to deploy.
Reduced Maintenance
With an on-premise ITAM solution, there are additional expenditures to consider, including the cost of annual maintenance and upgrades. These costs usually average 15% of the total license fees each year, translating to additional $4,275 for a company with 500 PCs.
There are a variety of other cost items involved in on-premise deployment, including additional operating system licenses, air conditioning to maintain optimal temperatures in server rooms, and database back up tools. These items, too, can add up to thousands of dollars each year. According to IDC, for example, the cost of powering and cooling a server alone is $0.50 for each $1 in server capital spending, increasing to $0.70 by 2010.
Presenting the Case for On-Demand ITAM
While the evidence outlined above clearly shows the on-demand IT Asset Management solution is far more cost-effective and offers more rapid and significant ROI than its on-premise counterparts, presenting these findings in a clear and concise manner is key to securing executive support.
The sample chart below displays all costs and savings highlighted in this paper. The previously mentioned industry standard numbers have used in these formulas.
Click on the image to enlarge
Click on the image to enlarge
Click on the image to enlarge
Conclusion
By substantially reducing the total cost of ownership, IT Asset Management solutions delivered on-demand can offer far greater value than on-premise applications. Furthermore, with a significantly lower upstart cost, the Software-as-a-Service delivery model helps organizations reduce the short-term cash flow burden and the risk associated with the project.
Using this white paper and framework to clearly spell out and quantify these cost differences, project leaders can present a persuasive business case for Software-as-a-Service IT Asset Management.
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