Benefits of a SaaS CMS: Lower Total Cost of Ownership
In our last blog post on adopting a SaaS CMS platform, we covered the accelerated speed-to-launch benefits, and now we’ll drill down into one of the biggest advantages it offers: providing a considerable lower Total Cost of Ownership (TCO).
Total Cost of Ownership is an estimate meant to help buyers and owners figure out the direct and indirect costs of a system or product. Or as Gartner defines it:
Gartner defines total cost of ownership (TCO) as a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time. For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses.
If an organization is looking for a solution to manage multiple websites, portals or other digital touchpoints across multiple markets, understanding the true TCO of its Content Management System (CMS) ought to be a priority.
The high, high costs of on-premise architecture
Prior generations of web content management systems ran on on-premise architectures, where individual software, hardware and networking infrastructures were typically deployed within regions, or even by different divisions or departments within a region.
A global marketing concern with a sizable digital presence in 10 different countries, for example, might need to have nearly as many (or sometimes more) on-premise installations to operate its sites, each supported by its own dedicated IT staff and digital marketing/content publishing team.
The additional costs involved in operating an on-premise architecture could include the up-front costs of the software and hardware, installation, software support, hardware support, a dedicated network, monitoring, security...and that’s only the start of it. Updating software and hardware involved a whole suite of additional expenses, too.
Plus, having those updates synchronized across multiple markets in order to maintain consistent digital experiences? The logistics are daunting, even for established global players, not least because the software and hardware configurations being used in different markets can be, well, markedly divergent from each other.
It doesn’t take a CFO to understand the bottom-line benefits of dispensing with all that fragmented and ultimately redundant architecture. When Software-as-a-Service CMS platforms arrived, the bell had begun to toll – loudly – for on-prem infrastructures.
How a SaaS CMS lowers TOC
So exactly how does a SaaS CMS solution conserve costs, both immediately and over time? It’s a lengthy list:
Infrastructure elimination
First, of course, a SaaS CMS platform allows you to do away with upfront system architecture investments in hardware and software, since your new platform will be subscription-based and housed in the Cloud. Any need for pricey hardware, software, and associated maintenance and updating is eliminated.
The sunk costs of SaaS product are very lean compared to on-premise solutions, since upfront spend is minimized and costs are spread over time. Expensive capital outlays that once went toward servers and network equipment are transformed into a monthly operating expense that’s stable and predictable.
The cost-cutting goes further, though, when you consider everything that’s necessary for the care and feeding of an on-prem infrastructure. Though SaaS subscriptions can sometimes appear expensive at first glance, the savings from not having to maintain hardware and networks, or hire full-time developers and IT staff, make them economical.
TCO should include the cost of those human resources, including weekend overtime to install hot fixes, or make repairs, or fend off black hat attacks. Those costs scale up big time when they’re viewed from the perspective of a global company.
For organizations that aren’t quite ready to rip-and-replace existing architecture and legacy systems, a worthy SaaS CMS should be able to integrate smoothly with these and many of the third-party apps and tools that might be in place. This can include existing databases, which can mitigate the data migration costs associated with moving to a new platform.
No-cost scalability
If you’re running an on-prem CMS and encounter a whopping demand spike, whether it’s anticipated or unexpected, accommodating that spike requires bringing on extra resources.
The problem with this model is twofold: If you’ve already installed sufficient architecture to handle spikes, its extra capacity (and its investment) isn’t being utilized during off-demand periods. Yet if you decide to be more efficient by only bringing on temporary capacity – let’s say by renting server space when spikes strike – those charges can be stiff, too.
A SaaS CMS product is built around fast, simple and pain-free scalability: You only pay for the exact services and capacity you’re using at any given moment, and there’s often no ceiling on how much demand you can accommodate. It’s a much more pragmatic pricing model for handling demand peaks.
Standardization savings
By standardizing the CMS that’s available across the enterprise, costs are lowered since users can now quickly and easily access a uniform platform where the vendor has already incorporated standardization and economies of scale into their offering.
By centralizing service delivery in the Cloud, and taking on the job of managing, updating and supporting the platform, a SaaS CMS provider removes both costs and headaches from its customers.
Resource redeployment
There are costs to an enterprise when valuable resources – in budget, personnel or management focus – are diverted into upkeep and updating of an on-premise CMS infrastructure, versus devoting those resources to business activities that directly generate ROI.
A SaaS CMS solution eases that strain, as budgets can now be invested in more profitable opportunities. Rather than worrying about security and disaster recovery problems, a marketer can attend to staying on the competitive cutting edge and delivering improved customer experiences.
Affordable agility
Relatively speaking, it’s far easier and less expensive to enter a new market to launch a new digital marketing presence there, or react to the dynamics of an existing market, when using an SaaS solution. Entire workplaces or local digital marketing teams can be set up in a (comparative) eyeblink when measured against the ramp-up times (and outlays) involved in establishing on-premise solutions.
A SaaS CMS will a marketer gains newfound agility in resource allocation, adoption and implementation, and their ability to react quickly to market developments. Some CFOs factor opportunity costs into their TOC calculations: A SaaS CMS accelerates time-to-market, while on-premise systems can take significantly longer to either install or even publish websites and content.
Training costs
It’s critical to train users to extract maximum productivity and value from any software investment, but with an SaaS CMS that training can be quicker and more convenient than with on-prem systems.
Bringing trainers on-site or dispatching personnel to training centers has long been a rule of thumb with many on-prem platforms. Furthermore, an organization that’s indulged in extensively customizing its software and network will need to customize its training regimen, too.
SaaS solutions often rely on online training and in-line help functions, which is a less expensive way of tutoring users. They may also be supported by strong user communities who can answer questions or solve challenges. Moreover, since many SaaS CMS systems are designed with intuitive UIs and don’t demand coding skills from users, their onboarding curves are shorter and less steep.
Better compliance and QA
Digital marketers in the U.S. are still hit with penalties forcing them to dig deep for making mistakes. For a global marketer, operating multiple on-prem systems in divergent markets which each may have its own set of digital marketing or data regulations is tempting disaster.
This lack of centralized governance and compliance control means things can easily go awry at the local level, resulting in penalties ranging from cash to worst-case scenarios when a marketer is banned from operating in that region.
With an SaaS CMS, oversight and quality control of websites and other digital touchpoints can be unified and centralized, though content creation and customization can still be left to in-market teams. Via top-down monitoring and enforcement of brand standards and compliance rules, a global enterprise can police a much higher level of quality control and compliance.
Best-in-class SaaS CMS solutions may even include Digital Quality Management (DQM) capabilities that actually automate many of the functions involved in global digital QA.
That way, branding and messaging can be consistent across each customer’s total digital experience, even in an omnichannel world.
Ensuring security
Experiencing website downtime due to a DDoS attack or other hack can rapidly turn into an expensive proposition. How expensive? One 2017 report by Neustar put the average yearly loss for each enterprise it surveyed at $2.5 million.
For the on-premise CMS operator, the burden and brunt of defending against those attacks, or any other security threats, falls largely to them. It demands enlisting a full-time security team and investing in software and network hardware to protect sites and data. In an era where ransomware attacks alone grew 600% in just one year, the resource spends on security can escalate at breakneck speed.
With a leading SaaS CMS, those security responsibilities are largely taken up by the platform vendor, who employs their own security experts to safeguard customer websites and data. Often, these platforms are also built on hosting providers like Amazon Web Services who provide their own highly developed security tools and practices.
Look at the long game
Last but not least, there’s the fact technology is evolving at near-exponential rates. A SaaS CMA that’s managed and updated by a leading, reliable provider is far more likely to keep pace with those changes.
Unless you’re unflinchingly enamored of the idea of installing, maintaining and upgrading an on-premise CMS in the face of that furious evolution, a Cloud-based CMS makes all the sense in the world.
As one study by Strategy& revealed, the TCO for a SaaS solution can be up to 50-60% less than that of a traditional on-premise system, when considered over a 10-year period. The clincher for truly global marketers, though, may not be the savings; it’s the fact a SaaS CMS will leave them in a far more competitive position than other alternatives when they hit that 10-year mark.
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