On-Premise, Hosted or Cloud – Is an On-Premise Pricing Structure Right for Your Company?
Posted on: December 22, 2014 | By: Craig Thompson | ERP Selection
You’ve chosen your ERP system and now you must choose something equally as important: your deployment option. When it comes to deployment, you have three main options: On-Premise, Hosted and in the Cloud. In part four of our blog series “On-Premise, Hosted or Cloud – What Works Best for Your Company?”, we will begin to explore the different pricing structures for each deployment option. If an On-Premise deployment option seems to suit your company best, you will want to be sure that an On-Premise pricing structure meets your budget requirements.
A look at our infographic shows the following pricing structure:
Software: $15,000
Annual Maintenance: $3,000
Database Software: $1,000
Infrastructure: $15,000
Updates: Varies
In order to make a decision, you must decide if this pricing structure is right for you. To break this down a little further, with On-Premise deployment you make a one-time purchase of software. In this scenario we have our ERP software being priced at $15,000. Although this software must be maintained, it will never have to be purchased again. This software is now owned by your company. In order to properly implement this solution you must also purchase database software, which runs around $1,000. Infrastructure is another cost to On-Premise software because all hardware is owned by your company, for this example we set our infrastructure costs at a one-time price of $15,000. In order to keep this infrastructure and your ERP system in top shape you will have an annual maintenance fee around $3,000. Along with this fee, you will also have to manage various updates throughout the life of your system, with these costs greatly varying.
All in all, the initial costs of On-Premise deployment are high. Yet, after these costs are managed, the software and infrastructure is owned by your company which means that the only other costs would be annual maintenance and updates down the road. Is On-Premise ERP deployment a fit for you? Contact Logan Consulting for more information.