SaaS vs. Server-Based Systems

The Software-as-a-Service model can reduce TCO for access control systems


Installation costs were quantified for four areas, with the following results:

System Installation Expenses

SaaS

Server-Based

Installed cost of control panels and related hardware

$3,200.00

$3,200.00

IT staff expense, including initial consultation, network configuration, firewall settings

$100.00

$800.00

Installed cost of servers

$0.00

$4,400.00

Cost of software licenses:
- Application license
- Operating System
- Database
- Middleware
- Backup Storage

$0.00

$2,100.00

TOTAL ONE-TIME EXPENSES

$3,300.00

$10,500.00

Staff time for the server-based system included initial consultation for server installation, establishing networking parameters for server system and related control panels, assessing firewall policy impact and making needed adjustments for remote access to the security management platform. The SaaS platform, by contrast, used DHCP on all control panels, thereby eliminating the need to assign static IP addresses or perform other network management tasks. It also required no changes to the firewall, as it used an existing “outbound 443 allowed” policy. Remote access to the access control application is a baseline capability of the SaaS model.

Installed cost of servers for the server-based model included two security-grade redundant servers (to offer similar redundancy to the SaaS solution, which is intrinsically redundant), as well as one day of installation and set-up time on-site. With the SaaS model, of course, there is no on-site server installation, which eliminated these costs.

Software license fees included all required licenses for applications, middleware, database and operating system. These costs are all built in to the monthly fees for SaaS services, which means that there is no up-front charge for any of these items.

Recurring Fees

Recurring fees were identified for three areas, with the following results:

Recurring Fees

SaaS

Server-Based

Annual recurring service fees

$960.00

$0.00

Annual software maintenance

$0.00

$150.00

Annual technical support fees

$0.00

$150.00

RECURRING ANNUAL FEES

$960.00

$300.00

Monthly subscription fees are the hallmark of the SaaS model, whereas they are zero for an installed server-based system. Retail rates for these services vary considerably depending on whether any additional services are bundled in (e.g., 24/7 telephone support, concierge services, etc.). In this analysis, a market average for basic subscription services was used.

Annual software maintenance fees — typically charged to entitle users to ongoing software upgrades — are free in the SaaS model, as upgrades to Internet-based SaaS services are part of the core value proposition of such services.

Technical Support fees for access to telephone support are required by most organizations, but tend to be included or bundled into the monthly subscription fees of SaaS vendors.

Operational Expenses

Operational expenses (non-IT) identified as relevant to the TCO model were primarily related to energy — an increasingly visible cost of computing infrastructure.

Operational Expenses (Ongoing)

SaaS

Server-Based

Electrical power for server

$0.00

$709.21

Data center power expense for cooling, delivery, backup, air handling.

$0.00

$709.21

OPERATIONAL EXPENSES

$0.00

$1,418.42

The primary power consumption expense is based on redundant servers, with 2x400 W power supplies, running at all times, with an average cost of $0.1012 per KWH for commercial power. Note that there is no associated power consumption for a SaaS security management platform, as all applications and databases are offsite and included in the monthly subscription fee. A redundant configuration is used for this calculation to compare fairly with the redundancy offered by an enterprise-grade SaaS provider.