SaaS vs. Server-Based Systems

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


The additional expense of delivering this power to the servers assumes a PUE (Power Usage Efficiency) of 2.0 for a well run data center, which implies that every watt consumed for IT equipment is matched by an additional watt for uninterruptible power (UPS), chillers, air handlers and power distribution equipment.

Ongoing IT Expenses

Ongoing IT expenses proved to be a significant component of overall annual and lifetime costs, as show below:

IT Expenses (Recurring)

SaaS

Server-Based

Rack space for server

$0.00

$720.00

Redundant Offsite Data Backup

$0.00

$239.40

Server Management Annual

$0.00

$1,200.00

Budgeted server upgrades/replacements

$0.00

$880.00

Allocated IT support staff cost

$0.00

$0.00

IT EXPENSES

$0.00

$3,039.40

Rack space to house two redundant 1U servers was estimated based on the lowest commercially available cost for which we could find pricing data. Again, rack space is calculated on the basis of redundant servers in order to compare fairly with redundancy provide by an enterprise-grade SaaS provider.

Most (if not all) SaaS providers include remote backup to a Disaster Recovery data center. For the sake of making an even comparison, the cost of an offsite backup of all data was added to the server-based solution at the lowest available commercial rate.

Server management cost was budgeted at a very low one hour per month for the server-based system, with fully loaded labor rates at national averages for IT personnel. Again, such costs are avoided when using a SaaS provider.

Budgeted server upgrade or replacement costs reflect likely or planned server upgrade requirements that occur over a 5-year period — a much longer lifespan than most servers in today's IT environment. Many systems require upgrades over this time span due to mandatory operating system and security upgrades, as well as product obsolescence.

Single Site Summary

The following table summarizes the findings presented above and multiplies out the annual recurring fees for both solutions to their five-year totals.

Expense Category

SaaS

Server-Based

Period of Expense

Up-Front Expenses

$3,300.00

$10,500.00

One-time

Recurring Annual Fees

$960.00

$300.00

Annual

Operational Expenses

$-

$1,418.42

Annual

IT Expenses

$-

$3,039.40

Annual

TOTAL 5-YEAR
COST OF OWNERSHIP

$8,100.00

$34,289.10

5-Year

The cost savings of using a SaaS solution for access control are clearly dramatic — and probably far greater than most observers would have expected. Many server-based systems clearly appear to be less expensive than this to own and operate, so where exactly did the costs grow beyond expectations?

A few things to remember about this analysis is that in the interest of a fair comparison with a SaaS offering, the server-based solution that we modeled was likely more powerful than many deployed in smaller businesses, and offered more services, such as redundancy, offsite backup, automatic upgrades to applications and system software, as well as full technical support.

Similarly, it was equipped with infrastructure elements such uninterruptible power, environmental conditioning, data center quality rack space (as opposed to sitting under someone's desk) that represent costs often overlooked or left as “overhead” in the hasty comparison often presented during the sales cycle.

Nonetheless, even with “downgrades” to the quality of service used to price out the server solution, it has approximately $26,000 of cost disadvantage that it would have to overcome during the five-year lifecycle in order to compete with the SaaS solution.

Additionally, the data presented thus far has primarily addressed a single-site case. Quantitatively and qualitatively, the SaaS solution fares even better in a multi-site application, primarily due to additional cost penalties that the server-based solution must pay during initial setup of VPNs , along with higher ongoing IT expenses due to the complexity of managing the security management applications over a far-flung network.