I get this question a lot: “What does SharePoint cost?” It may sound like I’m hedging, but my answer is: “How are you going to use it?” There’s no way to know what SharePoint is going to cost until you fully understand what you’re going to do with it. I’d like to talk through some factors that will help you develop your SharePoint plan in order to get to that all-important bottom line: the budget!
When you purchase volume licensing from Microsoft, each year you have a true-up where you tally the licenses you’ve used and pay for them.
Some important considerations:
- It is your responsibility to keep track of your employees’ SharePoint use. There are a couple editions of SharePoint – the Standard Client Access license (CAL), and the more expensive Enterprise CAL.
- Don’t wait until it’s time to true-up with Microsoft to figure out how much your SharePoint licenses will cost the company. Carefully evaluate which employees need SharePoint’s Enterprise CAL rather than its Standard license. A surprising number of companies pay for Enterprise for all their employees across the board, but this could be an expensive oversight. If your company has hundreds or thousands of employees (you pay per user for SharePoint licenses), then it’s worth figuring out who actually needs access to the Enterprise features and who doesn’t.
- Once you’ve determined who needs which license, you can enforce adherence to licensure using Active Directory (AD) groups. By configuring SharePoint to associate AD groups with their respective license types (Enterprise vs. Standard), you can guarantee that only those users in that group are using the more expensive SharePoint licensing. Then, when it’s time to do your true-up, it’s easy to calculate the licensing fees by reporting on AD group membership. Putting measures in place to identify and isolate Enterprise users makes it easy to justify your licensing claims. It’s possible to pay thousands less in fees one year over the previous year just by keeping better records. Your CFO is going to appreciate the cost containment associated with this planning!
On-prem or cloud
Next, consider the costs of running SharePoint on-premises. Yes, there are some scenarios where SharePoint’s on-premises product is the best or only option. For instance, perhaps your company uses a proprietary full-trust solution, or you have a compliance policy that prohibits you from placing data in the cloud. There are certain areas of compliance that the cloud doesn’t meet. If you find yourself in one of these situations, be sure to consider all the costs associated with running SharePoint on-premises.
- You can’t overlook the significance of the operating costs of keeping the on-premises version of SharePoint running. You need to factor in the costs of electricity, maintenance, disaster recovery, patches, antivirus subscriptions, added servers and more.
- It pays to do your homework on the wide range of cloud options. SharePoint Online is one Software as a Service offering in Office 365, and there is licensing using just the SharePoint Online service in Office 365. Even though SharePoint is included in Office 365, you can also get the cloud version, SharePoint Online, as a stand-alone product. As with the Standard vs. Enterprise scenario on-prem, it’s important to investigate all of your true feature demands and their licensing costs before you commit to a system. Office 365 has a variety of services and a variety of licenses to suit your specific needs to minimize licensing fees.
Specific needs and uses
Lastly, take your special circumstances and needs into consideration! Certain applications may significantly impact your costs in unexpected ways. Here’s a sample scenario: Let’s say your organization has a Business Intelligence (BI) team. They want to use Power Pivot for SharePoint. This is available in Office 365, although it makes the licensing a bit more expensive. However, if you were to set that up on-premises, it would require a much more significant operational investment and also requires either SQL Server Enterprise or SQL Server Business Intelligence edition. While prices do vary, one certainty is that SQL Server Enterprise or Business Intelligence costs significantly more than the standard edition counterpart. This is one scenario where, unless there’s some requirement to keep SharePoint on premises, you are likely to be much better off if you can keep this in the cloud for a few reasons. Firstly, the cost of the license and the maintenance of the platform is factored into the cost of the subscription. Secondly, (and perhaps more importantly) the cloud services are evolving at a significant pace and this scenario may be better addressed by Power BI, which can be decoupled from SharePoint altogether!
At the outset, I said that the cost of your SharePoint licensing was going to depend on what you plan to do with it. Be sure to evaluate not only the upfront cost between SharePoint on-premises and Office 365, but also your long-term costs versus what you save by being in the cloud.
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