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How Much Does SharePoint Cost?

Jul 10, 2015 SharePoint Dennis Junk

How much does SharePoint Cost?Grant Harmeyer, Aptera’s SharePoint Practice Leader, says he needs answers to two basic questions before he can even begin to work out the cost of a project. First, how are the people in your organization going to be using the solution? In other words, what kind of business use cases are we talking about? And, second, how many employees will each of those user scenarios apply to? So, in effect, you need to know how many people are going to be using the platform, and in what ways they’ll be using it, before you can answer the cost question. But we can walk you through the main considerations that factor into what your total expenditure will amount to.

Since SharePoint is a highly customizable technology that is often deeply integrated into many routine business processes, the first factor you’ll need to account for is the cost of planning and implementation. Once you’ve gone through the implementation and deployment, you will then have licensing fees as well as ongoing infrastructure expenses.

Grant has worked on projects for companies with a dozen or so employees who only needed to use some of the most standard applications. In these cases, the SharePoint solution costs around $10,000 to implement, and the ongoing operational costs tend to fall in the range of a couple hundred dollars on a monthly basis. On the opposite end, Grant has worked on projects for large corporations with hundreds of employees where the cost of implementation was north of $200,000 and the cost of operation is more like a couple thousand dollars a month.

Here’s a breakdown of what will go into your total cost:

Planning and implementation

Scott Walsh, one of the SharePoint experts here at Aptera, says that if you were to list all of the capabilities the technology gives you access to it could easily fill about 500 pages. He pointed this out to help explain why many businesses have issues with user adoption post-deployment. Setting up your SharePoint dashboard without any input from end users in the planning phases is like throwing a book of a hundred or so pages on your employees’ desks and telling them to find whatever pages they need.  

The key to creating an information architecture that simplifies your workers’ daily routines instead of further complicated them is to focus planning sessions on actual user scenarios and pain points. The whole point of the solution after all is to make your employees’ lives easier, not to instigate some kind of top-down reform or some new procedural enforcement regime. If using the new tools isn’t simpler than using whatever tools your employees are already relying on, you’re almost guaranteed to have low adoption. And, if people aren’t using the solution, there’s no way you can get any return on your investment.

So you can’t afford to overlook the cost of in-depth analysis and user-focused planning. This also means having a plan in place for internal marketing to get everyone on board with the project, along with training once the solution is deployed. The way this factors into the cost is that the more diverse the roles are for your workers, and the greater variety of tools associated with each role, the more complex the architecture will need to be—and the more you’ll have to invest in planning and training.  

Licenses

This one seems straightforward at first—you pay upfront fees for one license or another based on which of the SharePoint tools each user will need. Where it can get complicated is that you’ll want to pay for the Standard Client Access License (CAL) for as many of your employees as possible, while you only want to pay for Enterprise CALs for the people who need the added tools. Some of your employees may need to use Business Intelligence tools, for instance, while others don’t. You can potentially save a lot of money by only getting Enterprise CALs for the ones using BI.

SharePoint licensing can also get complicated—and problematic—owing to Microsoft’s billing process. Every year, Microsoft performs what’s called a true-up, during which you provide them with the details on how many of your employees are using each type of technology included in your Enterprise Agreement. Though this may seem simple enough, many businesses get into trouble because they think of CALs as one-time, up-front expenses. But there’s often nothing stopping a user from accessing the tools that fall into the more costly licensing categories. It’s a bit like a hotel mini-bar; true-up is when the hotel staff comes in and counts the bottles, so you have to be careful not to get burned.

SharePoint 2013 has a User Licensing Enforcement (ULE) tool you can configure that uses Active Directory to block employees from accessing anything associated with higher-cost licenses. Setting up your ULE helps you avoid surprises when true-up time comes around, and it can help you manage your SharePoint budget more generally.

Infrastructure and the cloud

Your SharePoint environment has to live somewhere, either on your business’s premises or in the cloud. Your infrastructure is made up of the physical servers that store and process SharePoint data. As with licensing, the cost of infrastructure depends on how you’ll be using your solution. If you need to use a BI tool like PowerPivot for SharePoint, for instance, then you’re going to need an Enterprise (or Business Intelligence) version of SQL Server to host it, and this version is quite a bit more expensive than the Standard version. You’ll also need more servers to accommodate greater numbers of users.

Many businesses that originally set up their infrastructure and paid for their licenses in the pre-cloud days are reluctant to switch to a payment model based on monthly rates. But there are a lot of costs associated with maintaining your own servers. The Service-Level Agreement your IT staff follows includes the cost of data backups and disaster recovery contingencies. With on-prem infrastructure, you’re also on the hook for software updates and keeping up with new product versions.

It’s not unimaginable that in the not-so-distant future just about everyone will be using the cloud version, SharePoint Online, to simplify cost and avoid the difficulty of infrastructure maintenance. But for now many businesses still have integration, compliance, or policy requirements that make migration difficult or untenable.

The hybrid option

In addition to SharePoint Online, you can also get SharePoint as part of an Office 365 subscription. And, if you have Office 365, you may get some cost savings from license transference if parts of your environment are still on-prem. Again, many businesses simply don’t have the option of moving everything into the cloud (mainly because of compliance issues).

But you can store some documents in SharePoint Online sites while keeping other, more restrictively regulated documents in on-prem servers. Microsoft is in fact creating hybrid functions for SharePoint 2016 that will make it possible for search and e-discovery to include both cloud and on-prem databases. Office Graph, which maps usage and interactions between users, will also compile data from both sides of a hybrid solution. Delve, an activity feed that displays the documents most relevant to individual users, is powered by Graph, and so will also be available for businesses with hybrid SharePoint setups.

There are several other hybrid scenarios, but you just need to keep in mind two key takeaways. First, infrastructure costs can get really complicated—depending on what you need the solution to do. And, second, moving to the cloud isn’t necessarily an all or nothing process. If you can’t migrate your entire business to the cloud, you may nonetheless benefit from migrating parts of it.

The answer to the question of how much SharePoint costs is, naturally enough, it depends. What makes the technology so useful to so many businesses is that it really isn’t any one thing, but rather a large set of tools that’s useful for many possible things. Building a SharePoint solution for your business involves a lot of planning and customizing, since each user may need to leverage different features from the huge array of what’s available. So SharePoint ends up being a subtly different solution for each different business that implements it. The key to successful implementation is thorough analysis of your budget and business needs coupled with in-depth user-focused planning and design.

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Posted in: SharePoint

Topics: SharePoint SharePoint Cost

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