Whenever we discuss SharePoint, it’s never long before the cost question comes up. The problem is that asking how much SharePoint costs is a bit like asking what a new house costs. Just as the expenses associated with owning the house after it’s built are separate from the cost of building, the ongoing expense of operating SharePoint must be added to that of the initial implementation to get the Total Cost of Ownership (TCO). And, just as the total cost of building a house depends on factors ranging from the square-footage to the location to the reputation of the general contractor, the total cost of implementing a SharePoint solution falls into such a broad range and depends on so many variables that we can never really answer the question with any single dollar-figure.
What we can do is give you a sense of the dollar range SharePoint projects tend to fall into and explain some of the considerations that factor into the cost of any particular project. The actual tables our SharePoint team uses for pricing run to several pages and are highly technical, so you won’t by any means be able to use this post to generate an estimate for a project. But hopefully it will give you a rough sense of the main questions that need to be answered to determine how much you’ll be investing in your SharePoint solution so you can weigh it against your expected returns.
The reason SharePoint is such a powerful tool is that it can be customized to handle almost any aspect of business collaboration you can imagine. Of course, that’s also what makes the TCO so hard to determine in the abstract, as all the tweaking makes each implementation unique. For a company with twelve employees using only the most standard applications, implementation can cost as little as $10,000, with operational costs in the range of a couple hundred dollars a month. For a large corporation, a $200,000 implementation isn’t uncommon, along with a couple-thousand-dollar monthly outlay for operation.
To figure out where you fall in this range, your SharePoint planning should focus on two questions:
What are you using it for?
What often happens is that businesses considering SharePoint try to arrive at cost figures through online research. The first thing they usually find is a complicated breakdown of various licensing options. But you can’t know what kind of license you need until you know what precisely you’re going to be using SharePoint for. Once you know what you will be doing with your new environment, it’s actually pretty easy to figure out which licensing bracket you fall into. For instance, if you want to use SharePoint for Business Intelligence, that automatically pushes you from the Standard Client Access License (CAL) to the Enterprise version for each of your users. If you will be using SharePoint for BI, your developers also know they have to factor in the use of companion technologies like SQL Server or Analysis Services. Really, though, licensing is often a relatively minor factor in the cost of operation. But knowing how people in your business will be using SharePoint gives implementers or technology partners an idea of how to answer the second question, which focuses on scale.
How many people are going to be using it?
This is where differentiating between cost of implementation and cost of operation gets tricky. It’s not just about acquiring the right number of user CALs. The more people relying on your SharePoint platform, the more horsepower you’ll need to support it. You may need to purchase extra servers as part of your implementation, and each of those servers adds to your operational cost. Many businesses even assign some of their IT staffs to the maintenance of their server farms. So implementing SharePoint may entail buying hardware, which will in turn entail ongoing operation and maintenance expenditures. Depending on what you’re using it for, you may have the option of hosting your environment—or parts of it—in the Cloud by signing up for what’s called Infrastructure as a Service (IaaS), and the option you choose will impact your TCO.
If you’re upgrading to SharePoint 2013 from an earlier version, you will need to purchase all new infrastructure because to transfer all your data you have to have two environments working at the same time. In other words, you can’t do in-place upgrades to SharePoint 2013. While this will almost certainly add to the cost of implementation, SharePoint 2013 offers some advantages that may reduce the cost of operation. For example, the new cloud-app development model can assist in governance and separation of code execution, thus better ensuring stability and performance. Part of the cost of maintenance goes into the Service-Level Agreement the business expects to be upheld for your SharePoint environment. This includes things like periodic updates to your software and data backups for disaster recovery. Every company has its own Business Continuity Requirements—how often your data is saved to backups and what are the recovery objectives or requirements—and this can factor into licensing plans as well for the underlying infrastructure.
All these contingencies and complicating factors make shopping around for a technology partner offering the best deal on SharePoint really frustrating. To add yet another wrinkle, the company with the lowest bid probably won’t be the one best equipped to customize SharePoint to meet your business’s unique needs. At Aptera, we encourage clients to invest in a lot of upfront planning so they can be sure they’re future-proofing their deployment as best as they can. Over the years, we’ve developed a Road Mapping Process specifically designed to identify a business’s unique challenges and match them to the technologies best suited to meeting them. The Road Map also helps produce a Governance Plan, which in turn helps determine what type of infrastructure you need and what types of licenses and agreements will be required to uphold the promises to the business that the Governance Plan defines. The key is to let your business needs drive your technology choices. While this means you have to get some distance into the planning process before a final TCO can be estimated even to the roundest figures, the benefits of a fully customized SharePoint platform may make it well worth your invested time.
We also have a more recent post on this question: How Much Does SharePoint Cost?
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