cost benefit of software as a service forweb content management andcontent delivery networks

Cost Benefit of Software as a Service for Web Content Management and

Content Delivery Networks

Overview

Comparative Cost Benefit Analysis

• Small scale site solution for business or organisation event.

• Medium scale site solution for business unit or organisation department.

• Large scale site solution for overall business or organisation.

Conclusions

Source References

Overview & Methodology

Content Management as a Software Service

Content Delivery Network & Cloud

Traditional Installed Software Solutions

New Hosted Software Services Solutions

Exclusions & Assumptions

Document Details

Information & Contacts

Contents page

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Understanding Software as a Service for Web Content Management and Content Delivery Networks. www.ptools.com

We’re keen to engage with others involved in this area

with particular focus on how territoriality, performance,

security and compliance are handled in the new WCM

software services environment.

Comparative Cost Benefit AnalysisSmall scale site solution for business or organisation event.

This deployment is relatively small, containing tens

of pages and hundreds of content elements over time.

There are several content contributors with one clear

site owner and administrator. The database and other

infrastructure requirements are limited. The deployment

is important in terms of market appearance but contains

no content transactions or business processes. The

deployment reflects the needs of a business unit or

organisation initiative.

Although there is a clear excess in terms of initial

licensing cost and annual software support cost, plus the

nominal upgrade increment after three years, there is

otherwise only limited difference in overall cost.

The level of savings over the period between new hosted

software services solutions and traditional installed and

licensed solutions is estimated to be in the region of

150%.

Overview pTools software has designed developed and supported

web content management software solutions for over ten

years. In 2011 we released a cloud version of our WCM

software and the next step has been to build a content

delivery network to support the provision of the software

as a service. Saas will represent over 80% of the public

cloud marketplace by 20201 and this is a significant

development in terms of technology and business. This

document explores some of the issues that we believe

will impact on how we deliver new software services.

The cost benefit of WCM as a software service forms

part of the document but there’s also consideration

of what needs to be considered when comparing new

WCM software services with licensed software solutions.

There’s a great deal of change which will ultimately

affect some of the points raised here although we

recognise that Canada, USA and UK are among the worlds

top 20 cloud oriented countries2. While new Web Content

Management software services afford significant cost-

benefits over traditional licensed solutions the need

for reduction in operating costs is the principle driver

for Cloud and Saas adoption3. This document sets out

to explain how, in combination with other aspects of

delivery; new software services represent a definitive

improvement over the deployment lifecycle. Even though

Investment in Cloud services is the top priority for CIO's

worldwide in 2012 to 20144 the principle result here

is the smoothing out of costs over the lifecycle of the

project with indicative savings of between one and three

times the cost of traditional solutions.

Although it is difficult to define the cost of all aspects

of deployment it is clear that this smoothing out

underpins benefits in terms of ease of adoption and on-

going development. A particular aspect which it is not

possible to evaluate is the benefit, in terms of software

as a service, of a single supplier and single point of

contact for all support issues. In addition the document

considers the impact of Content Delivery Networks as

the means by which Web Content Management software

services are delivered. Cloud and Saas will drive more

than 4 million jobs in USA, Canada, and UK, by 20155.


Traditional WCM Software SolutionsNew WCM Software Services

Quarters

Cost

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This level of saving may not be sufficient to overcome

the significance of traditional licensing control over new

services. However the first year on-ramp remains high

for traditional licensing at approximately double the

investment in the first year over new hosted software

services solutions.

Medium scale site solution for business unit or organisation event.

This deployment is larger and more significant,

containing hundreds if not thousands of pages and

tens of thousands of content elements over time. There

is a significant cohort of content contributors with a

number of different owners and administrators associated

with different aspects of the site. The database and

other infrastructure requirements are of an enterprise

scale. The deployment is important in terms of market

appearance and also contains a number content

transactions and business processes relating to customer

service and product/service engagement. The deployment

reflects the needs of the business or organisation online

and is the principle destination for online initiatives.

Once again there is a clear excess in terms of initial

licensing cost and annual software support cost, plus

the upgrade increment after three years, and in this case

the difference in overall cost over new hosted software

services solutions is significant.




200%.

This level of saving is more likely to be sufficient to

overcome the significance of traditional licensing control

over new services. In addition the first year on-ramp

remains high for traditional licensing at approximately

two and a half times the investment in the first year

over new hosted software services solutions.

Large scale site solution for overall business or organisation.

This deployment is significantly larger, containing

thousands of pages and millions of content elements

over time. There are large numbers of content

contributors with many different owners and

administrators associated with different aspects of the

site and a hierarchy of content and content ownership

reflecting the business or organisation structure. The

database and other infrastructure requirements are of

an enterprise scale with industry standard overheads in

terms of architecture and compliance. The deployment

is essential in terms of business or organisation process

and contains many key content transactions and business

processes relating to customer service and product/

service engagement. The deployment reflects the needs

of the business or organisation both online and in terms

of integration with additional systems linked to core

processes and is the principle destination for online

initiatives.



Quarters

Cost


Quarters

Cost

2

As seen in all options there is again a clear excess

in terms of initial licensing cost and annual software

support cost, plus the upgrade increment after three

years, and in this case the difference in overall cost

over new hosted software services solutions is very

significant.




250%.

This level of saving is highly likely to be sufficient to

overcome the significance of traditional licensing control

over new services. In addition the first year on-ramp

remains high for traditional licensing at approximately

three and a half times the investment in the first year

over new hosted software services solutions.

ConclusionsOverall the main benefit to customers is in the

redistribution of costs across the overall deployment

and project lifecycle. This smoothing out of resource

acquisition represents a greater relative benefit at the

early stages. It is therefore easier to get started and

achieve more, more quickly and this in turn allows for

greater efficiency over the life of the deployment.

• The larger the scale of deployment the greater the

potential benefit and cost saving between new

software services and traditional installed licensed

solutions.

• The level and impact of managed services required

throughout the deployment lifecycle are likely

to be similar between new software services and

traditional installed licensed solutions.

• Notwithstanding this the optimum point at which

software requirements and additional managed

services tend toward new software services cannot

be defined in any generic manner.

• The significantly improved on-ramp for new software

services is the main benefit over traditional installed

licensed solutions.

• The improved on-ramp for new software services

allows for greater flexibility in the critical early

stage, reduces costs, and reduces the deployment

lifecycle overall.

• The removal of annual licensed software support fees

represents a significant on-going saving between

new software services and traditional installed

licensed solutions.

The impact of additional feature requirements to the

deployment has not been defined. However as many of

these services including; Search Engine Optimisation,

Search Engine Marketing, Disaster Recovery, Business

Intelligence, Social Media Integration, Document

Management and many more, are increasingly defined

as software services there is a clear potential benefit in

rapid and effective deployment of these software services

in the context of a WCM that is itself presented as a

software service.

Further work is required to explore and contrast managed

services including design development and other project

attributes between new software services and traditional

installed licensed solutions.

Source References1. Saas will represent over 80% of the public cloud

marketplace by 2020 - Forrester 'Sizing the Cloud' 2011

2. Canada, USA and UK among the world’s top 20 cloud

oriented countries - BSA Cloud Country Report 2012

3. The need for reduction in operating costs is the

principle driver for Cloud and Saas adoption - SAP

Quarterly Company Survey Q1 2012

4. Investment in Cloud services is the top priority for

CIO's worldwide in 2012 to 2014 - IDC CIO Survey 2011.

5. Cloud and Saas will drive more than 4 million Jobs

in USA, Canada, and UK, by 2015 - IDC Cloud Economy

Report 2011


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Overview & MethodologyThis document considers key differentiators for provision

of web content management software and services

between traditional installed and licensed solutions and

new hosted software services solutions.

The method used in this document was to compare a

subjective random sample of web content management

software and site delivery solutions against the criteria

and elements listed and to assign values for cost, time

and other resources over the lifecycle of the solution.

The nominal lifecycle for both traditional installed and

licensed solutions and new hosted software services

solutions was determined at five years although it is

recognised that this varies greatly across solutions. In

addition the sample was divided into three categories

of solution based on scale of site solution, number

of content contributors, and degree of importance in

terms of the critical nature of content to the business

or organisation. These three categories described are

designed to represent typical case references for site

solutions in each category.

Content Management as a Software ServiceTo some extent WCM has always been delivered to the

business as a software service where the software is

hosted by either the vendor, the customer IT department,

or a third party. More recently this has been redefined by

new pricing models that reflect the on-going nature of

new service payments rather than the once off nature of

traditional license payments. Notwithstanding this, the

advent of Cloud computing has recalibrated all software

service offerings and WCM is no different.

In the context of WCM therefore there are a number of

current offerings that are broadly described as software

services. These are:

• A traditional hosted service where software is

provided through traditional hosting infrastructure

controlled by the vendor and representing in effect a

software rental.

• A hybrid or Content Delivery Network (CDN) service

where software is provided through a combination of

dedicated and Cloud based infrastructure.

• A full Cloud based software service where all

software is provided through Cloud infrastructure by

the vendor.

These three options provide for no software installation

at the customer’s or end user’s environment although

such alternatives do of course exist. The scope of this

document does not allow for consideration of the many

different ways in which these three services are provided

and charged. Options range across per user, to data

and bandwidth, through solution instance and reflect a

highly uncertain marketplace in this regard. However,

the important difference is that up-front license costs do

not form part of the offering in any of these scenarios

and therefore the on-ramp for customers is dramatically

reduced.

Content Delivery Network & CloudThe concept of Content Delivery Network (CDN) is not

new and has been the cornerstone of online media

delivery globally for some time. In the context of WCM

however it is relatively new. A CDN is a network of

servers that are aligned to a single delivery objective.

These servers may be based upon physical or virtual,

territorial or Cloud based infrastructure but they are

connected in such a way that together they improve the

delivery objective.


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In this case that objective is delivery of web content and

importantly the associated applications. By deploying to

a CDN customers gain the benefit of both the dedicated

network and Cloud. This means that the traditional

requirements of territoriality, security, and compliance

are upheld while the new requirements of scalability,

performance, and efficiency are also achieved.

Traditional Installed Software SolutionsThe traditional installed and licensed web content

management software solution includes many elements

that are provided to the solution as separate items or as

a number of combined services. They may be provided by

one or more suppliers. For the purpose of this document

these elements include:

• Servers - the physical or virtual machines associated

with installation of the WCM software.

• Hosting - the physical or virtual connectivity, rack-

space, and infrastructure associated with installation

of the WCM software.

• Operating System - the software operating system

for the server associated with installation of the

WCM software.

• Database - the database software that drives the

WCM software and dynamic site features.

• Content Management Software - The WCM software

itself.

• Analytics Software - both system side web/server/

WCM log analytics and website/IP (for example

Google Analytics) tracking software.

• Firewalls & Security - the range of hardware and

software needed to provide system security.

• Software Installation - the installation of all these

software elements and their integration with each

other.

• Back-ups - the data and system back up for the

purpose of recovery and compliance.

• Disaster Recovery - the optional active or passive

disaster recovery system; software, servers and

infrastructure, needed to recover the solution.

• Software Maintenance - the annual percentage cost

of software maintenance associated with version

upgrades and patches.

• Managed Services / System Support - the additional

support and maintenance services associated with

maintaining the system and responding to

day-to-day issues.

• Add-on Features - the cost of implementation of

additional software features as they are released by

vendors.

There is no distinction made here between on-premise

and externally hosted deployments as in many cases

the difference from a delivery perspective is only one of

overall governance and control of infrastructure.

New Hosted Software Services SolutionsWith respect to new hosted software services solutions

the essential difference is that many or all of the

elements above are combined into a single service.

For the purpose of this document then, Web Content

Management Software Service is the combination of all

of the traditional installed and licensed services into one

single software service.

There is no distinction made between cloud or dedicated

or either out-sourced or in-sourced hosted solutions

although it is recognised that there are major differences

to be considered in terms of scalability, territoriality,

compliance and performance across these options. These

factors are considered elsewhere in the document and

may form the basis of further work.

Understanding as a Software Service for Web Content Management and Content Delivery Networks. www.ptools.com

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Exclusions & AssumptionsThere are in addition a number of elements that are

essential to the overall solution which may or may not

form part of a new hosted software services solution

and can logically be listed as relevant to both potential

options. For the purpose of this document these

elements therefore are excluded:

• Template design and development - the broad

requirement of design and development

encompassing everything from user experience to

usability and branding.

• Search Engine Optimisation - the additional SEO /

SEM specific services needed to ensure search results

optimisation.

• Domain IP Control - the domain name control

services needed to align the system with email and

domain name control servers.

• Add-on Applications - the various additional

applications, like eZine, Document Management, and

others associated with individual deployments.

It is worth noting a number of other elements that are

relevant to many solutions but are not included because

of the extent to which they represent a differentiation

between traditional installed and licensed solutions and

new hosted software services solutions is minimal. For

the purpose of this document these elements therefore

are also excluded:

• Solution Research & Evaluation - the time and effort

taken to prequalify potential suppliers and evaluate

vendor offerings prior to formal engagement.

• Tendering & Contracting - the preparation and

distribution of tender documents, evaluation of

responses, and contracting with the preferred

suppliers.

• Specification & Project Management - the pre-

deployment specification of requirements and

internal project management associated with

delivery of the solution.

• Training & Resourcing - the overhead of staff

training, content development, site management

and customer response associated successful site

delivery.

• Documentation & Compliance - the software and

services documentation associated with escrow and

handover of the solution.

Although these elements are excluded from the analysis

in almost all cases the cost benefit of acquiring the

elements is significantly improved in the case of new

hosted software services solutions. The reasons for this

vary but in general the shorter acquisition process and

accelerated on-ramp associated with new hosted software

services solutions, of its nature, reduces the associated

cost, time and effort needed. In addition the necessary

standardisation of these elements in new hosted software

services solutions although pre-determined, means that

the total cost of adoption is decreased and associated

cost, time and effort is further reduced.

Document DetailsThis document is based on comparison of current and

historical deployments of pTools WCM in new software

services and traditional installed license environments.

The authors, Tom Skinner and Dmitry Strigoun, have

worked in new product development, network security,

and web content management software for twenty years.

They hold B.Sc., M.Bs., M.Phil. and M.Sc. respectively.


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For further information, to access pTools demo, or to

sign-up for a webinar, please visit our website

www.ptools.com

If you would like to learn more about this document,

please email us at [email protected]

Alternatively please contact us directly at one of the

locations listed below.

Information & Contacts

pTools IrelandContent House46 Stephens PlaceDublin 2, Ireland

+353 (0) 1 678 [email protected]

pTools Canada 230 King Street EastToronto, OntarioCanada, M5A 1K5

+1 (416) 254 [email protected]

pTools UK4-5 Bonhill StreetLondon, EC2A 4BXUnited Kingdom

+44 (0844) 870 [email protected]

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cost benefit of software as a service forweb content management andcontent delivery networks

Documents

cost benefit of software

understanding software

licensed software solutions

software service forms

annual software support

overview ptools software

content transactions

content contributors