How to Calculate the Total Cost of Ownership of a Content Management System
Choosing a new content management system (CMS) can be challenging. In-depth product evaluation and costs form a big part of the decision process. That's why it's crucial to consider the total cost of ownership (TCO).
What Is TCO and Why Does It Matter?
There are many things to consider when choosing a new CMS for your organization, and cost comparison should be an integral part of the process. It's tempting to shortlist your preferred solutions and compare just the license and subscription fees. However, there's much more to consider.
So what does TCO mean? In a nutshell, TCO provides a framework for good financial analysis of IT investments. It can help you understand the value and ROI of software to your business.
Key TCO Components
We have compared the TCO of a headless CMS (Kentico Cloud) with traditional enterprise CMSs hosted in the Cloud (Sitecore, Adobe, and SDL Tridion), and created a TCO calculator, which evaluates five key components.
1. Content Production
The essence of every digital project is content. CMSs with collaboration features, such as Kentico Cloud, can aid your content production process. A CMS with the right content management capabilities can save digital teams valuable time, which can lead to increased productivity and higher ROI.
2. Initial and Ongoing Development
Development costs represent one of the most significant costs on every digital project. Headless CMSs can be significantly more efficient compared to traditional CMSs due to:
- Flexibility: True headless CMSs are technology-agnostic, which means developers can use any programming language they choose.
- Accessibility and control: With a headless CMS, content is accessible to any channel or device via API, including web, mobile, kiosks, chatbots, AR/VR, and wearables. It allows companies to innovate faster, as they deliver content components or blocks, not pages.
- Speed: A headless CMS has a super-fast API, delivering content to any device in almost no time. Content and development teams can also work simultaneously, without being a bottleneck for each other.
- Maintenance: With a headless CMS, developers can focus on delivering new features and improving projects instead of focusing on upgrades and maintenance.
3. Server, Infrastructure, and Web Hosting
When choosing a CMS, you must consider costs for:
- Infrastructure and storage
- Performance and scaling
- Development support, support for deployment, and testing
For large-scale projects, infrastructure costs can easily surpass 50,000 USD per year. Imagine paying that just for running the infrastructure!
With a headless CMS, the vendor takes care of everything, and the customer only chooses where they want to host their application.
4. Initial Installation and Setup
It can be costly and lengthy to install and set up a traditional CMS and run it in the Cloud, compared to a headless CMS that is a true Cloud service. TCO calculations should include the time it takes to manage the installation, system administrator costs, and developer costs.
5. 24/7 Support
24/7 support is not typically included in the cost of a CMS license. Headless CMS vendors, such as Kentico Cloud, include 24/7 support in enterprise plans and customers only pay for an SLA on response time if requested. The support packages for traditional CMSs, such as Sitecore, Episerver, and Drupal, can start from 10,000 USD per year.
The anticipated enterprise costs of Kentico Cloud for a large manufacturing company can be more cost-effective than other CMSs, which offer license fees that start from 100,000 USD.
TCO for the first year may look like the below if we assume the following:
- The company has an in-house team of five developers.
- They plan to spend three months on initial development.
- The content team will produce 250 content items in the first year, and 50 blog posts and other content pieces each following year.
TCO for the first year is much more favorable with a headless CMS, but it's also important to look at the long-term TCO. Here's a snapshot of implementing a new CMS for a large manufacturing company over three years:
As you can tell, the most significant differences in the TCO of CMSs is created by content production and development costs, not by the license or subscription fees. If there is one thing you should remember, it's that you should always include more components than just software costs when calculating TCO.
Get Your Free TCO Calculator
We understand that organizations have to invest considerable resources to maintain talent. By choosing your next CMS carefully, you will be able to find a solution like a Content-as-a-Service platform that saves your teams time and better equips them with the features that will make their lives easier.
Want to calculate TCO for your next project? Contact us to get your free calculator. We'll be happy to share our framework with you!