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

Contents
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.

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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

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

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 theres also consideration of what needs to be considered when comparing new WCM software services with licensed software solutions. Theres 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 costbenefits 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 ongoing 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.

Were 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 Analysis

Small 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.
Cost

Traditional WCM Software Solutions New WCM Software Services

Quarters

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%.

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

2 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. 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 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.

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.
Cost

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.
Cost

Traditional WCM Software Solutions New WCM Software Services

Quarters

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.
Traditional WCM Software Solutions New WCM Software Services
Quarters

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

3 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. 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 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. 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.

Conclusions
Overall 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.

Source References
1. Saas will represent over 80% of the public cloud marketplace by 2020 - Forrester 'Sizing the Cloud' 2011 2. Canada, USA and UK among the worlds 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

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

Overview & Methodology

This 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.

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 customers or end users 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 Content Delivery Management as a Network & Cloud Software Service

To 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.

The 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.

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

5 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. 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.

Traditional Installed Software Solutions

The 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, rackspace, 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.

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 Solutions

With 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

Exclusions & Assumptions

There 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.

Specification & Project Management - the predeployment 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.

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.

Document Details
This 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.

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

Information & Contacts

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 saas@ptools.com Alternatively please contact us directly at one of the locations listed below.

pTools Ireland Content House 46 Stephens Place Dublin 2, Ireland +353 (0) 1 678 9311 dublin@ptools.com

pTools Canada 230 King Street East Toronto, Ontario Canada, M5A 1K5 +1 (416) 254 4129 toronto@ptools.com

pTools UK 4-5 Bonhill Street London, EC2A 4BX United Kingdom +44 (0844) 870 6541 london@ptools.com