Five Considerations When Analyzing Total Cost of Ownership (TCO)
Designed to find lifetime costs of acquiring and operating software, the best TCO analysis brings out "hidden" or non-obvious ownership expenses involved in making purchase decisions or planning budgets.
1. Purchasing / License Pricing
- Free — Thousands of companies worldwide run their business on the completely free and open source solution, xTuple PostBooks®.
- Annual License — Companies who want additional vertical functionality, or are more comfortable with a commercial software license, can buy based on number of users needed now and add more users as requirements change, only paying for the users, as needed, pro-rated.
- Perpetual License — Paid once and does not need to be renewed annually.
2. Software Pricing
- Users — xTuple users are Concurrent to “share” usage rather than more costly Named users. Everyone can have a sign-on. xTuple only counts those logged on at any one time; shop floor employees using the system merely to clock in and out of jobs are not counted against you.
- Reports — All licensed users of xTuple ERP have access to OpenRPT report writer rather than requiring a third party report writer (e.g., Crystal Reports), which carry additional license costs.
- Extras — Other vendors charge extra fees for additional companies, locations, servers, processors or environments. xTuple does not.
3. Environment Pricing
- Vendor requirements — Microsoft-centric solutions require Office for each desktop user as well as expensive, resource-intensive Exchange mail server and Outlook clients. Save $1000s annually using OpenOffice.org for the same functionality, without the expense.
- Database — xTuple ERP runs on PostgreSQL unlike most vendors who require costly MSFT SQL/Server or the Oracle database.
- Server operating system — Initial and annual costs associated with a Windows or Linux/Unix server can add up as well as additional costs with MSFT Windows Server/CALs (Client Access Licenses).
- Middleware software — Many vendors require additional software (and fees) to run their application such as an Application Server, Web Server or Terminal Services Software for Wide Area Network or home connectivity.
- Support — From free community resources to paid expert consulting, all support options are available for both free PostBooks® and commercially-licensed xTuple ERP Editions. Pricing is published up-front.
4. Hardware Pricing
- Upgrades — xTuple ERP is platform-agnostic. You can leverage existing desktop or laptop hardware and technologies. No need to upgrade all computers to one operating system.
- Server — xTuple ERP runs on Windows, Mac and Linux (which may be your lowest TCO) servers; you may already have a usable server today, or we offer pre-configured servers.
5. Open Source vs. Closed Source
- Modifications — When upgrading to the next software release, mods need to be re-applied. Closed source solutions do NOT make their source code available; modifications MUST be completed by the original vendor, often at significant cost, if available at all.
- Control — You don’t have to be a programmer to appreciate the fact that possessing your software’s source code gives you ultimate control over your business management solution. xTuple’s Community Development model means we work with customers, including users of the free PostBooks® Edition, to incorporate modifications they need into the base application. Required features are part of the software, documented and fully supported, another way to help keep down the Total Cost of Ownership over the life of the software’s use in your organization.
Five Considerations When Analyzing Total Cost of Ownership (PDF)
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