The Real Cost of SaaS
SaaS, or Software as a Service is being hailed as the greatest thing since slice bread. It’s got loads of advantages over it’s traditional desktop equivalents. For developers and entrepreneurs it’s a dream business model, but for consumers it can actually end up burning quite a large hole in their pocket, especially if they need to use more then a few services at once.
To highlight this I’ve done a little test to see much it costs to run all my favourite SaaS services with an average paid account.
Right now, I use 10 online services that I either pay for or expect to pay for at some point in the future. These are:
- Freshbooks – $24 per month
- Campaign Monitor – $5 for each sent newsletter plus 1c per recipient
- Google Apps – $50 per user per year
- GooSync – £19.95 ($35.05) per year
- Lighthouse – $24 per month
- LogMeIn – $69 per PC per year
- PutPlace – Free, for now.
- Remember the Milk – $25 per year (optional contribution)
- Springloops – $32 per month
- Basecamp – $49 per month
Not all of these pricings are based on a yearly or monthly charge, so lets make some assumptions:
- That on Campaign Monitor I’ll send 12 newsletters a year to 200 people ($5x12x$2.00=$120)
- That I need 3 Google App accounts ($50×3=$150)
- That I need to remotely manage 4 servers on LogMeIn ($69×4=$276)
Now lets add it all up.
Service |
Monthly Cost |
Annual Cost |
Freshbooks | $24 | $288 |
Campaign Monitor | $10 | $120 |
Google Apps | $12.50 | $150 |
Lighthouse | $24 | $288 |
LogMeIn | $23 | $276 |
Remember the Milk | $2.08 | $25 |
Springloops | $32 | $384 |
Basecamp | $49 | $588 |
GRAND TOTAL | $176.58 | $2,119 |
So that’s $2,119 per year for all the online software I need to run my personal life and my small business. Is this an acceptable cost? Probably. But the few dollars a month really add up once you start to use more then a couple of services.
Compared to the licensing costs of Windows XP and Microsoft Office (which are one off’s) these costs are seriously high, so although SaaS provides new and exciting opportunities it can also be expensive compared to traditional software solutions.
So the lesson here has to be that before deciding to pay for a subscription based SaaS service, make sure you’re 100% confident you need it for your business. Otherwise it could end up costing you more then you expected.

Posted by Iarfhlaith |
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