On-premises PLM vs. SaaS PLM – Operational Savings with SaaS

By RaviNandurdikar

There are lots of articles and information available on the internet today discussing the advantages and disadvantages of various PLM deployment options, including on-premises, Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). Based on your business needs, company size, IT resource capacity, etc. — each option has its own benefits.   If you are a small to medium-sized business, SaaS may be the most viable option for you. With SaaS PLM – you can reduce costs and get up and running quickly with PLM. In this blog, I’ll highlight considerations around the expenses required for on-premises PLM vs. SaaS PLM.

Capital and Operational expenses

Capital expense examples include the purchase of server hardware, PLM applications, database licenses, and storage such as SAN or NAS box.  Operational expense examples include IT administration, IT security, hardware, and software maintenance, backup, disaster recovery, deployment, etc.  

With SaaS PLM, you just pay the PLM application monthly subscription fee and you are pretty much done – all of the Operational expenses are included in the subscription fee.

SaaS PLM and Operational Savings

Let’s take an example, a small 30 user company wants to deploy a PLM solution. They need to choose between an on-premises PLM deployment vs. SaaS PLM. Let’s do the math…

On-premises Capital expenses considerations include:

  • 18 GB RAM server (~ 400MB / PLM Users + OS and other processes)
  • Operating System
  • Complete backup system like Veritas, etc.
  • PLM and Database application cost

For an expense estimate – find out the cost for all of the above, and then divide it by 4 to 5 years as typically all these things are only valid for 4 – to a maximum of 5 years.

On-premises Operational expenses considerations include:

  • Infrastructure Management Cost (IT Admin) – IT Admin person salary or 3rd party contract cost
  • Server facility and energy cost for Servers – physical space to keep the server, electricity, and server cooling charges
  • Maintenance & Repair Costs – for hardware maintenance, antivirus protection, and disaster recovery setup
  • Database and PLM maintenance, enhancements, and support costs

Find out the cost for all of the above and add it in to the per year Capital expense cost.

Now, take the total Operation and Capital costs, and compare them with a one-year PLM subscription cost for 30 users. I am sure you will find it is at least 30 – 40 % less expensive than the on-premises option.

Whether on-premises or SaaS deployment, Siemens is ready to support you.  But if you’re looking for SaaS PLM in the Cloud, read more about Teamcenter X.

Looking for more information on SaaS PLM in the Cloud, operated by Siemens? 

Leave a Reply

This article first appeared on the Siemens Digital Industries Software blog at