HEAT Blog

What Should You Get Out of Your Hybrid Solution (Part 2)

ROI CalculatorAfter recently posting my last blog about what you should get out of your Hybrid Service Management solution I had a few more thoughts on this that I wanted to address. 
 
Not only are their operational benefits but there are benefits to the bottom line, cost. You can optimize the deployment of applications in the business. It also makes your people more productive because they always have access to their applications in the best possible way.
 
One reason companies are unlikely to stick with a cloud-only solution though is it gets expensive as the years go by. Cloud does reduce your upfront capital investment because there’s no hardware or software to buy or install. But if you run a good TCO model, you’ll quickly see the benefit is short-lived. It’s the same as leasing vs. buying a car. If you’re going to own the car for ten years, it’s a far better deal to buy it than lease. 
 
Say you have 100 users and you’re going to spend $250,000 on a perpetual license for your ITSM solution. You will have an initial expense but you’ll own that license forever. Now consider covering those users with a cloud-based ITSM solution instead. Maybe that costs you $100,000 in year one, which of course looks like a lot less than $250,000. But then you pay another $100,000 in year 2 and again in year three and so on. Depending on the TCO model you use, you’ll likely find somewhere in year three, around 30-32 months, the lines cross and the premise-based option becomes less expensive. 
 
And that’s not even taking into account others costs, as the Gartner report points out. “SaaS-based ITSM tools appear to provide cost savings. However, failure to account for the resources to implement, integrate, operate and maintain the tools will result in the inability to extract value and achieve the expected ROI,” Gartner says. 
 
IT executives don’t have to buy the notion that an ITSM solution has to be one or the other – cloud- or premise-based. The fact is, we’re going to be living in a hybrid IT world for the foreseeable future. It makes sense to have an ITSM solution that is flexible enough to give you the best of both worlds.