Wednesday, January 26, 2011

The Real Story: The High Cost of Microsoft SharePoint

View Comments
As I was checking my feeds I stumbled upon an interesting bit of news.  I've actually known this for a long time and I'm glad that this is surfacing via other channels.

When I went to the Enterprise 2.0 Conference in Boston in 2010, I attended a session by Tony Byrne where he stated that for every $1 spent on a SharePoint license $6-$9 additional dollars would need to be spent on services/customization/etc (because SharePoint doesn't do anything out of the box).  That's huge!  In fact, Microsoft is proud of this fact.

The Real Story Group, where Tony now works, recently posted an article called: The high cost of Microsoft SharePoint.  In it, the stats are now updated:

Microsoft estimates that you the customer will spend a total of $6.2 Billion on services related to SharePoint in 2011.  According to my rough estimate, you can add $1.7 Billion in 2011 SharePoint license revenue on top. This for a product that many sales folk continue to tout as low cost, and sometimes even as free.
So again, businesses will pay ~$5-$6 on services for every $1 spent on licenses!  Whoah! Can businesses really afford to pay so much in these economic times?  My guess is that customers don't know they are paying so much because Microsoft does a good job deceiving them and hiding the costs.  The Real Story Group puts this number into perspective by saying that 50 countries in the world have a GDP less than what the world spends on SharePoint (i.e. $9 billion)!

In fact, another blog entry caught my attention this week where Vaughan Rivett talks about how companies in New Zealand are picking IBM Lotus Quickr over Microsoft SharePoint.  The two reasons why companies are picking IBM over Microsoft?  According to Vaughan:

  1. Quickr is ready to go straight out of the box without too many customizations
  2. Customers are complaining about the hidden costs in deploying SharePoint, plus the additional services and $$$ required to make it ready for collaboration

So are you still considering SharePoint? Make sure that you read this so that you are aware how much you are going to spend (and make sure you have a lot of cash in that wallet).
blog comments powered by Disqus