Back to CMMS Basics, Part 6: How Much Should I Expect to Spend and What Are My Buying Options?

8th November 2017

As we continue our series, we’ve arrived at the two biggest questions about CMMS software—how much should I expect to spend, and what are my buying options?

Software prices vary significantly depending on your needs and the size of your operations. Typically, you’ll pay for the base software and then the number of licenses you need. Advanced features also will add to the cost.

Price-Range Estimates

Start by asking sales reps to provide price-range estimates. The more specific you are about your needs, the more accurate those estimates will be.

These price range estimates will tell you if their product is a good fit. Then you can move forward with the companies who sell software in your budget range. You can ask a sales rep to refine the pricing as you get more specific about your needs.

The cost of CMMS software is more than just the price of the software itself. When you ask for a CMMS software quote, make sure it includes…

  • Startup training
  • Integration services
  • Data migration from legacy systems
  • Hosting
  • Maintenance/support agreements

Calculate the five-year total cost of ownership of all these things to get an accurate comparison.

Pricing Models

Typically, there are two ways to purchase CMMS software.

Subscription pricing is also known as Software as a Service, or “SaaS.” When you opt for SaaS, you’re renting the software for a monthly or yearly fee. SaaS is a common option today—but it may not be the best one for you.

Advantages of SaaS

  • Easier on cash flow up front and over the first 2-3 years
  • May be able to purchase it without a formal procurement process (i.e., you're just signing up for a service)
  • You can try the product and the vendor without fully committing

Disadvantages of SaaS

  • Higher total cost over the long term
  • Vulnerability to price increases
  • You never own the software
  • Stop paying and you lose access

Licensed Purchase

With this option, you will purchase a license to use the software (in practical terms, forever) for a one-time fee. Typically, you will also have the option of purchasing or renewing a yearly maintenance agreement that includes software updates, tech support, hosting services, and access to training. It’s usually charged as a percentage of the software’s original price.

Advantages of Licensed Purchase

  • Less expensive over the long run than the never-ending subscription. Usually it’s a 2-3 year break even vs. SaaS pricing.
  • You own it. If your company’s budget gets tight one year and you don’t get your yearly allotment, you will still be able to use your software because you own the software license.

Disadvantage of Licensed Purchase

  • Higher upfront cost

If you’re leaning toward SaaS model, ask vendors if you can switch to a license purchase model if your situation changes. Also, make sure the method you choose works with your plans to host the application.

Next time, we’ll explain why you need a software demo or trial. Until then, contact us with questions.

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