Calculating Your Total Cost of Ownership (TCO) for Hosting Sage In the Cloud for Small Businesses

A British company, Sage is the third largest Enterprise Resource Planning software company in the world, behind Oracle and SAP. However, it is the ERP brand with the most small business customers, over 6 million of them around the world. Traditionally, ERP is a suite of integrated tools addressing the management needs of businesses. Not all the tools apply to all kinds of businesses. They include:

• Product planning and purchasing
• Manufacturing processes
• Marketing and sales
• Supply chain and inventory management
• Shipping and payment
• Accounting and payroll

Sage offers a product line of ERP and Customer Relationship Management tools that includes:

• Sage 100 ERP – SMB including light manufacturers.
• Sage 300 ERP – SMB with multiple locations that use multiple languages and currencies
• Sage 500 ERP – For larger businesses needing financial statements, business intelligence and reporting, supply chain management, human resources and payroll, inventory management and warehousing, time and project management, manufacturing and sales management. For small to mid-sized distributors and light manufacturers within the United States
• Sage ERP X3 – For even larger businesses needing to manage procurement, manufacturing and financial statements
• Sage CRM – Customer Relationship Management program

Before cloud services all Sage programs, like all programs, ran within the enterprise, on the business’s servers, on-premises.

However, now Sage offers its services through cloud hosting through such hosting companies as CompuData. That makes it a Software as a Service product. Instead of paying Sage a large fee to own your installation on your own servers, you pay to a subscription fee to access it. You never pay to buy it or for upgrades. You don’t own it, you just use it.

From an accounting standpoint, SaaS products are not a capital investment to amortize over time, but a regular expense that comes out of gross income. It’s a regular, predictable, manageable cost of doing business.

How Large is Your Business? What Business Management Tools Do You Need?

Step One to calculating your total cost of ownership is to carry out a thorough needs analysis to determine how Sage products can help your particular business.

Obviously, if you are not a manufacturer, you don’t need any of the manufacturing modules. However, every business needs accounting and human resources and payroll.

What Level of Service Do You Require?

Step Two is to decide upon the level of service. That means, what is the percentage of uptime you require?

Data centers do not perform equally well. To remain up and running requires a lot of redundancy. Redundant power supplies, redundant processing, redundant cooling systems and redundant storage. The equipment and the required staff cost money.

Therefore, how much uptime data centers can guarantee varies according to how much money they’re willing to spend on this. And, therefore, the more they spend, the more they charge their customers.

However, realize that if your cannot access Sage because your provider is down, that can cost your business a lot more money in lost revenue, wasted employee time and inefficient operations.

One Sage host may guarantee an uptime of 99% in the Service Level Agreement, but that means 7.3 hours of downtime a month. What if it’s on your busiest day of the month? What if it’s on a day you’re running your payroll? Even 99.9% uptime allows for 44 minutes of service disruption a month.

With 99.99% guaranteed uptime, that’s just 4 minutes in a month of downtime.

At CompuData, our SLA guarantees 99.99% uptime for hosting Sage in the cloud. Since 2013 the actual downtime has amounted to only 2.6 seconds per month. That’s 99.9999% actual uptime.

Your Deployment Options

The options include:

• Public cloud
• Private cloud
• Virtual private cloud
• Hybrid of on-premise and cloud

The public cloud serves for many purposes, but it is not as secure. For hosting the private financial data of your company, you’ll likely prefer one of the more private options.

Analyze the Costs of Your Current Situation

If you now have Sage, that’s a significant investment, and you rightly fear change. However, CompuData can help you transition to the cloud to get the many benefits of that environment without disrupting your operations with new financial software. Simply take what you have and put it in the cloud.

That way, you can reduce your enterprise investment in IT infrastructure, freeing up resources to increase your return on capital. Always know your goals. Hosting sage in the cloud can reduce your expenses, but that will vary with every organization. Make sure the hosting provider you use has a lot of experience with Sage.

A full-service, IT support company, CompuData will advise you on which edition of hosting Sage in the cloud will best meet your business needs, as well as how to calculate your total cost of ownership. They have over 25 years of experience supporting and implementing Sage. Contact us today.