SaaS (Software as a Service) in ITSM has fundamentally changed the cost battle by reducing the ongoing maintenance costs, resource costs and infrastructure costs. It’s no secret that the legacy ITSM tool vendors continue to lose market share to the “innovators” – those new providers who offer on demand or software-as-a-service (SaaS)-based ITSM systems designed for the Web era.
Legacy ITSM solutions were pricey from the beginning with added licensing and customization cost charged by these companies. ITSM wins takes time and the initial investment on these systems is huge. This is where SaaS based ITSM solution competition is heating up. We know Service Now is in the market for a while and it is one of the pioneers in SaaS based ITSM solution. BMC was considered as a well marketed and powerful legacy ITSM tool until they came up with the Remedy On-Demand SaaS solution.
In this blog I am going to give some insight on some of SaaS features of these tools and also discuss briefly on the TCO (True Cost of Ownership). If you are interested in mere feature comparison between these two tools, please go through my blog BMC Remedy Vs Service Now.
If you already have an ITSM tool or if you are planning to do an upgrade to the existing system, total cost of ownership is the key. You should not be looking at just the software costs , you need to look at the upgrade costs, module costs, customization costs and additional license costs.
Service Now saves money on all new implementations compared to HP Service Desk, HP ServiceCenter and BMC Remedy implementations. Service Now customers often replace annual maintenance fees with a single subscription to all applications, implementation time and cost savings of 75% compared to legacy ITSM tool upgrades and 100% infrastructure and upgrade cost avoidance. Service Now substantially reduces ITSM tool TCO. For upgrading the existing implementations, you might need to do a full analysis on how much money you have already spend on the legacy system before deciding on SaaS based system.
For the price of a Service Now subscription, you get the full range of ITSM capabilities, including problem, change, release, configuration, request, IT cost, service portfolio, field service, knowledge, service-level, asset portfolio/contract, project and portfolio management, along with shared services applications that extend the services you can offer to include HR, facilities and sales force automation. All that, plus a service catalog and a configuration management database (CMDB) too. You also get automatic upgrades – thrice yearly – that preserve all customizations, continuous monitoring of instances, 24/7 support, full redundancy and more.
TCO (Total Cost of Ownership) for Service Now
Naturally, if you already have an ITSM application in use that you’d like to upgrade, then you have sunk costs and don’t have to account for an initial outlay. However, getting a solution from a tool vendor that matches what Service Now offers on a complete subscription basis will likely mean buying additional licenses or acquiring completely new application modules. Those will cost you.
You will not need to factor an annual maintenance fee into a Service Now subscription. It’s nonexistent. The Service Now annual subscription includes access to all applications (including multiple instances), disaster recovery services, support, upgrades, application hosting, admin training and continuous maintenance and monitoring of your instance. Obviously, one of the glory points of SaaS is that no infrastructure is required. You’ve got no such luck with a legacy ITSM tool implementation, for which you must account for the server infrastructure on which the applications run as well as for the corresponding application and database server and relational database management system licenses.
Factors to Consider in Legacy IT tools like Remedy
- Upgrade Costs for Remedy Service Management tools
- Remedy Maintenance fee and NPV for next 5 or 10 years.
- Infrastructure and labor Costs for running Remedy internally
- Customization cost and modules included in the package.
Till now I was discussing about Remedy Legacy tool and you will be wondering why I am not talking about Remedy On-Demand solution which is marketed as a SaaS based platform. Let us take a quick look at some facts about Remedy On-Demand tool. Unfortunately BMC is not build as a SaaS tool from the ground up. What BMC has done is taking the existing Remedy Legacy System and hosted as a web platform with few tweaks. The current version is crippled with Performance problem and doesn’t really reap the benefits of a SaaS platform. On top of that they still charge the companies for the upgrade and maintenance costs. Agree that BMC has a very good legacy System, but they have to come a long way to provide a cost effective true SaaS product.