Estimating the SharePoint cost for your organization can be tricky because it exists in many forms, depending on the company that uses it, such that deployments are rarely ever exactly the same. As a result, it’s often difficult for businesses to determine SharePoint TCO — their Total SharePoint Cost of Ownership.

Because we have since received a flood of requests for a more granular breakdown of SharePoint cost, we created a SharePoint Calculator to help you understand your SharePoint TCO and below we explain how our calculator helps estimate SharePoint cost factors. Total SharePoint cost may be greater than expected, so it’s important for companies to understand them as they evaluate alternative cloud solutions like Huddle.

SharePoint Cost #1: Software Licensing

To keep things as simple as possible, we make several assumptions:

  • You procure SharePoint as part of an Enterprise Agreement
  • You purchase SQL Server using the per processor/core model
  • You are using the complete Microsoft stack of solutions (Forefront for SharePoint for anti-virus and Unified Access Gateway for publishing SharePoint outside your firewall).

So, your software licensing cost will be (note a CAL is a Client Access License, Microsoft’s per user terminology):

Software Licensing = Number of Internal Users * (cost of the Microsoft Core CAL Suite + cost of UAG CAL + cost of anti-virus) + (cost of SQL Server per proc * number of SQL procs) + (cost of Windows Server * number of SharePoint Servers and number of SQL Servers) + (cost of SharePoint Server * number of SharePoint Servers) + (cost of backup solution * number of SharePoint servers).

Now, you also need to factor in the cost of external users. External users cannot be covered by an Enterprise Agreement’s Core CAL, therefore we need to break it down into component parts:

External user software licensing = Number of External Users * (cost of Windows Server CAL + cost of SharePoint CAL + cost of UAG CAL).

There’s a further complication with all of this, as some of this cost would count as capital expenditure while others would count as operational expenditure. To enable parity with cloud services that include the price of service updates in the total cost, we should include Microsoft’s Software Assurance (maintenance) cost. This is already included within an Enterprise Agreement, but you’ll need to know how much of your overall licensing cost is for SA vs. the capital licensing cost (typically 30% over 3 years). Additionally, licensing such as the anti-virus solution is a subscription cost and should be calculated as opex.

SharePoint Cost #2: Hardware

Here we use the HP SharePoint Sizer, which does a lot of the grunt work to ascertain hardware requirements based upon a particular or typical user load. It’s worth noting that the HP model defaults to the more expensive blade option and tends to bias a Storage Area Network (SAN)-based solution over direct-attached storage.

You may also need to consider the external access appliance and WAN optimization between sites if you have a particularly large deployment. Finally, power consumption and cooling needs to be calculated, which can be done by multiplying your server wattage by your kW/h price for the entire year:

Power cost = (Number of servers * Server wattage * 24 * 365 * kW/H cost) / 1000

You are dividing by 1000 to account for the kilowatt cost. As a rough rule of thumb, for cooling costs you can simply double your power cost.

SharePoint Cost #3: People

Compared with cloud software, SharePoint administration is a non-trivial exercise and often requires specialized training and in many instances a dedicated (or multiple dedicated) operational staff. SharePoint touches many points in an IT business: the network, security, databases and desktop, so the number of support staff can increase quickly. Add in helpdesk staff to support external users who have forgotten their password and content managers to maintain and secure the individual team sites and even a modest installation can require several people to spend an inordinate amount of time running a SharePoint environment.

Therefore, to calculate your SharePoint administrator costs, look at the average fully burdened salary of a SharePoint administrator, which is currently about $92k in the United Kingdom and $102k in the US.

The vast majority of SharePoint installations do not happen without some initial consultancy from a Microsoft partner. Anything more than a basic consultancy (which may include architecture and setup but not branding or customization) will further add to your costs.

To summarize, your people cost would be:

People cost = (Number of SharePoint and IT admins + Number of knowledge managers) * Average fully burden salary + Initial SharePoint consultancy

People (apart from the consultancy) and maintenance on the software licenses will count towards opex with the remainder as capex. Multiply your opex by three (the typical length of an EA), add your capex and you have your SharePoint TCO!

Request a Demo

© 2006 - 2021. All Rights Reserved.