One of the most frequent questions we get asked by enterprise prospects and even existing customers in regard to a hosted Project Server and SharePoint cloud service is: “Should I buy my product licenses/CALs, or rent them from you.” The short answer is: “BUY THEM.”
Generally speaking, when you look at the return on investment over a period of time, it’s just more cost-effective for enterprise customers to buy (purchase) their own product licenses/CALS then to rent them from us. And when we say “rent,” the licenses, we mean include these rental fees into the overall monthly service fee for cloud/hosting services. If we take a specific example, say a 500 user Project Server 2013 deployment (including SharePoint and SQL), the difference in the monthly hosting fees with and without rental license fees can vary from a high of $33/user/month, to a low of $8.50/user/month.
Depending on the details of a customer’s licensing agreement with Microsoft, the breakeven point for purchasing licenses from Microsoft over renting them from us is anywhere from 12 to 18 months.
Many of our enterprise customers (where enterprises are defined as Global 2000, Fortune 500 or Fortune 100 organizations) purchase their licenses, while some have a mix of purchased and/or rented. What’s interesting is that enterprises that rent licenses tend to do so more often in the initial phases of a cloud deployment. After they are assured that their deployment meets their expectations and user adoption picks up, they switch to purchasing licenses as they move into a full scale deployment.
If you’d like to experiment with understanding cost differentials, try our online pricing configurator for Project Server, SharePoint and CRM buy clicking “rent” versus “purchase” radio buttons and compare the differences. www.projecthosts.com/pricing