I need your help. I am conducting research into business intelligence (BI) software prices: averages, differences between license and subscription deals, differences between small and large vendor offerings, etc. In order to help our clients look beyond just the software pricese and consider the fully loaded total cost of ownership, I also want to throw in service and hardware costs (I already have data on annual maintenance and initial training costs). I’ve been in this market long enough to understand that the only correct answer is “It depends” — on the levels of data complexity, data cleanliness, use cases, and many other factors. But, if I could pin you down to a ballpark formula for budgeting and estimation purposes, what would that be? Here are my initial thoughts — based on experience, other relevant research, etc.
Initial hardware as a percentage of software cost = 33% to 50%
Ongoing hardware maintenance = 20% of the initial hardware cost
Initial design, build, implementation of services. Our rule of thumb has always been 300% to 700%, but that obviously varies by deal sizes. So here’s what I came up with:
Less than $100,000 in software = 100% in services
$100,000 to $500,000 in software = 300% in services
$500,000 to $2 million in software = 200% in services
$2 million to $10 million in software = 50% in services
More than $10 million in software = 25% in services
Then 20% of the initial software cost for ongoing maintenance, enhancements, and support
Thoughts? Again, I am not looking for “it depends” answers, but rather for some numbers and ranges based on your experience.