On a specific request from one of our customers, we recently did a detailed analaysis of the various alternatives of building and migrating a SaaS application on .NET, their relative costs and TCO.
|Hosting – Windows + SQL||Amazon EC2|
|No of Tenants||50|
|No of users per tenant||200|
|VM Spec for Multi-tenant Maturity Model 2 (VM1) – One instance / tenant||Mid|
|VM Spec for Multi tenant Maturity Model 4 (VM2) – Shared Instance & DB||Large|
|Cost per year per VM1 – US$ (US$ 0.29 / hour) – Database included||2,540|
|Cost per year per VM2 – US$ (US$ 0.48 / hour) – Database included||4,205|
|No of VM instances required for Multi-tenant Maturity Model 4 (VM2)||1|
|Storage cost excluded as the difference between multiple models might be marginal|
The first part of the analysis is to compare the development and deployment costs of a multi tenant application @ Maturity Model 2 and 4. We used the cost of Amazon EC2 instance as a reference. In a MMM 2 application, a separate instance is required for every new customer / tenant. Whereas in a MMM 4 application, the same instance can be used to support multiple tenants / customers. However the development cost of a MMM 4 application is more than that of a MMM 2 application. So the analysis is to find whether it makes sense to invest in the additional development time to save on the deployment costs. The no. of tenants was assumed to be 50 which is a very conservative number even for a start-up ISV.
|(A) Development (Business Application)||Units|
|No of Developers||10|
|Development time for equiv on-premise application||8 months|
|Cost per people month for business application||4,000 US$|
|(B) Multi-tenant SaaS Framework build (in house)|
|Effort required to build multi-tenant SaaS framework||30 people months|
|Cost per people month for framework development||6,000 US$|
|(C) Multi-tenant SaaS Framework buy (celloSaaS)|
|License fee per developer for celloSaaS ( Development)||2,000 US$|
|Annual Fee per developer for celloSaaS (Production)||400 US$|
|Reusablity of existing code (% of people months saved from (A)||50%|
|Maintenance of business application – 20% of development effort||16 people months p.a|
|Maintenance of Multi-tenant framework (in house) – 20% of framework effort||6 people months p.a|
|Maintenance of Multi-tenant framework (celloSaaS)||20% of developer license|
The second part of the analysis was a build vs buy comparison for a Multi-tenant SaaS Framework. The in-house framework development and maintenance cost was compared with the licensing costs and AMC costs of a ready to use framework such as celloSaaS.
We then kept the 3 year TCO of a New Multi-tenant (MMM 4) application as the reference cost and calculated the % saving of all the other alternatives.
Migration of an existing .NET application was also considered. Assuming a code re-usability of 50%, we calculated the relative merits of hosting the existing application on Apprenda’s SaaSGrid PaaS viz-a-viz migrating it to a Multi-tenant maturity model 4 at the application level. (with and without celloSaaS)
|Development Cost US$||Deployment Cost / Year US$||Maintenance Cost / Year US$||3 Year Cost US$||% Saving|
|On Premise Application hosted on Customer’s own hardware||320,000||64,000||512,000||37%|
|New SaaS Application – Multi-tenancy Maturity Model 2||320,000||127,020||64,000||893,060||-10%|
|New SaaS Application – Multi-tenancy Maturity Model 4||500,000||4,205||100,000||812,614||0%|
|New SaaS Application (Using celloSaaS Framework MMM 4)||340,000||8,205||68,000||568,614||30%|
|Migrate existing app to Multi-tenant Maturity Model 4||340,000||4,205||100,000||652,614||20%|
|Migrate existing app (Using celloSaaS Framework MMM 4)||180,000||8,205||68,000||408,614||50%|
|New SaaS App deployed on SaaSGrid Server||320,000||94,205||64,000||794,614||2%|
|Deploy Existing app on SaaSGrid Server||0||94,205||64,000||474,614||42%|
You can download this excel sheet from our website (Download section), plug and play with your own nos. and calculate the relative merits of each alternative.