ROI Calculator : Multi-tenant Maturity Model 2 & 4,
with and without celloSaaS
blog.techcello.com/2011/08/roi-calculator/ 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$ (D) Migration Reusablity of existing code (% of people months saved from (A) 50% (E) Maintenance 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 Apprendas 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 Customers 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.