Cost of social software

One of the strongest arguments around adopting social software is that you can do so easily and at very low cost when compared with ‘traditional’ IT solutions.  Given today’s economic volatility and frozen IT budgets it may make sense to pause the $500,000 intranet roll-out based on Sharepoint that is already behind schedule, and see if investing in lower cost, simpler, more social solutions could achieve the same (or better) results at a fraction of the cost.

And it looks like things are going to get better.  Forrester is predicting a price drop of as much as 50% in the cost of enterprise social software platforms.  This should reduce the barrier to entry even more allowing organisations to invest in lower cost projects with higher value returns, which is just what the business will be asking for from IT in the months ahead.

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2 Responses to Cost of social software

  1. Dan Smith says:

    The cost of social software seems to vary quite a bit. One pricing model for a hosted enterprise system that I heard from a reputable collaboration system supplier was “roughly the cost of one full-time professional or $100K.”
    Other systems (not SharePoint) seem to be in that range as well.
    Looked upon on the basis of cost per employee or cost per customer/member, $500K might not be much. However it seems that $100K for the system and hosting and $100K for the professional corporate comm person is a realistic target. And yes, it very likely will be better than SharePoint.
    These days “Nobody ever gets fired for buying IBM” has too often been replaced by “Nobody ever gets fired for buying Microsoft.” Since IBM is no slouch in social software they might look at IBM but I have no idea what IBM’s pricing model is.

  2. Jon Mell says:

    Hi Dan – I think IBM Connections is ~$110 / user for a one-off license (no charge for the server). Part of the problem with Sharepoint is that the licensing can be horrifically complex (server, database, client access) and the man-hours involved in customising the thing to get it to be ‘social’.

    I’ve written some stuff on ROI (http://jonmell.co.uk/category/roi/) and Rob Gray (who works for BlueKiwi, a social software vendor) has as well.

    The key cost saving for a ‘social’ solution is not only in the license cost but the speed of deployment.

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