Total Cost of Ownership of a Headless CMS: Understanding and Optimizing Your Investment
Amanda Lee loves writing, photography, and coffee.
Implementing a headless CMS can enable your brand to deliver content to multiple channels, give developers the freedom to choose their favorite frameworks and technologies, and give customers personalized experiences that keep them engaged.
However, like with any software application, you should know what it will cost before implementing a headless CMS to ensure you get an attractive return on investment. As enterprises look for ways to cut rather than increase costs and move away from technologies that hurt rather than help the bottom line, knowing the total cost of ownership (TCO) of your headless CMS can help you select the best option for your budget and business.
What Is Total Cost of Ownership (TCO)?
The total cost of ownership is the cost to purchase and operate a software system over its lifespan. It includes the cost of acquiring the software, as well as the ongoing costs associated with deploying, using, maintaining and overall operations before it is eventually retired.
Calculating the total cost of ownership can be seen as a challenging process because it requires an in-depth assessment of not only the platform in question but also the business that will be using it, as this will influence operating costs such as human resources, but also other factors such as the number of seats included in the CMS license.
In simple terms, TCO = Initial Costs + Ongoing Expenses
Initial costs include any software license or support subscription, implementation and setup costs, custom development requirements, and associated infrastructure (cloud or dedicated). Ongoing expenses would consist of the cost to host the platform (if not SaaS), annual support subscription and/or maintenance costs, and cost of upgrades, security patches, and other operating costs that will vary depending on if and how much the company grows.
Calculating Total Cost of Ownership
To calculate TCO, you must combine the initial costs and ongoing expenses and divide the total by the expected lifespan.
Let’s calculate the TCO for an enterprise CMS over an 8-year horizon. Assuming the initial setup costs are $550,000 and annual expenses of $130,000 for the first 3 years. From Year 4 onward, there is an estimated 10% increase in ongoing expenses due to various factors. So, from years 4-8, annual expenses cost $160,000.
So the total associated costs would be:
- Initial Setup: $550,000
- Ongoing Expenses: Years 1-3 = $130,000*3 = $390,000
- Years 4-8 = $160,000*5 = $800,000
- Total Costs = $1,740,000
Over the 8-year lifespan, the company could expect the CMS to cost them an average of $1,740,000/8 = $217,500 annually.
Ongoing Expenses (Years 1-3)
Ongoing Expenses (Years 4-8)
Annual TCO Estimate
Why Does It Matter?
The reality is that for most software systems, but particularly a CMS, the initial costs are only a fraction of the overall cost that a company can expect to pay for using it. When assessing content management systems, it’s therefore imperative that the value it brings to the business regarding revenue be considered.
The Legacy and Monolithic System TCO Problem
Brands currently using a legacy or monolithic system may wonder why they need to consider their total cost of ownership. Marketers can make changes to the website as required, developers can launch new experiences using the tools they currently have, and there is a readily available implementation agency to support them with regular upgrades and maintenance checks.
Upon closer inspection, the reality is that these systems could cost a high price that no longer benefits the business when better alternatives are available.
Many legacy CMSs and monolithic DXPs include expensive licenses. This might not be a concern for businesses getting the most value from these tools, but many are paying for additional features they aren’t using to their advantage. For example, if the DXP has a built-in analytics tool, but the business continues to use another best-of-breed solution instead.
High Implementation Costs
Companies planning to switch their CMS but considering another legacy system should consider the high implementation costs of working with many of these vendors. Many of these legacy and monolithic systems are expensive before factoring in the ongoing costs of using a CMS.
Ongoing Security, Maintenance and Support Costs
At some point, every CMS will require upgrades that include security patches, maintenance to fix bugs, and other variable costs. For monolithic systems, these maintenance costs can be just as expensive to handle as the implementation costs, and the older the system, the more these fixes will need to occur.
How a Headless CMS Can Lower TCO
Instead of relying on a legacy CMS or monolithic DXP, migrating to a headless CMS (or composable DXP built around a headless CMS) can be a catalyst to help lower the total cost of ownership of your content management capability. Here are a few ways TCO is lowered:
Technology and Framework Freedom
A headless CMS is technology and framework-agnostic. Developers can select the tools and technologies that work best for them instead of being restricted by predetermined languages and frameworks.
Software teams can work faster using familiar languages, and companies can hire developers with experience in modern languages, thus reducing the learning curve and associated training costs. They can also adapt to new technologies as they arise.
Build Best of Breed Stack
Adopting a headless CMS removes the vendor lock-in that can plague companies using monolithic systems. Instead, with a headless CMS, they can build their best-of-breed stack that includes the most cost effective solutions for their business.
Unlike legacy systems, which might have required a business to deploy the platform on-premises, a headless CMS can provide the option of a cloud-native architecture so that the CMS can be deployed in the cloud. This allows companies to take advantage of the benefits of the cloud, including reduced hosting costs and upgrades handled by the vendor.
Headless architecture future-proofs businesses against changes in the business landscape and customer demands. Instead of having to rip and replace the entire tech stack because customers are no longer visiting websites but instead strapped into a VR environment, they can also publish content to that channel.
With a headless CMS, companies can more easily scale to adjust to changes in traffic, an increase in transactions from an eCommerce website, and other unexpected swings in the number of users coming to the site.
Factors That Impact Headless CMS TCO
A headless CMS should offer a better TCO than a monolithic or legacy CMS. Still, there are other factors to consider that will differ for each headless vendor when making the assessment.
Enterprises might find themselves forced into an artificial pricing tier that either offers too many features they don't need or limits access to essential functionality. This can lead to inefficient resource allocation and higher costs. Additionally, as businesses grow and their requirements change, they may need to frequently upgrade to more expensive tiers, resulting in unpredictable expenses. Lastly, tiered pricing models can make it challenging for users to gauge the true value of the software, as the features included in each tier can vary greatly, making it hard to compare alternatives effectively.
User limits can stifle scalability for enterprises with fluctuating or rapid growth. If a company hits its user limit, it might face disruptions in content management and collaboration, potentially hindering productivity. Furthermore, the costs associated with upgrading to accommodate more users can become burdensome. User restrictions can also lead to issues in cross-functional teams, limiting the number of contributors, collaborators, reviewers, approvers and publishers, which can impede creativity and throughput. Ultimately, these limits may force enterprises to make difficult choices about who can access the system, potentially hindering the benefits of a flexible headless CMS.
Another factor impacting the total cost of ownership of a headless CMS is the content-related costs, such as the number of content types or the number of content items. Some vendors only allow a limited number of content types or entries per project (number of sites or pages), which can add up for larger websites with thousands of pages.
A key component of a headless CMS is that it provides APIs to deliver content to different channels or request content from other systems. These actions require API calls to complete, and will come at a variable rate depending on site traffic and user engagement. However, vendors often limit both the number of API calls and the API call rates that can be made per month or rate limits. Overages are then charged for surpassing those limits, which can be surprising, and variable costs occur every month.
Hosting and Deployment Constraints
Hosting and deployment options also play a crucial role in calculating the total cost of ownership. Many CMS vendors only offer public SaaS solutions that can take advantage of the cloud; however, users in specialized industries such as financial services or healthcare may require private SaaS, on-premises or hybrid options.
What to Look For In a Headless CMS With a Low TCO
Headless CMSs that offer a lower total cost of ownership are likely to have most or all of the following characteristics.
Scalability and Flexibility
One of the primary reasons organizations opt for a headless CMS is scalability. Ensure the CMS you choose can grow with your needs. Look for a solution that allows you to add content, users, and integrations without incurring significant additional costs. A scalable CMS can save you money in the long run by avoiding frequent system overhauls.
Ease of Integration
Integration capabilities can significantly impact the TCO of a headless CMS. It should seamlessly integrate with your existing tech stack, reducing the need for custom development and maintenance. Check for pre-built connectors, APIs, and webhooks that simplify the process of connecting your CMS to other tools and platforms.
Efficient content collaboration can lead to cost savings by streamlining workflows. Evaluate the CMS's collaboration features, including role-based access control, version control, and real-time editing. A CMS that fosters teamwork and content reuse can reduce redundant efforts and associated costs.
A crucial aspect of TCO is the ability to reuse content across different channels and platforms. Look for a CMS that supports content modeling and allows you to structure your content for maximum reusability. This not only enhances efficiency but also reduces content creation costs.
Hosting and Maintenance
Consider the hosting options offered by the headless CMS provider. Cloud-based solutions can be cost-effective, as they eliminate the need for on-premises hardware and maintenance. Additionally, check if the CMS provider handles updates, security patches, and backups, as this can reduce the burden on your IT team.
Examine the CMS's pricing model closely. Some CMS providers offer transparent pricing based on usage, while others have tiered pricing or complex licensing structures. Choose a model that aligns with your budget and growth expectations. Avoid surprises by understanding how pricing may change as your needs evolve.
Support and Documentation
Access to comprehensive documentation and reliable customer support is crucial for minimizing TCO. A CMS with extensive resources and a responsive support team can help you resolve issues quickly, reducing downtime and associated costs. For example, see CrafterCMS's online documentation.
Security and Compliance
Security breaches or compliance violations can be expensive to rectify. Ensure the headless CMS prioritizes security and compliance with industry standards. Look for features like data encryption, access controls, and audit trails to protect your content and data.
User Training and Onboarding
Consider the ease of onboarding your team and training them to use the CMS effectively. A user-friendly interface and available training resources can reduce the time and costs associated with staff education.
Lastly, research the reputation of the CMS provider. Customer reviews and testimonials can offer insights into the quality of their product and support services. A reliable vendor with a history of delivering value to its customers can contribute to a lower TCO. For example, see CrafterCMS's reviews on G2.
How CrafterCMS Helps Lower Your Total Costs of Ownership
CrafterCMS is an enterprise-grade headless CMS that provides everything a business needs to launch and maintain engaging and dynamic content experiences. However, it does so in a more cost-effective way than other headless CMS solutions, legacy CMSs, and monolithic DXPs.
Leading enterprises need a solution that strikes the perfect balance between cost-effectiveness, functionality, and innovation. CrafterCMS stands out with its unique features, making it a game-changer for organizations aiming to optimize their TCO.
In addition to all the key capabilities that you should be looking for in a headless CMS as described above, CrafterCMS offers a host of unique features that developers, marketers, and operations personnel need to help the enterprise deliver results with higher productivity, lower TCO, and a better ROI.
- User-friendly visual content authoring, drag/drop experience building and multi-channel in-context previews
- Git-based content repository with advanced versioning, branching and simple CI/CD tool integration
- An embedded full-text search engine (OpenSearch) enabling both content authors to find and repurpose content easily, and software developers to build search-driven dynamic experiences
CrafterCMS's Marketplace provides over 60 plugins, add-ons and solution bleuprints that simplify the process of building your content management experience and your end-user sites and apps. By accessing the prebuilt plugins and integrations withing marketplace, you can tailor your CMS to your specific needs, reducing the need for costly custom development while enhancing functionality.
CrafterCMS promotes DevContentOps, a methodology that streamlines the content development and delivery process. This innovative approach encourages collaboration between development, content creation, and operations teams, ultimately increasing efficiency and reducing TCO. DevContentOps enables the rapid and continuous deployment of content updates, the release of new software features, and the delivery of engaging customer experiences without the issues usually associated with CMSs such as publishing bottlenecks and content freezes occurring.
CrafterCMS offers a flexible pricing model that allows you to pay only for the features and capabilities you require, without the artificial tiers that other vendors use to lock you into higher prices. This granular approach ensures you are not paying for unnecessary features, aligning your investment directly with your specific needs and budget.
In addition, CrafterCMS offers unlimited API calls and API call rates as part of our Pay Per Use and Pay Per Compute plans, making it easier for companies to know how much they might need to spend monthly. And its Pay Per Compute plans has no limits on the number of projects, authors, content objects, or any other constraints.
CrafterCMS is built on an open-source foundation. This not only reduces licensing costs but also provides transparency, flexibility and security. The open-source project ensures continuous improvements and a wealth of resources for users, offering long-term cost savings, adaptability to evolving needs and no vendor lock-in.
CrafterCMS offers multiple deployment options, from self-hosted/self-managed options to private SaaS, a solution that combines the benefits of a Software as a Service (SaaS) model with the control and security of a private cloud. This feature simplifies infrastructure management and ensures high availability, reducing the need for in-house IT resources and the associated costs.
Security breaches can be costly and damaging. CrafterCMS places a strong emphasis on security, providing the tools and features needed to protect your content and data. With its truly decoupled architecture (content authoring separate from content delivery), and advanced security features and development processes, CrafterCMS safeguards your digital assets, mitigating the financial risks associated with security incidents.
Website performance is a crucial factor in user satisfaction and SEO rankings. CrafterCMS's serverless and stateless high-speed content delivery architecture ensures fast loading times, reducing bounce rates and keeping users engaged. This performance can lead to increased revenue and reduced costs associated with slow-loading websites.
Harvard Business Publishing (HBP) had relied on a legacy system for quite some time. Unfortunately, they suffered from content bottlenecks, downtime, integration difficulties, and high operational costs. They needed to migrate to a new CMS to increase traffic and revenue. After implementing CrafterCMS to be the heart of their new tech stack, HBP gained an editor-friendly experience, easier integrations and scalability, higher productivity and the increase in revenue they were seeking.
Read our case study and how HBP streamlined its digital publishing with CrafterCMS.
Call for Proposals to Speak at CrafterCMS Live! 2024 is Open
Headless CMS RFP Template: The Ultimate Guide For Selecting the Right Content Platform
Java CMS: Everything You Need to Know
Enterprise Headless CMS: Essential Features and Benefits