Pelz-Sharpe Alan Pelz-Sharpe

The high cost of Microsoft SharePoint

10-Jan-2011

Tags: Document Management (ECM), SharePoint Ecosystem, Selecting Technology, SharePoint 2010

Microsoft estimates that you the customer will spend a total of $6.2 Billion on services related to SharePoint in 2011 (see their partner pitch).  According to my rough estimate, you can add $1.7 Billion in 2011 SharePoint license revenue on top. This for a product that many sales folk continue to tout as low cost, and sometimes even as free.

That's a huge amount of money by anyone's lights, and so it's no wonder SharePoint has been subject to so much hype.  To get a feel for just how much money we're talking about here, I assembled the chart  below. According to Goldman Sachs data more than 50 countries have a GDP (Gross Domestic Product) less than what the world spends on SharePoint.



In fact the truth is that SharePoint is not a cheap option, no more so than any other document management or ECM system.  Some products sting you with high upfront fees, others with extortionate maintenance costs, and others with high consultancy expenses.

Our research subscribers sometimes ask us to perform cost analyses against a prospective technology spend.  We find that first year costs for one product over another can be dramatically different, but over a five-year period, any three or four suppliers will often come in at around the same total cost. What surprises both us and our customers is that SharePoint can sometimes present the most expensive shortlisted ECM option after a full cost analysis is undertaken.

SharePoint is not the only game in town, nor will it be the last game in town.  It is, though, a hell of a big game right now.

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