By Steve Wagner, ProEPM www.proepm.com

Many companies in the mid/small-market and are examining the costs and benefits associated with hosting their own Microsoft Project Server implementation and comparing them to the costs and benefits of outsourcing. This article provides some hard numbers to better evaluate this decision.

The Company
For the purpose of this article, we will use a ficticious company called itsoftman, Inc. This is a 150-person software development company spread across three locations and four countries. Of the 150 employees, 50 of them require Microsoft project web access accounts. There are team members in Brazil, Mexico and Russia. The project managers are spread USA and Europe.

The In-House Hosting Option
To host Project Server internally, itsoftman will need hardware, software, implementation services, backup capabilities, archiving capabilities, training and a support and maintenance team. The chart below estimates these costs over a three-year period:

Costs of In-House Project Server
Item	Unit Cost	Quantity	Total Cost
Web Server I (Cluster - Dual Core)	$4,000	1	$4,000
Web Server II (Cluster - Dual Core)	$4,000	1	$4,000
Database Server (Cluster - Dual Core)	$4,000	1	$4,000
Database Server (Cluster - Dual Core)	$4,000	1	$4,000
Process Server  (Dual Core)	$5,000	1	$5,000
Cluster Pack Software	$140	1	$140
Annual 24x7 Service Agreement, 4 hr on-site	$1,200	3	$3,600
Backup software	$3,000	1	$3,000
Backup software implementation	$1,000	1	$2,000
Staff Training for backup software	$1,000	2	$2,000
Project Server 2007 License	$6,900	1	$6,900
Project Server CAL's web access	$150	50	$7.500
Project Portfolio Server CAL	$229	10	$2.290
Project Server installation	$8,000	1	$8,000
Project Server Training for Staff	$7,000	2	$14,000
Project Server Proof of Concept, pilot, configuration	$15.000	1	$15.000
SQL server Enterprise License	$5.000	1	$5.000
Windows 2003 License	$700	1	$700
Annual 24x7 Service Agreement, 4-hr on-site	$600	3	$1,800
Sharepoint maintenance, account mgmt and support issues	$40,000	3	$120,000
Total In-House Expenses (3 yr)			$212.930

The Outsourced  Hosting Costs

itsoftman, Inc., being a company that believes in due dilligence, then came to ProEPM to evaluate outsourcing their Microsoft Project Server hosting, maintenance and support.
At ProEPM, they found several key differences between the In-House and Outsourced options:

• Support. ProEPM offered 24x7 support standard. Itsoftman’s internal evaluations only allowed for support during normal business hours.
• Security. ProEPM offered web encryption as a standard feature - allowing itsoftman to better protect projects data. Their in-house solution web account for email encryption.
• Uptime. The in-house team couldn't guarantee a specific uptime percentage. ProEPM guaranteed 99.93%.
• Consulting. ProEPM provide training and consulting on PMO, Proof of concept, Pilot.
But the biggest difference was the total cost. As shown above, if the company implemented Project Server in-house, they would spend over $213,000 - much of which would come as capital expenses during year 1.

However, the cost for ProEPM Secure Hosted Project Server for the same three years amounted to less than $36,000 - a savings of over $177.000! In addition, ProEPM service fees would be paid on a monthly basis, avoiding the capital budget altogether and becoming just a typical line item in the standard annual IT budget.

Conclusion

You can have a hosted EPM Environment up and running in minutes not months and you immediately start experiencing the benefits of Enterprise Project Management for your organization.
No hardware to buy, no software to purchase, no IT Infrastructure at all - just a web browser for each user. Its that simple using ProEPM hosting services.

While there are no absolutes about these types of decisions, generally speaking, there are real, quantifiable benefits to outsourcing your Project Server hosting. Itsoftman is a ficticious company, but these numbers came from a real-world case study conducted by a ProEPM client prior to signing up for our service. If you would like to investigate these options further, please give us a call. We will be happy to explore the issue with you and help you make the best decision for your organization.