The hidden costs of on-premise software

Cloud or on-premise? When choosing from among hotel software vendors, hoteliers are frequently confronted with a choice between traditional on-premise or locally installed software and cloud-based software which exists in the internet. When comparing prices of these two types of systems, the comparison seems at first glance quite simple. The cost of on-premise software consists of an up-front license fee plus annual maintenance fees whereas cloud software vendors generally charge a monthly fee. What hoteliers tend to overlook are the hidden costs associated with on-premise software – both at the time of installation and later during normal operation of the software.

In order to objectively compare the financial implications of both types of systems, we have compiled a list of the hidden costs.

Hidden costs of on-premise software prior to going live

  • Cost of server hardware, server operating systems, database software and back-up hardware and software
  • Cost of an air-conditioned server room along with increased energy costs
  • Cost of on-site implementation of the hotel software along with travel costs
  • Cost of on-site training along with travel costs


Hidden costs of during the operation of on-premise software

  • Staff costs for the administration of the system, including timely patching of the operating system and virus scanner as well as system backups
  • Server maintenance costs
  • Costly updates of the hotel software after regular intervals along with hardware upgrades, system downtime, additional training and associated travel costs
  • Annoyed guests and staff due to system downtime
  • Incalculable costs of loss of data due to virus attacks, security leaks and hardware failures

Why does cloud-based software have none of these hidden costs?

With cloud software, all you need is an internet-ready device, user name and password. The cloud software vendor takes care of everything else. Cloud-based software is already installed and running in the internet. The monthly fees should be all-inclusive – without any hidden costs.

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1 comment
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