Total Cost of Ownership, or TCO, is a crucial metric in understanding what your business will pay for a CMS - not just at the outset but into the future.
Having an accurate TCO figure will help your business to budget effectively and to better understand ROI: two vital considerations for profit-focussed, future-proofed operations.
In this article we'll outline the importance of knowing TCO figures for CMS platforms in consideration for your business, how to calculate these figures, and more. After reading you'll be able to assess TCOs for various CMS platforms and make the decision that's right for your business.
What is a CMS platform?
Just in case you need a refresher, CMS stands for Content Management System and refers to a software platform that lets users create and manage their website without the need for advanced or specialist knowledge (like coding, for example).
Some popular CMS platforms include
- HubSpot CMS: a CMS designed for marketers and business owners, with plenty of tools to drive traffic, generate leads, and grow revenue.
- WordPress: a highly customisable CMS with an open-source codebase and an extensive developer community, which powers a significant chunk of sites on the internet.
- Squarespace: a CMS designed to let you build a site in minutes, with beautiful templates and handy drag-and-drop design tools to get you up and running quickly.
- Wix: similar conceptually to Squarespace, in that templates and drag-and-drop functionality are key components of the platform.
- Magento: an open-source ecommerce platform designed to scale with your business.
- Shopify: a dedicated ecommerce platform with a strong focus on creating streamlined, high performance online stores.
- Webflow: a CMS that combines design and development to create sites with clean code, giving you precise control over the design of your site without the need for complex code.
What is Total Cost of Ownership (TCO)?
Put simply, TCO is a figure that includes all of the direct and indirect expenses related to using a CMS. TCO looks beyond initial subscription costs, taking into account costs for deployment, maintenance, upgrades, integration, security, training, and so on.
It’s important for businesses to consider TCO as well as initial costs when evaluating CMS options because it allows for a better understanding of operating costs, a lower risk of unexpected expense, and a clearer idea of resource requirements. These factors contribute to better resource allocation and overall more effective strategic decision making.
Digging a little deeper into the concept of TCO, if you head to a CMS pricing page you'll see something like this:
The HubSpot CMS pricing page
But it's rarely the case that these numbers represent the full picture. Or, arguably, anything close to it. This is because on top of the subscription costs there are a wealth of other costs to consider. For example:
- Other initial costs: things like setup costs, design and development costs, staff training costs.
- Ongoing costs: things like hosting fees, security expenses, plugins and third-party services.
- Hidden costs: things like downtime costs, costs to migrate from your current CMS, costs for integrating third-party tools.
You also need to look beyond costs, too. The capabilities of a platform combined with the ability of your business to leverage its potential will determine how much revenue you can generate, making potential ROI an important piece of the TCO puzzle.
Hopefully this demonstrates why it's important to spend time calculating the TCO before deciding between CMS platforms. Lower initial costs do not necessarily mean a cheaper package overall, and your business will benefit from a detailed understanding of costs.
In the following sections we'll explore each of the cost categories above to give you a clearer picture of potential costs
Note: because costs associated with all CMS platforms are likely to change over time, we've kept actual pricing information minimal, instead offering practical advice that you can use to effectively calculate TCO with the actual cost figures at the time of reading.
Initial costs
These costs are likely to be the most obvious, meaning a lower chance of getting stung. But it’s still a good idea to have an accurate figure for them all so that your overall understanding is more accurate.
Here are the initial costs to consider when calculating TCO.
Subscription fees
We've touched on these briefly already: subscription costs are the costs you see on a CMS pricing page, usually shown as a monthly payment. Take a look at the SquareSpace pricing page below:
There’s a monthly figure for each package, with a saving displayed for annual payment. Note that many platforms offer a pro rata discount for annual memberships and show this by default to make the price seem more appealing. See below for the rolling monthly prices:
SquareSpace pricing page with monthly payment selected
Setup and installation fees
As well as subscription fees you need to take into account costs to get the CMS up and running, to configure it to meet the needs of your business, and to integrate it into your current systems and workflows.
Each of these areas carries its own costs and resource demands, which can be significant if you don’t have access to the required expertise.
Design and development costs
It’s unlikely that the functionality and look and feel of the CMS will meet your needs out of the box, meaning that design and development spend may be required to customise the CMS appearance and functionality, to adjust the layout and interface, and to integrate it effectively with your business systems.
Training costs
Unless your staff are already familiar with a CMS you'll likely need some formal training to bring everyone up to the level of technical expertise required to use the new platform. You may also need to pay for training to acquire the needed technical expertise to get things up and running in the first place.
Ongoing costs
Websites are complex and have lots of moving parts, and it’s often the case that failing to pay for one of those parts can bring down the whole thing. It’s therefore vital to know the recurring spend required to maintain and operate your CMS.
Here are some ongoing costs to consider when calculating TCO.
Hosting fees
All websites need hosting, and while some CMS platforms provide hosting as part of your subscription (either optional or compulsory), others require you to arrange this yourself.
If you have the option (or requirement) to arrange your own hosting, be aware that hosting costs can vary massively depending on the needs of your business. For a small mom and pop store, for example, you can most likely get away with a basic package like one of the below from GoDaddy:
A large-scale B2B website with high traffic volume though will likely need an enterprise solution, and these are far more expensive.
Maintenance and updates
With technology constantly developing, websites and the CMS that power them should be serviced regularly to ensure they operate smoothly. Such servicing highlights potential bug fixes, security improvements, and other technical refinements to keep your site running at optimum condition.
Most CMS providers will update their CMS automatically (some, like WordPress, let you turn off automatic updates), giving you access to the latest features, security patches, and performance enhancements. But sometimes there will be costs attached: for example, bringing custom functionality in line with a software update, or carrying out additional maintenance outside the CMS update cycle.
Security measures
It’s an unfortunate truth that hackers and other bad actors are constantly developing new techniques and strategies for carrying out cyber attacks. And while the majority of CMS platforms have extensive security measures in place to protect their platforms and customers, there is still a risk of the unthinkable happening.
Businesses need to factor in the costs of security measures required to keep your site and its users safe. This includes cybersecurity protocols, data protection software, regular audits, any training needed to keep your staff abreast of the latest data security legislation, and so on.
Additional plugins or extensions
It’s unusual for a CMS to be a closed system, or for the default functionality to align perfectly with the needs of your business. Expanding the functionality of a CMS is achieved with third-party plugins, extensions, or apps, and the majority of these come with costs attached.
Example WordPress plugins
In the image below, one plugin is free, and the other three are Freemium: meaning they can be used for free but with severely limited functionality. Understanding the additional software required to achieve desired functionality is one part of the puzzle; building a clear understanding of the ongoing costs of each is more complex, but just as important.
For businesses looking to minimise the complexity of their TCO, CMS platforms like HubSpot which boast very high levels of out of the box functionality may be more popular than those where many functionalities require third-party software.
Hidden costs
These are the less obvious expenses that are more likely to catch decision makers off guard. While it may seem over-cautions factoring these into initial calculations, it’s preferable to being surprised by an expensive bill that threatens the smooth running of your business.
Here are some hidden costs to consider when calculating TCO.
Downtime costs: technical
Technical downtime costs arise when your website and its underlying systems fail unexpectedly, or when they are interrupted by maintenance. Such disruptions lead to lost productivity, lost revenue, damaged customer relationships and more. As well as these costs you must consider the expense involved in diagnostics, troubleshooting, repair, and protecting against future disruption.
Ideally if you’ve invested in the maintenance and security measures outlined in the previous section the likelihood of incurring this expense will be minimal.
Downtime costs: security
Falling victim to a cyber attack or other security breach can have similar negative impacts to those caused by technical downtime, i.e. lost productivity, lost revenue, and damaged customer relationships. You may also incur financial penalties if the breach resulted in non-compliance with technical legislation.
There are costs associated with forensic analysis, system repair, strengthening of security measures to protect against future breaches, and more.
It’s worth choosing a CMS whose security measures you have full faith in, and in allocating resource to ensure your site security is up to the highest standard.
Migration costs
If you're switching from one CMS platform to another, it’s highly likely that the transition will present significant expense. Moving data, setting up hardware and software, and other considerations like converting files, error checking and similar are all required to get the new system up and running.
This will only be relevant if you are migrating from an old system to a new one. Some CMS providers offer migration tools, and third-party CMS migration services are available, too.
ROI considerations
Seeing all the initial, ongoing and hidden costs laid out presents a daunting picture, but bear in mind that a clear and accurate TCO will stand your business in better stead for its onward operations.
Also bear in mind that taking time to choose the right CMS will position your business to generate revenue and see a positive return on your investment, even if this investment was higher than initially expected. A well-implemented CMS can enhance your digital marketing presence, and gives you the tools to create content, manage campaigns, nurture leads, and drive sales.
Here are some things to consider when thinking about potential ROI for a CMS:
- Increased efficiency: while training costs may be needed to bring your staff up to the required level of technical expertise, the increased efficiency made possible by a dedicated B2B CMS is likely to offset these costs very soon into its life.
- More streamlined operations: similarly, tighter integration with your current systems made possible by a well-chosen CMS will reduce the time associated with manually moving data between systems.
- A smoother front-end experience: visitors and customers can feel the difference between a site running on a powerful, specialised CMS and one cobbled together with inappropriate software. The resulting improvements in user experience will lead to improved customer trust, better brand reputation, and increased sales.
- Clearer budgeting: while initial TCO numbers can be daunting, keep in mind that the overall spend may be lower than the mish-mash of untracked and unmanaged costs associated with your current setup.
How to calculate TCO
To calculate TCO you need to carry out the following steps:
- Identify initial costs, including those outlined above and any others relevant to your business
- Estimate ongoing costs, including those outlined above and any others relevant to your business
- Estimate hidden costs, paying special attention to migration costs if moving from a different CMS
- Add the amounts together, ensuring they are all prorated to the same period (i.e. monthly or yearly)
For each step take care that you are using up to date figures. Bear in mind that costs for CMS and associated software and services are likely to change frequently, and factor this into your calculations.
If you’re carrying out a TCO for a prospective CMS, some platforms offer TCO calculators to help prospective customers understand what costs are involved. From our list of CMS earlier in this article, only HubSpot and Shopify currently offer such calculators:
HubSpot CMS cost breakdown
If you’re considering using HubSpot CMS for your business, here is an indicative breakdown of costs.
HubSpot cost breakdown
HubSpot offers modular software to meet the varying and complex needs of any business. Their products include:
- HubSpot CMS: their flagship content management system
- The Marketing Hub: to generate leads and automate marketing
- The Sales Hub: to engage more leads and close more deals
- The Service Hub: to deliver exceptional customer experience
- The Content Hub: to create and manage high quality content
- The Operations Hub: to connect your apps, manage data, and keep things moving smoothly
While you can use the CMS alone to create, modify and manage websites, many businesses will most likely want to use it in conjunction with one or more of these Hubs: each of which carries its own pricing.
There are also other solutions on offer, to further expand the functionality and utility of the platform:
- The Customer Platform: a bundle of marketing, sales, customer service, content and operations software
- Marketing+: a special bundle that combines content marketing tools with lead generation and marketing automation tools
And finally, HubSpot offers the option to create a bundle based on your specific needs.
Whichever combination of software you go for, each is available in three tiers: Starter, Professional, and Enterprise. The tiers are progressively expensive and offer progressively more advanced features and higher usage limits. There is comprehensive information on the HubSpot website about which tier would fit best with your business, and their support agents are on standby to point you in the right direction, too.
Other costs to consider with HubSpot:
- Onboarding fee: some Hubs require a one-time onboarding fee which covers setup, training, and optimisation.
- Template purchase or design: free templates are available, but many businesses opt for custom templates to fit better with their brand aesthetic and desired functionality.
- Developer fees: if you decide to outsource template creation to an external developer, this will incur fees.
- Staff training: beyond the training offered as part of the HubSpot onboarding you may wish to deliver further training for your staff.
- Integration costs: integrating HubSpot with your existing systems, and integrating any required third-party apps with your HubSpot installation will generate further costs.
- Migration costs: HubSpot migration is a complex process best carried out by an experienced professional.
- Maintenance costs: core updates are handled by HubSpot, but updating custom functionality and features may require paid development.
- Operational costs: domain registration, IP address management, and other aspects of keeping a site up and running may need management outside of the HubSpot platform
Potential savings compared to other CMS
HubSpot offers a far more integrated ecosystem than many CMS platforms, often translating to significant savings for businesses looking to leverage complex functionality. As an all-in-one solution, HubSpot lets your business manage its website, marketing, sales, customer service and more from one place, removing the need to pay for and manage multiple software packages.
This extends to functionality within each of HubSpot’s packages, too. Inside the HubSpot CMS you are less likely to require third-party apps to achieve complex functionality than you would be with other CMS, WordPress for example, which offer only more basic functionality out of the box.
There are some other savings to bear in mind, too:
- No hosting fees: HubSpot CMS includes secure, reliable hosting
- Scalable costs: HubSpot pride themselves on offering a pricing model that scales with your business, meaning you won’t pay over the odds
Getting started with the HubSpot CMS
While HubSpot may seem pricey at first glance, the platform offers B2B marketing software that’s hard to beat. And while carrying out an in-depth TCO may not be the most appealing prospect, giving your business the information it needs to make the right strategic decision is more than worth it in the long run. We hope this guide has been useful in explaining the value of TCO, and in helping your business to calculate potential costs for HubSpot and other CMS platforms.
As HubSpot Diamond Partners, Digital Media Stream is uniquely positioned to help your business make the move to HubSpot. We are a certified seller, delivering onboarding, integration, and migration to the platform, and we’ve helped a portfolio of customers to leverage the platform for more traffic, more sales, and better ROI. The results speak for themselves.
