In today’s fast-paced and evolving product development landscape, traditional Product Lifecycle Management (PLM) systems like Agile PLM can come with a hefty price tag—not just in terms of initial implementation but also in ongoing maintenance, hardware, software, and operational efficiency. For businesses still considering transitioning to cloud-based PLM solutions, it’s essential to understand the cumulative costs of on-premise legacy systems and how SaaS alternatives may offer a more scalable, cost-effective solution.
While some of these costs have already been incurred—such as software licenses for components like Oracle WebLogic—it’s important not to let past expenses dictate future decisions. This common psychological trap, known as the sunk cost fallacy, often leads organizations to continue investing in outdated systems simply because of prior commitments. Instead, evaluating current and future costs provides a clearer picture of how much Agile PLM truly impacts the bottom line.
1. Initial and Ongoing Hardware Costs
- Servers and Storage: Agile PLM requires extensive server infrastructure, including production, development, and testing environments. Initial setup can cost upwards of $50,000 for physical servers alone, with additional expenses of around $10,000 annually for virtual environments to support development and testing. Beyond initial investments, hardware must be maintained and periodically upgraded, costing about $36,000 each year for ongoing support and potential replacements.
- Networking Equipment and File Servers: Networking equipment and replication file servers to support distributed teams can add another $31,000, including roughly $6,000 for file servers globally and $25,000 for essential networking equipment.
SaaS Advantage: With Propel, the infrastructure costs are entirely managed by the provider. There’s no need for dedicated physical or virtual servers, translating to zero depreciation and maintenance costs, which frees resources for more strategic initiatives.
2. Software Licensing and Maintenance
- Operating System and Database Licensing: Agile PLM’s reliance on Microsoft Server and Oracle databases can add up to $50,000 in OS licensing fees, while database licenses and Agile-specific software maintenance add approximately $30,000 annually. This creates a recurring expense that scales with the number of users and business needs.
- Java and WebLogic: Oracle WebLogic licenses are required for Agile PLM to function effectively, costing $50,000 for standard licensing. Meanwhile, optional Java high-availability features come at an additional $10,000, adding costs for performance upgrades.
While your organization may have already incurred these licensing fees, consider whether staying with Agile PLM is truly the most advantageous path forward. Holding onto this system solely because of past investments can create greater costs in the long run. Each year’s additional licensing and maintenance fees contribute to a cycle of costs that SaaS solutions like Propel can help avoid.
SaaS Advantage: Propel’s pricing is transparent and simplified, bundling most core functionalities within a standard package. This streamlined approach prevents surprise expenses, reduces dependency on external software licensing, and provides immediate savings by eliminating the need for continual software purchases.
3. Customizations and Integration
- Customization: Agile custom process extensions, aka programmatic “PX”, are commonly needed to solve unique customer capabilities. Often this is due to a lack of functionality, but also customizations to meet evolving business needs. These PXs require expensive IT developer resources with deep Agile expertise. On top of that, it is costly to maintain PXs through the many patches, hotfixes, and upgrades, which is a losing battle as they often break and have to be re-written. It is typical for smaller companies to create 4 new PXs per year at a cost exceeding $10,000 to develop. Bigger companies can have in excess of over 100 PXs and growing. This increases the customization baggage and carries perpetual maintenance costs.
- ERP Integrations and Support: For Agile PLM owners, ERP integration alone can cost $50,000 upfront to deploy, coupled with a recurring annual fee of $10,000 for maintenance and support. Additionally, Agile requires specialized developers or consultants to keep up with the support, patches, customizations, and maintenance, costing around $50,000. While some elements can be delegated to offshore teams at lower rates but still contribute to significant added time and expenses.
SaaS Advantage: Propel’s friendly UI allows for clicks, not code to meet the business needs. In addition, Propel has a modern open API, allowing for seamless integration with ERP systems and other business applications. These eliminate the need for specialized IT resources and reduce total integration costs. Propel also makes customization simpler, meaning you avoid the repetitive costs of maintaining bespoke configurations within Agile PLM.
4. Personnel Requirements
- System Administrators and Agile Experts: Companies using Agile PLM typically need dedicated Agile administrators commanding salaries averaging $100,000 due to the niche expertise required. System administrators specializing in Agile can charge from $120 to $240 per hour, a rate driven by the greater scarcity of Agile skills in the market.
- Dependence on IT for Basic Configuration: Agile’s reliance on IT for configuration changes and system adjustments often means delays of weeks for necessary updates, creating additional hidden costs and extending project timelines.
SaaS Advantage: Propel’s cloud-based model reduces personnel needs by handling updates and security patches within the SaaS ecosystem. Propel’s user-friendly configuration tools also empower non-technical staff to manage adjustments independently, cutting down on reliance on IT and the associated high costs.
5. Productivity Loss Due to Downtime and System Inflexibility
- Scheduled Downtime for Upgrades and Patches: Agile requires regular downtime for updates, with planned outages typically spanning entire weekends. In addition to IT costs, downtime can cost $1000s for each 10-hour blackout period in lost productivity and delayed project timelines.
- Security Patches and Vulnerability Management: Constant security patching is required to keep Agile systems secure, costing time and resources, especially if patches are delayed or require extended testing.
Again, it’s crucial not to let past investments in Agile hardware or setup infrastructure deter you from moving forward. Downtime costs, vulnerability risks, and time lost to maintenance compound over time, resulting in a far greater financial impact than the upfront costs already paid.
SaaS Advantage: Propel’s SaaS model offers continuous, non-disruptive updates that allow businesses to avoid productivity losses. Users experience minimal to no downtime during system updates, and security patches are applied automatically, protecting data and maintaining business continuity.
6. Security Risks and Compliance Challenges
- Security Patches: Agile’s security model relies on user-applied patches to address vulnerabilities, making it vulnerable to security lapses if patches are delayed. Security lapses can lead to high costs, including loss of sensitive data and potential legal ramifications.
- Compliance Management: Regulatory compliance can be an additional burden for Agile users, requiring dedicated resources to ensure data privacy and adherence to industry regulations.
SaaS Advantage: Propel’s platform includes built-in compliance and security management, ensuring that companies remain protected without needing dedicated compliance staff. Regular, automated security updates are implemented by Propel, lowering the risk of breaches and protecting business data.
7. Missed Innovation Opportunities
- End-of-Life (EOL) Concerns and Lack of Innovation: Agile PLM is approaching EOL, which creates the need for future re-deployment and adds further expense as companies may eventually be forced to upgrade or migrate. This impending EOL combined with Agile’s limited new feature development leaves companies without access to new technologies such as AI, real-time analytics, and automation.
- Opportunity Costs: Lack of innovation can result in missed business opportunities. Without access to modern features, companies face higher opportunity costs as processes become less efficient over time and fall behind industry standards.
SaaS Advantage: Propel offers 3 new releases every year, rich with functionality additions, as well as continual advancements in analytics, automation, and AI-driven insights. This pace of innovation ensures that Propel users stay at the forefront of technology, driving business growth and enabling them to adapt to market changes rapidly.
Conclusion
The costs you’ve already paid shouldn’t anchor you to a solution that no longer fits your needs. Propel’s SaaS PLM offers a path to greater flexibility, agility, and savings—benefits that easily offset any hesitation about leaving past investments behind. Choosing a system based on its present and future value, rather than on past expenses, is a forward-thinking approach that can better support your business goals and growth.
