Five Cost-Related Questions to Ask Before Choosing a Software Platform

The time has come. It’s time to make that big decision to choose a software platform that will help shape the future success of your software startup or small business. You can’t wait to get started but want to make the right decision, since you probably can’t afford the time or money to change platforms later. What if you discover that your prototype can’t go into production? Or – the nightmare scenario – what if your launch is unsuccessful? You probably won’t get a second chance.

That’s why it’s so important to get your facts straight and ask the right questions before choosing your software platform to use for development. It’s vital to consider the details of both your development and production environments, in addition to asking questions about costs and your product itself. These questions don’t require a certification in the IT field – just some key factors to think about and focus on when making that final decision.

Here is a checklist that will help you to begin evaluating which software development platform is the right fit for you and your business plans.

Cost-Related Questions

How much money do you have to develop your app?
What is your budget for releasing a minimal but viable product? And how much development time will that translate into? Don’t forget to include time and budget for testing, debugging, documentation and finally deployment.

Helpful Hint: If you pick a platform where your developers can spend their time implementing functionality instead of struggling with technology-related bugs and problems, you will have a better chance of staying within your budget.

What is the total cost of ownership for your company?
Consider how a platform affects your cost-of-acquisition, cost-of-goods-sold (COGS) and revenue-per-customer. Will the total cost of ownership be linearly growing at a predictable angle? Will your marginal cost grow slower than the marginal revenue?

You will always need to have development, testing (functionality and scalability), and support systems. Do consider as well the total cost for these, including hardware, software and skill/resources to manage. And be sure to read the small print when it comes to scaling up your internal environment and when seeking any qualified support. There might be surprises in the licensing agreement. Also consider the level of complexity, as that will impact the productivity of your entire development team.

Helpful Hint: Go for simplicity and avoid a complex system as this will present a greater cost and the risk of halted development.

What is the total cost of ownership for your customer?
Let’s get a bit more specific on your plans for your platform of choice. If you are planning to develop a cloud service, then costs for a hosting partner needs to be considered. If you have a platform that needs a lot of processing power to run, that will eventually affect your pricing and your bottom line.

If your customers are going to run your software on premise, they will need to invest in hardware and system management, which may reflect on your costs.

Consider the licensing model of the whole stack. It might be a mix of open source and purchased software. Read the small print with consideration for future plans to scale. There might be surprises in the agreement. Acknowledge that, “free to download” might very well translate into “very expensive to run in production.” “Open source” can also translate to expensive production, because you will be expected to solve problems on your own.

Helpful Hint: Look for a transparent licensing model so that you know what will happen to your cost structure when you scale. The less processing power your system needs to run in production, the better it is for you and your customer—no matter if it is a cloud service or not.

What are the hardware and software requirements for running this platform?
Consider what kind of hardware and operating system (OS) your platform requires and what additional investments might be needed. Will you be looking at a very specific solution or will there be a wide selection of hosting partners that can provide such an environment at a reasonable cost?

What client platforms will you need to integrate with initially and eventually? On the client side, should it be web-based or native (single or cross-platform)?

Is the backend cloud ready? How much does it take to install the platform on a private cloud, behind a VPN or on premise?

What are the opportunity costs?
Beware of vendor lock-in, which means you can only use their platform and it will lack compatibility and integration features as you scale or work with other applications. Some platforms like Salesforce and SAP will provide the advantages of an existing ecosystem. But also consider the limitations they present. Will you be able to make the business decisions you need to make in the future? How much limitation will your choice of platform result in?

Helpful Hint: You should always feel that you are the master of your own ecosystem and have complete control as you launch, increase business and expand.

By | 2017-03-30T12:10:32+00:00 May 10th, 2016|Starcounter|0 Comments

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