How Much Does a SharePoint License Cost?

A mystery question to many and a hard one to answer, "How much does SharePoint cost?"

Trust me you're asking a very good question. The short answer is that it varies. It's must like asking how much does a car cost? There are just too many flavors and 'ways' to get SharePoint but hopefully I will be able to shed some good insight into it and give you guidance as well help you make a good decision when getting the 'right SharePoint for you'.

SharePoint Background in understanding its cost.

SharePoint was first release in 2001 and its evolution since has been profound, to put it lightly. Much has changed and the cloud has now taken a big part in it as well. 2001 was a single server free product, then came 2003 and 2007 which were 'farm' productions. Farm refers to a bunch of servers working together to serve a function such as delivering a SharePoint service. The larger the farm (the number of servers) the higher the cost. Then comes the question how many servers do you need in a farm? Then came the hosted farms that are managed by 3rd party hosting vendors. And more recently even came SharePoint Online and Office 365 with per user monthly licensing. To add to the confusion of options, even in O365 the prices are different.

Let's now break the Craziness down.. Here are your options.

Option 1: In-house / On-premises SharePoint

In-house and on-premises meant he same thing. This means that you have a data center somewhere in your office building, or a managed data center, or even under your desk if you wish (not recommended) where you buy a server(s) , install and configure SharePoint on it and you're good to go. The costs here are as follows.

Note: CAL = Client Access License = A user is a client, so effectively each user represents 1 CAL.

  • SharePoint Foundation License Free
  • SharePoint Server License About $5K per server / virtual machine
  • Enterprise CAL Licenses About $90 One Time per license
  • Standard CAL License About $180 per license

This is your menu to choose from. From this menu you can derive the actual cost.

If you choose SharePoint Foundation then you're done. You pay $0 for the server license and $0 for an infinite number of users.

If you Choose SharePoint Server then you have to ask how many servers do you need in your farm. One server is the least you can choose, but if you want to scale better and get better performance (maybe for production environments) then you'll need more than one.

If you need 4 servers then the total will be:

4 * $5,000 = $20,000.00

Atop of this cost is the cost of the user licenses. If you have 100 Enterprise users (meaning 100 users accessing the SharePoint Enterprise Edition), then the total for those CALs is:

100 * $180 = 18,000.00

Your Total is:

  • SharePoint Farm: $20,000.00
  • 100 Enterprise Users: $18,000.00
  • Total: $38,000.00

Of course those are just SharePoint licensing fees and don't account for operational costs, hardware costs, setup costs, disaster recovery costs etc..

Any future upgrades to the newer versions of SharePoint will require new CALs and server licenses all over again.

Option 2: SharePoint Online / Office 365

This option is Microsoft's offering of SharePoint and is a shared environment. The prices here are per user. No SharePoint Foundation Edition is offered here.

The pricing is straight forward

  • SharePoint Online Plan 1: $5/user/month
  • SharePoint Online Plan 2: $8/user/month

Option 3: Hosted & Managed SharePoint

This option is a great option that can give you the benefit of a hassle-free, turnkey environment like the SharePoint Online version and the full control and dedicated security provided by the on-premises option. The cost here varies per vendor. We offer hosting at PortalFront and the cost structure may look like this:

Hidden Costs

SharePoint licenses may have a predictable cost. Sometimes that is not enough in making a smart IT / CIO level decision as you need to see all associated costs for a project. SharePoint is a powerful tool that has evolved into a distributed, multi-server, multi-services ecosystem. That means it needs robust management and diligent care. Here are some additional costs to consider to smoothly run SharePoint.

  • IT SharePoint Administrator
  • Hardware
  • Disaster Recovery / Offsite Backup
  • 3rd party Add-ons
  • SQL Licenses
  • Management Tools
  • Training
  • Development

So What Should you Choose?

It depends. Although we offer hosting here at PortalFront along with Office 365 Plans cheaper than you can find direct with Microsoft, we will try give you the gist of your decision making process.

First, if cost is a big factor, you most likely will have to go with a Shared Hosting Option (either vendor-hosted or SharePoint online). Shared will give you leverage from other user's on the system as you all collectively pay the cost of operations and licensing.

Choose Foundation if you have an extremely simple use case for SharePoint. SharePoint Foundation provides basic document collaboration with the ability to create sites. Scaling of the sites becomes harder if you have many. Many non-profits choose this as it is a good way to save on cost.

If you have a critical operation in SharePoint, we advise you go with dedicated servers that are managed by a vendor. This will cover operation costs, hardware, backup , licenses, helpdesk and free guidance and advisory services around how to best implement your SharePoint site.

Also if you have custom 'farm solutions' that need to be deployed, you will need to go with dedicated servers (on-premises servers). If you have a full staff of IT and rock star SharePoint experts with full backup and recovery and geo-redundancy at your data center, you may be able to host it yourself.

Get a SharePoint Expert to Help

Because things can be confusing and complicated with SharePoint. PortalFront offers a free consultation to help you make best decision and are completely unbiased. Simply go here and fill out the form and we will reach out to you and discuss best options for you.

Conclusion

SharePoint can be very affordable or pricey. Consider your options and the trade offs and research other areas as well. Check with licensing vendors for pricing as they may be different depending your agreements with Microsoft. If you have an Enterprise Agreement, it may provide you with a different price. Consult and talk with your vendors to find the best value and of course, shop around.