Pricing & Commercial Models
CMS Buyer's Guide - Consideration #4
Understanding Pricing and Commercial Models
A vendor-supported commercial model refers to when a software is developed, maintained, and supported by a commercial entity, for a licensing fee, in which the source code is usually not accessible or modifiable.
An open-source model refers to when software is developed through a collaborative effort, in which individuals can contribute to the final product, is self-maintained, and the software is freely available.
Making the commercial model choice
When a vendor-supported model is the right choice:
You want complete support of the backend systems, scaling and maintenance to be handled by a third party.
You don’t want your source code to be easily changed or be susceptible to security vulnerabilities over time.
Examples of vendors that use this type of model include both MACH and monolithic providers such as: Amplience, Contentful, ContentStack, WebFlow, Hubspot, and SquareSpace. It’s important to note that this vendor license supported model may cost more upfront for headless implementations, and you won’t be able to fork and customize the backend source code.
When an open-source model is the right choice:
You have a digital maturity of at least 2 and ideally 3.
You want complete control over your source code for editing and collaboration.
You want a community of developers constantly updating and helping with bug fixes.
Examples of open-source vendors include Wordpress and Drupal. It’s important to note that although it is free to get started, ongoing support and maintenance costs can get expensive. Teams also need to take on the responsibility of supporting your open source CMS implementation and integration with third-party applications. Robust integration projects can be quite challenging at the enterprise scale of the spectrum and often require a team of expensive certified developers to assemble all the resources required for a functioning digital experience and adhering to organisational security
Free Trials & Tiers
Many vendor-supported models also provide a free offering in the form of either a free trial or free tier enabling you to try before you buy or build a proof of concept to de-risk your decision making process. These plans are usually severely restricted in the functionality provided or the amount of usage or throughput that can be placed onto the CMS. Free tiers are typically aimed towards developers and hobby level projects.
Amplience and ContentStack provide free trials that enable you to test the CMS and build a proof of concept over a given length of time.
Contentful provides both a free tier for developers as well as trials of their enterprise version.
Monthly vs Annual Contracts
Enterprises will typically sign multi-year annual contracts with most technology vendors, especially those that will become critical parts of their business operations, such as their CMS and eCommerce platform of choice. License-based vendors are largely incentivized to offer annual subscriptions to their customers as it binds both parties into a long term relationship and shared interest in success of the project.
If you’re just starting up or you are a SMB where it’s difficult to predict cash flow, you will likely be more comfortable with a monthly subscription based pricing model or open source model where you simply pay for the hosting after the initial implementation. Many of the smaller CMS providers offer this tier of pricing and typically start from around $10-50 a month on the low end.
Outside of the platform, vendor, product or service costs, you will also need to factor in the implementation costs of your chosen platform. This may vary greatly depending on the size of your project, the size of your team, the location of your team, and their experience level.
Leveraging an existing internal team or hiring one may be an attractive approach to take as you’ll be directly in control of the process. If you’re having to build a team, this may take some time to assemble and you’ll need not just developers but also project managers, experienced solution architects and UX experts on hand to see your solution through to completion.
Alternatively, you could have an external solution integrator (SI) or agency implement your solution, but this may cost a premium with additional rates for not only the developers but also project managers and other members of staff, on top of a percentage premium. This premium rate typically comes with the peace of mind that the project will be managed and implemented by an experienced team, lowering risk. When working with an SI, it’s important to ensure close alignment with estimated project costs, implementation time frames, scope, and expectations. If you take the external implementation approach, it’s worthwhile putting your project out to tender and having a handful of solution implementers bid on your project so you can benchmark each offering. The cheapest implementor may not always be the best choice and it’s important to weigh the pros and cons of each implementer and look at their past clients/experiences.
A blended approach of a small internal team complemented by the support of an external SI is another popular choice. The great thing here is that you’ll have a larger team supporting the initial implementation, speeding up time to market, while also training up a smaller internal team to maintain your implementation post live.
If you’d like recommendations on experienced headless solution integrators, we would be happy to assist you by providing a short-list of our top picks.
Resources and time approach
This method is ideal for projects which are difficult to measure due to the extensive size, or where milestones may change along the way. It factors time estimates and the number of resources used into account. While this approach is typically the most flexible for either party, there can be risks for both sides with feature creep, escalating costs and timescales. At this point, it’s likely best to adopt a retainer based approach for on-going iterations.
Fixed price with a blended rate approach
An estimated project cost with a fixed price and blended rate is another popular way for SI’s to charge clients. This method usually incorporates the average cost of the whole team (combining individual rates and dividing them by the number of team members). A fixed price works well when there is a straightforward project with fewer milestones. For example, a small micro-site or the creation of a specific landing page.
Budget development approach
A budget development approach takes into account varying options which can be added or dismissed during the development stage depending on the client’s budget for each part of the process. This method works well for large-scale projects which involve many aspects and moving components. Since headless CMS implementations can be extensive highly iterative projects, using this approach allows both the agency and client to consider a baseline budget in addition to increases or decreases for additional components over time.
Additional Considerations When Selecting Your CMS
One of the first and most important considerations is to understand your company’s technical maturity or whether your business strategy requires you to mature along the technical maturity scale from where you are today.