Hosting and Licensing Models in Plain Words

Monday, 09:40, at Ashgrove Housing. Two quotes sit side by side on Lena's desk. One is for a cloud help desk, charged for each technician every month. The number at the bottom is small enough that the finance director has already said "fine" in the corridor. The other is for a help desk that would run on the housing association's own server, charged once for the installation. The number at the bottom is large enough that the same director has asked whether it includes a car. Lena runs a desk of four and has been asked to recommend one by Thursday. She knows the second number is bigger. She does not know what either number will look like in year three, or who will patch the server in the second case. She does not know where the tenants' repair tickets would physically sit in the first, or how she would get them back out of either. Nobody has asked her those questions. The quotes do not answer them, because quotes answer the question "how much", and that was never the hard one.

A hosting model is where the tool runs: on a server your organisation controls, or on servers the vendor controls and you reach over the internet. A licensing model is how you pay for the right to use it. That could be a recurring amount for each technician, or an amount for the installation as a whole. Or, with open-source tools, it could be nothing for the licence and everything in hours. The two are separate questions that arrive stapled together on quotes. Most of the confusion in this corner of the decision comes from answering them as one. This article is part of our Choosing a Ticketing System series. It is about pulling the two questions apart and answering each in plain words. The arithmetic is in categories and hours rather than in anybody's currency.

It covers why hosting and licensing are two decisions, then cloud hosting and self-hosting, each on its own terms. Next come paying per agent per month and paying per installation, each on its own terms. Then it covers what each model costs in control and in data location, and the money over years as arithmetic with no currency in it. It finishes with the hours, which are a cost too, a short war story and the total-cost worksheet to copy.

One disclosure before we start. QuerySolv, whose team publishes this library, is a self-hosted help desk licensed once per installation. So it sits in one of the four boxes described below. Read the self-hosted and per-installation sections with that in mind, and hold them to the same standard as the others.

Two Decisions That Arrive as One

Hosting and licensing are independent, and all four combinations exist. There are cloud tools charged per agent per month, which is the pairing most people picture when they say "cloud". There are cloud tools charged a flat amount for the whole organisation. There are self-hosted tools charged per agent, usually yearly. And there are self-hosted tools charged once for the installation, with or without an optional yearly amount for upgrades and support. Open-source tools form a fifth case, self-hosted and unlicensed. The money line is near zero and the hours line is the whole story. The trade-offs there have their own series, starting with the real trade-offs, not the slogans. The hosting question on its own, including what "cloud-based" and "web-based" actually mean and the rented-server shape in between, is taken further in Cloud-Based Help Desk Software vs Self-Hosted.

Separating the two questions matters because they are decided by different people on different grounds. Where the data lives is a question for whoever signs for data protection and for whoever would have to run a server. How the tool is paid for is a question for whoever owns the budget over several years. When the two are answered together, the budget holder tends to decide both. In that case, the hosting question gets settled by the size of the first year's number. That is how a housing association's tenant records end up in another country without anyone having chosen that. It was simply attached to the cheaper quote.

Answer hosting first, because it is often a filter rather than a preference. Suppose your organisation's rules, contracts or regulators say that certain data stays on your own equipment or in your own country. Then half the market has just excused itself. The licensing comparison is now between the remaining half. If there is no such rule, hosting is a genuine choice, and the sections below give you the terms to make it. Then answer licensing, with a horizon of at least three years, because every licensing model looks reasonable in year one. Year one is what the model was designed to look reasonable in.

Cloud Hosting in Plain Words

Cloud hosting means the vendor runs the software on their servers and you reach it through a web browser from anywhere with an internet connection. You do not install anything. You do not patch anything. When the vendor releases a new version it simply appears, usually overnight, sometimes with a banner announcing that the buttons have moved. Backups, uptime, security patching of the server and the capacity to handle your volume are the vendor's problem. You are paying them, among other things, to make those problems go away.

What you get is real and should be written in the worksheet as a credit. No server to buy or maintain. No upgrade project, ever. Technicians working from home reach the desk without a remote-access arrangement. A vendor whose entire business is running this one application will, on average, run it more reliably than an administrator who runs it alongside forty other things. For a desk with no spare server, no one to patch it and no appetite for the job, this is not a convenience. It is the difference between a desk that has a tool and a desk that has a project.

What you give up is also real and is usually left off the worksheet because it has no number. Your tickets are in a building you have never seen, with every requester's name, every internal note and every attachment. They are under a contract that says what the vendor may do with them and a law that depends on where the building is. Upgrades happen when the vendor decides, including the ones that change how the screen works the week your new technician started. Outages happen on the vendor's schedule. When the internet connection to the building fails, the desk is unreachable precisely when the most people are trying to reach it. The exit is on the vendor's terms. What you can export, in what format, and how long after you stop paying the data stays available are clauses in a contract. They are clauses worth reading before you sign rather than after you have decided to leave. A cloud desk is a very good tenancy. Read the lease.

Self-Hosting in Plain Words

Self-hosting means the software runs on a server your organisation controls, in your building or in a data centre you rent. The data never leaves equipment you can point at. You install it and decide when to upgrade it. You back it up with the same routine you use for everything else. When the internet connection fails the desk keeps working for everyone inside the building. If your rules say the data stays here, this is the model that lets you say yes without a conversation with a lawyer. Some self-hosted tools run as a single service on an ordinary Windows server. Others need a database server, a web server and an operating system of their own. The difference in installation effort is a question for the trial rather than the brochure.

What you get is control, and control is the thing people underprice. You know where the data is. You decide when the buttons move, and you can read the release notes first and choose a quiet week. Your backup is your backup, kept for as long as your retention policy says, restorable without a support ticket to anyone. The exit is a database and a folder of attachments you already have. That turns the migration question from "what will they let us export" into "what will the new tool import". And the desk does not stop working because somebody else's data centre had a bad afternoon.

What you take on is a job, and the job is the part the quote never shows. A server, physical or virtual, with capacity, power and a place in the backup schedule. Patching of the operating system on a schedule. Upgrades of the help desk software itself, which someone must plan, test and run. You need a certificate for the portal so that browsers do not warn requesters away. It expires on a schedule of its own and has taken down more self-hosted portals than any hardware failure. Remote access for technicians working from home, which means a secure way into the building's network and a policy about it. Monitoring, so that you know the desk is down before the desk tells you. None of these is hard. All of them are hours, every month, forever. A desk that does not write them down has not costed the model. It has costed the licence and hoped.

Per Agent Per Month in Plain Words

Per agent per month means you pay a recurring amount for each technician account, every month, for as long as you use the tool. An agent, in this vocabulary, is a person who works tickets. That means a technician, a lead, usually anyone who can reply to a requester or change a ticket's status. Requesters are almost always free. They raise tickets and reply to them and nobody counts them. The grey area is everyone in between. That includes the manager who needs to see the queue once a week, and the warehouse lead who approves equipment requests. It includes the finance person who checks the renewal report. Some models count them as agents. Some have a cheaper kind of account for them. Some count them only if they ever touch a ticket. Ask, because the answer shapes who gets an account.

The model rewards small teams and short horizons. Three technicians for a year is a small, predictable amount that a finance director will approve in a corridor. If the desk shrinks, so does the bill. Nothing is paid up front. Nothing is wasted if the tool turns out to be wrong, and leaving is a matter of not renewing. For a desk that does not know how big it will be in two years, that flexibility has genuine value, and the worksheet should credit it.

What the model quietly shapes is the desk itself. Every account is a line on a bill. So the part-time technician who covers Fridays becomes a question. The manager who wants to look becomes a question. The answer to "can you just check whether my ticket has moved" becomes a technician doing the checking. Giving the manager an account costs money every month and interrupting the technician costs nothing anyone measures. Over years the model also compounds in two directions at once: with headcount, and with time. Five technicians for five years is five times five times twelve months of the rate. The rate is a number the vendor may revise at each renewal. None of this is a trick. It is what "per agent per month" means when you multiply it out, and the multiplication is the part the first-year quote does not do for you.

Per Installation in Plain Words

Per installation means you pay once for the right to run the software on one installation, for however many people use it. That right lasts for as long as you choose to run that version. Many vendors add an optional yearly amount for upgrades and support. Then the shape of the spend is a larger first payment followed by smaller ones you can decline. The licence is for the installation rather than the people. So the Friday technician, the warehouse lead and the manager who wants to look all get accounts without anyone opening a spreadsheet. QuerySolv is licensed this way, once per installation, so hold this section to the same standard as the one before it.

The model rewards long horizons and growing teams. Consider a desk that expects to run the same tool for five years, and to add people as the organisation grows. It pays once and spends the following years on the work rather than on the renewal. Giving every stakeholder an account costs nothing beyond the hours to set it up, which removes the quiet pressure to route questions through technicians. And because the money is paid, there is no renewal at which the rate can be revised against you, only an upgrade payment you can take or leave.

What it costs is a larger decision up front, and a different kind of risk. The first payment is bigger than a month of anything. If the tool turns out to be wrong, the money is spent. The fair trial described in designing a fair trial matters more under this model than any other, for exactly that reason. The licence usually comes paired with self-hosting, so the hours of running a server are part of the real cost whether or not the quote mentions them. And your protection against the vendor losing interest is different. Under the recurring model you stop paying. Under this one you keep a version that works and lose the upgrades, which is better in some ways and worse in others. The exit criterion from the scoring sheet is whether you can get your data out in plain formats. That is what makes the difference bearable. A licence you own for a tool you can leave is a strong position. A licence you own for a tool you cannot is a very comfortable trap.

What Each Model Costs in Control and in Data Location

Money is the easiest cost to see and the least interesting difference between the models. The money can be calculated and the other costs have to be judged. The table below puts the four combinations side by side on the dimensions that do not appear on a quote. Those are where the data is, who decides when things change and what happens when connections fail. They also include what the exit looks like, and what the hours are spent on. Read it as a list of questions for your own organisation rather than a ranking. A row that is a serious cost for a clinic is a shrug for a design studio.

Two rows deserve a second look. The exit row is the one that grows in importance every month you own the tool, and it is the one most desks notice last. The migration side of it is costed in migration cost is part of the decision. The hours row is where cloud and self-hosted trade places in a way the quote hides. Cloud removes the server hours and adds hours you did not expect. Examples are rewriting the training guide because the layout changed, or waiting for a vendor to acknowledge an outage you can see and cannot touch. Neither column is zero. Honest worksheets have a number in both.

The Money Over Years: Arithmetic Without Prices

The arithmetic for each model is short. Doing it with your own quotes over three and five years is the only way to compare them. The models are shaped to look different at different horizons. Under the recurring model, the money is the number of agent accounts, times the monthly rate, times the number of months. Add whatever the vendor adds for extra storage, extra channels or a higher level of support. Assume the rate rises at each renewal unless the contract fixes it. Write the cost as a formula with your own numbers: accounts, times rate, times thirty-six for three years and sixty for five. Then do it again with the headcount you honestly expect in year three, not the headcount you have today.

Under the per-installation model, start with the licence. Add the optional yearly upgrade and support amount times the number of years you intend to take it. Add the server. The server is not free even if it already exists. It costs a share of a virtual machine, its storage, its backup capacity and its place in whatever you pay for the room it sits in. Put a number on it, however rough. Then add the thing both columns need and only one quote mentions: the migration, which is mostly hours and is costed in its own article. The result is two columns of money at three years and at five, and they will usually cross somewhere. Where they cross is a fact about your desk, not a fact about the market, and it is the fact the decision record should state.

Beware the two standard distortions. The first is comparing the first year of the recurring model against the whole of the per-installation one. That is comparing a month's rent to a mortgage and concluding that renting is cheaper. The second is the reverse: comparing the per-installation licence to the recurring total over ten years, as if the self-hosted server ran itself for a decade. Use the same horizon in both columns, put hours in both columns, and then step back and ask which column's number you are more confident of. A recurring total depends on a rate the vendor sets later. A per-installation total depends on hours you estimate now. Both are guesses. Only one of them is your guess.

Hours Are a Cost Too

Every model costs hours, and the hours belong in the worksheet in their own column. Convert them to money only if your organisation insists. An hour of a technician's week is a thing a desk lead can feel and a budget line is not. For a self-hosted desk the recurring hours are the server work. That includes patching on a schedule, checking that backups completed and testing a restore now and then. It includes renewing the certificate before it expires, planning and running each upgrade, and keeping remote access working for the people at home. For a worked example, take a fictional desk of four, stated as such. Ashgrove's Lena estimated between two and five hours a month in a steady state, with an upgrade adding a day each time. I would treat that range as typical for a tool that runs as one service. I would treat the low end as optimistic for anything that needs its own database and web server.

For a cloud desk the recurring hours are smaller and stranger. Somebody reads the release notes and rewrites the one-page guide when the screen changes, which happens on the vendor's schedule. Somebody raises support tickets with the vendor and waits for them, which is time the self-hosted administrator spends fixing the thing instead. Somebody reviews the contract at renewal, checks the data-location clause has not moved, and takes the export the exit plan requires. An export you have never taken is an exit you do not have. Lena put between half an hour and two hours a month against the cloud column, and the day of an upgrade against the self-hosted one. Those are her numbers for her desk. Yours will be yours, and the point is only that neither column is blank.

A Short War Story: The Server Nobody Owned at Meridian Parts

Meridian Parts chose a self-hosted, licensed-once help desk for its three-person desk largely because the five-year arithmetic was plainly in its favour. The desk lead, Carla, wrote the server into the plan as "existing virtual machine, no additional cost". Nobody wrote down who would look after it. For eighteen months it worked. In that time the operating system was never patched. The portal certificate was renewed once by hand and then forgotten. The backup job wrote nightly to a folder on the same disk as the database, which the backup report described as successful every morning. On a Monday in the second year the certificate expired. Every requester's browser refused the portal. The desk ran on e-mail alone for two days while Carla found out how certificates were renewed. Six weeks later the disk failed, and the nightly backups failed with it. Fourteen months of ticket history were rebuilt from the mail server's copies over roughly a hundred and twenty technician hours. The licence remained a sound purchase, and the decision had still cost more than the recurring quote it beat on paper. The lesson Carla wrote in the record was short: you did not buy a server. You bought a job, and a job with no name on it is not done.

The Total-Cost Worksheet

The worksheet below compares two or more candidates over three and five years in categories and hours. Your own quotes go into the money lines and your own estimates into the hours lines. Fill in one column per candidate, use the same horizon in every column, and leave no line blank. A line you cannot estimate gets a range and a note, never a dash. The hours lines are the ones most desks skip and the ones most decisions later turn on. The last block asks the two questions no quote answers, where the data lives and how you leave. A total that leaves them out is not a total.

TOTAL-COST WORKSHEET — CATEGORIES AND HOURS, SAME HORIZON IN EVERY COLUMN
Desk: ______________________   Prepared by: ______________   Date: ____________
Agents today: ____   Agents expected in year three: ____   Occasional users: ____
Hosting filter applied first:  [ ] data must stay on our equipment  [ ] no constraint

                                      Candidate A          Candidate B          Candidate C
Model (hosting / licensing)           ______________       ______________       ______________

MONEY — THREE YEARS
  Licence or recurring charges        ______________       ______________       ______________
  Extra charges (storage, channels,
    support level, occasional users)  ______________       ______________       ______________
  Server, storage, backup share       ______________       ______________       ______________
  Migration (from the migration
    cost sheet)                       ______________       ______________       ______________
  Three-year money total              ______________       ______________       ______________

MONEY — FIVE YEARS (same lines, year-three headcount, rate rises assumed)
  Five-year money total               ______________       ______________       ______________

HOURS PER MONTH, STEADY STATE (ranges, not points)
  Patching and server care            ____ to ____         ____ to ____         ____ to ____
  Backup checks and restore tests     ____ to ____         ____ to ____         ____ to ____
  Certificate and remote access       ____ to ____         ____ to ____         ____ to ____
  Vendor liaison and support tickets  ____ to ____         ____ to ____         ____ to ____
  Adapting to vendor-driven changes   ____ to ____         ____ to ____         ____ to ____
  Routing questions for people who
    have no account (interruptions)   ____ to ____         ____ to ____         ____ to ____
  Monthly hours total                 ____ to ____         ____ to ____         ____ to ____

HOURS PER EVENT
  Each upgrade (plan, test, run)      ______________       ______________       ______________
  Upgrades expected in five years     ______________       ______________       ______________
  Taking and checking the exit export ______________       ______________       ______________

THE TWO QUESTIONS NO QUOTE ANSWERS
  Where the data lives (country, building, whose equipment)   ________  ________  ________
  Exit: what we can export, in what format, how long after
    we stop paying it stays available                        ________  ________  ________

Where the money columns cross (year): ______   Most uncertain line in each column: ______
Owner of the hours lines if chosen: ______________   Signed: ______________

Lena's worksheet for Ashgrove ran to one page and took a morning. Most of it was spent finding out that the tenants' repair tickets counted as personal data under a contract nobody on the desk had read. That settled hosting before any number was compared. The two self-hosted candidates then went through the money and hours lines. The server was written in as a real cost, and the certificate was given an owner and a calendar entry. The five-year totals came out closer than the first-year quotes had suggested, which is how these things usually come out. The finance director, shown the hours column, asked who was going to do all that. It was, Lena said afterwards, the first good question anyone had asked about either quote.

Frequently Asked Questions