Virtual TimeClock Support Blog

Time Clock Software: Renting vs Purchasing

February 19, 2018

We talk regularly with our current and prospective users about the differences between Virtual TimeClock (purchased software) and SaaS (Software as a Service) time clocks. Purchased software is a software license with a one-time cost while SaaS ("cloud" or web-based software) is an ongoing monthly or yearly software subscription. There are advantages to SaaS, but for many users the benefits of purchased software outweigh the benefits of a SaaS solution. In this blog we'll compare the cost of both types of software.

Due to the nature of subscription-based pricing, SaaS solutions are usually less expensive up-front compared to purchased software but have a much higher total cost over time. To help illustrate this, we'll use an example to show the difference in yearly cost between purchased software and SaaS, as well as the difference in total cost of ownership.

Yearly Software Cost
Let's say you have 10 employees who need to track their time in the office. We will compare Virtual TimeClock to a generic SaaS time clock. Using Virtual TimeClock on a single computer, as a central kiosk, with unlimited users is a one-time cost of $195. A second option would be to install Virtual TimeClock on 10 computers, with unlimited users, at a one-time purchase of $690. SaaS time clock is $5 a month per user on top of a monthly base fee of $20. Assuming prices don't change, SaaS time clock will cost $70 a month or $840 every year. The graph below shows ten years of yearly costs between Virtual TimeClock and SaaS time clock.

Virtual TimeClock Yearly Cost

Total Software Cost
Another helpful way to illustrate the cost difference is by total cost of the software over a period of years. The graph below shows the total cost of SaaS time clock with 10 users over a span of ten years. Since Virtual TimeClock is a one-time purchase, the total cost is always $690 and will never go up.

Virtual TimeClock Total Cost

Before the first year is even over, Virtual TimeClock users begin to see cost savings. By year five, SaaS time clock costs nearly six times more than Virtual TimeClock and by year ten the cost difference is a staggering $7700, with the SaaS time clock totaling nearly twelve times the total cost of Virtual TimeClock.

Virtual TimeClock offers an optional software Maintenance & Support program for around $125 a year which provides free support and upgrades but factoring that optional fee into the total cost of ownership is still a tiny fraction of the cost of SaaS time clocks.

Cost Benefit of Purchased Software

As illustrated in the graphs above, purchasing a license for your software is far more cost-effective than the ongoing cost of SaaS products. In addition, owning a software license ensures the price will never change. By paying a monthly subscription fee, users are subject to price increases, as explained in this terms & conditions excerpt from a popular SaaS time clock website:

"The service fees and charges may be changed from time to time by sending customer notification, or by posting an updated fee schedule on our website thirty days prior to changes. Customer agrees that we will charge said fees directly to customer's credit card."

There are several benefits to SaaS, or cloud-based time clocks, but the cost benefit of a one-time software license purchase make Virtual TimeClock the right solution for many users. Check out this article comparing cloud-based services vs local data storage.