In February 2002 the Crimson Consulting Group conducted total-cost-of-ownership (TCO) analysis comparing BEA WebLogic with IBM WebSphere. Taking into account the complete set of cost elements of a typical project – hardware, software, tools, training, maintenance, and support, as well as development and operational labor – the analyst firm found that the total cost of ownership of a project built on IBM software and hardware is 2.4 times higher than the comparable project built on BEA (software) and Sun (hardware) solution. This translated into $32.1 million in savings for the represented enterprise customer relationship management (CRM) deployment.

Crimson found that the largest component of TCO is labor. Development labor using WebSphere can be much higher than for BEA WebLogic Server because of the complexity of developing within the many software components marketed under the WebSphere brand. Crimson’s research revealed that, while IBM may discount software licenses heavily or even give them away for free, IBM’s services costs and support fees more than made up for any initial savings. In addition, Crimson found that “opportunity costs,” while difficult to measure, may in fact be the biggest cost of all. Nothing kills businesses faster than the inability to change nimbly and quickly.