In today's competitive lab environment, a LIMS is indispensable. A LIMS implementation is often a complex project that can very easily go awry if all pieces of the project are not properly budgeted and accounted for. That budget is often a very large number, which should cover everything involved in deploying a powerful software system. That includes the critical choice of hosting model. The hosting model should be decided upon and approved prior to selecting a LIMS, because making that decision later in the process could stall your project.

In this blog post, we’re going to discuss the budgeting considerations for on-premises, cloud (including private cloud), and software as a service (SaaS) hosting models, from the initial costs through the long-term cost of ownership. Regardless of the hosting model, there will be some infrastructure costs. These costs often are unaccounted for when developing an appropriate LIMS implementation budget. Keeping this in mind should help you know what to ask vendors about in your next LIMS implementation or upgrade project. It will also prepare you for the inevitable questions from your organization’s finance team when making the budget request.

We’ll start with an overview of the common hosting models and their initial costs. When you evaluate these options, it's crucial to consider the long-term total cost of ownership (TCO). TCO extends beyond the initial purchase price and implementation costs to include all direct and indirect costs over the system's lifespan.

On-Premises LIMS Hosting: The Traditional Approach

With on-premises hosting, the LIMS software and data reside on servers within the lab's own physical infrastructure. This model is attractive for its maximum control and extensive customization capabilities, especially if the lab possesses significant internal IT resources. This model also offers enhanced security and easier regulatory compliance. For labs with high data throughput, real-time instrument integration, or large data sets (e.g., genomics, mass spectrometry), latency can be a significant issue. Hosting the LIMS on-premises can provide superior performance by minimizing network delays between instruments, users, and the LIMS database.

The main difference between on-premises hosting and cloud or SaaS models is that the on-premises setup costs can be charged as a capital expense rather than an operating expense. This is sometimes advantageous depending on budgeting cycles, whether depreciation is a factor, or whether outright ownership is desired. Labs will choose on-premises hosting when the benefits of strict control, extensive customizability, strong security, and performance guarantees outweigh the reduced upfront costs, simplified IT management, and immediate scalability offered by cloud and SaaS models.

Briefly, the pros of on-premises hosting are:

• Full control over your data
• Capability for extensive customization

The cons include

• A large upfront investment
• Significant ongoing IT burden on your organization
• The need to attribute carbon emissions associated with the LIMS hardware to Scope 2 for accounting purposes
• Potential for unpredictable costs

Cloud-Based LIMS Hosting: Flexibility and Scalability

The cloud-based hosting model describes any LIMS deployed on third-party cloud infrastructure like AWS, Azure, or Google Cloud. The lab manages the LIMS software, but the cloud provider handles the underlying infrastructure. This means that the costs are classified as an operating expense, which can be advantageous in some financial models. For example, if you want a customizable LIMS without the significant upfront cost associated with an on-premises deployment.

Cloud hosting offers two options, public and private. For improved data sovereignty and security, organizations may choose a private cloud hosting option. Unlike a public cloud, where resources (servers, storage, networking) are shared among multiple tenants or users, a private cloud ensures that all resources are isolated and used only by your lab.

A cloud-based hosting model might be chosen if your organization anticipates significant growth or expansion into additional product lines with variable testing needs. The inherent flexibility of a cloud LIMS allows it to scale well. The upfront costs of cloud hosting are lower than those of on-premises hosting, making a LIMS more affordable at first glance.

The additional pros of cloud-based LIMS are

• Reduced direct IT expenses
• Status of associated carbon emissions as Scope 3
• Improved disaster recovery capabilities.

The cons include

• Ongoing and variable expenses
• Reliance on internet connectivity
• Proliferation of cluttered data if the system is not managed properly.

Software-as-a-Service (SaaS) LIMS: The Subscription Model

This model describes any LIMS that is accessed via a web browser and that is hosted and fully managed by the LIMS vendor on their cloud infrastructure. Although the barriers to entry are the lowest for this model, your ability to customize the software is quite limited. If your lab’s workflows are complex, you may want to rule out this option.

However, there are compelling advantages to the SaaS model of LIMS hosting. Because the vendor manages everything, your IT staff or contractor does not need to be familiar with the quirks of a LIMS. You don’t need to purchase any servers or related hardware, and any associated carbon emissions are classed as Scope 3 for accounting purposes.

Comparing Costs: A Side-by-side Analysis

We’ve created a table to help your organization compare hosting models quickly using the cost criteria that matter to you.

Here are some brief scenario-based examples to illustrate how these models might apply in practice:

Tips for Winning the Budget Battle and Making an Informed Decision

Understanding your options is the biggest hurdle to choosing the right LIMS hosting model for your organization. In addition to weighing the pros and cons of budgeting for each, there are additional tactics that can help you sway the decision makers. Some of these include the following.

• ‍Quantify the Value: Translate the LIMS benefits (efficiency, compliance, data quality) into tangible financial savings or ROI. ‍
• Focus on TCO, Not Just Upfront Costs: Educate stakeholders on the long-term financial implications of each model. ‍
• Align with Business Goals: Show how the chosen hosting model supports overall lab and organizational objectives. ‍
• Risk Mitigation: Highlight how certain hosting models (e.g., SaaS) reduce IT risks and ensure business continuity. ‍
• Leverage Vendor Expertise: Work with LIMS vendors and consultancies (like CSols) to get accurate cost estimates and build a compelling financial proposal. ‍
• Consider Future Growth: Choose a solution that can scale up with your lab's evolving needs without requiring significant additional investments.

Make the hosting decision early in your implementation process to avoid project delays. Because CSols has extensive experience with implementing LIMS solutions using each of these models, we can help your organization choose the appropriate hosting solution for your budget.

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How did you choose your LIMS hosting model? Would you do it differently next time?

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