Understanding Odoo's Costs of Ownership
... and a few other things you want to know

Odoo is tremendous software. For the features, I am not sure a better value exists in the market. For that reason, users globally are flocking to the platform daily. 

The value proposition is clear: Odoo has the ability to replace 3, 4, or 5+ systems in a single company for the cost of only one. Companies are not only saving on the licensing costs of all of those disconnected systems, they are benefiting from a single, fully integrated platform to boot.

Consider the chart below when trying to understand just how many features and apps Odoo can replace, then think about what it costs to pay for three or four of those systems just to get the functionality already in Odoo.

 


Let's just get this out of the way now... 

Odoo is not free, despite what you may have read online. ERP software is not free, and never will be. It is absolutely true that you can acquire the code for free using the Community Edition, but the idea that there are no expenses to operate the software is not realistic.

Odoo can be broken down into these primary categories:

  1. Software Licenses

  2. Implementation Costs

  3. Hosting Costs

  4. Support Costs

  5. Upgrade Costs

Software Licenses

Odoo is offered in two basic forms, "Enterprise" and "Community". The Enterprise Version offers more apps and also has a direct, transparent license cost. The "Community" version of Odoo is Open Source and can be downloaded and used without any direct license fee paid to Odoo. A full comparison and list of the features in each edition can be found here.

Unlike most competitors of Odoo, the software licensing costs are transparent and easy to understand. In general, customers pay a per user fee, and a per app fee. Note, that is not a per user / per app fee which is a different structure common with many competitors. Full software pricing can be found here.

Implementation Costs

I am sure there are a few companies who have successfully implemented Odoo on their own, but for most, a quality implementation partner will be required to complete the project. Implementation pricing can vary regionally and based on the partners price model. Other considerations include the size of your company, apps required for your business structure, planned customization's, and data migration expectations. 

An often overlooked cost of implementation is your team's time. Employees will be often be asked to work weekends or nights and the company will often provide some food for those hard workers. When reviewing a proposal from a partner, consider that you need to make yourself and key members of your team available for most of those hours. The partner will need to meet with you weekly or in some cases daily to complete the project. 

Hosting Costs

Hosting is an area where users can control their spending, and even save on it all together if you choose the Odoo SaaS offering. Odoo can be deployed in a few different ways.

  1. Odoo SaaS - Cost of hosting is included in the general Odoo licensing expense - The user foregoes the ability to greatly customize Odoo when using this platform, but the cost savings are a big win.

  2. Odoo.sh - Cost of hosting is directly tied to the size of the database, storage, and number of daily users that the company needs to allow for. The Odoo.sh platform is very popular and affordable. Pricing can be found here.

  3. On-Premise Hosting - Some customers are uncomfortable or have company policies against "Cloud" hosting of their system. There are server hardware, and Operating System costs associated with On-Premise Hosting. Don't forget as well, that you will probably need your own IT professional to manage the server.

  4. Choose Your Own Cloud - For customers interested in cloud hosting that do not want to use the Odoo.sh platform, they can deploy Odoo on Amazon Web Services, Digital Ocean, or any other hosting service online. Each has it's own pro's and con's and fee structure.

Support Costs

For customers using the Odoo Enterprise Edition, some limited support is included with the monthly licensing fee. I like to prepare customers for this as "Technical Support" only. Odoo will fix bugs, and provide technical fixes for problems arising from normal use of the software. This support is not designed to help users migrate data, or perfectly tune the settings of Odoo to match your business. This level of attention is typically provided by partners directly. 

I think it's fair to estimate as high as 10% - 20% of your implementation expense to spend yearly on support with your partner. The business will change, and you will want to deepen the level of automation as you become more familiar with Odoo. These costs will continue, but they should have a clear and exciting return on investment as your business reaps the benefits.

More information on the level of support you can expect from Odoo can be found here.

Upgrade Costs 

We suggest for most companies, that you upgrade to the latest version every two to three years. Upgrades are included with the Enterprise Edition. This means that Odoo will at no cost migrate the base code and database for you. However, there are still costs associated with the testing and preparedness for this project. With each new release Odoo deepens the software's functionality. In order to configure those new settings and have a smooth experience, your partner will need to be involved in this process.

Simply put, upgrading an ERP system isn't free even when the vendor processes the database at no additional expense. There will need to be dedicated time to test, and train on the new functionality that will all come at a cost.

Understanding Odoo's Costs of Ownership
Kyle Robinson 3 September, 2020
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How Much Does Odoo Cost to Implement?
It just depends on the finishes you choose.