What the Domo Total Cost of Ownership (TCO) Means for Your Data Stack

Investing in the right tech can mean the difference between being another player in your market and being the leader. A McKinsey Global Survey released in 2024 found that top-performing companies were more likely to invest in and adopt advanced technology such as cloud, AI, and generative AI to transform their businesses and create new revenue streams. 

But it’s that pesky little qualifier—the right—that you shouldn’t overlook when you make those investment decisions. Having more technology solutions at your fingertips doesn’t necessarily translate into the right capabilities for your organization.

And, you have to be careful about cost creep. A lot of tech doesn’t come cheap. Stacking program upon platform upon application can eat up budget if you aren’t critically reviewing how each new addition works within your company’s larger technology ecosystem.  

Real quick: Wondering if your tech stack is costing you more than it should? Get a custom consultation to see how Domo can help you simplify, save, and scale smarter. 

The price tag of a tech stack 

Quantifying the average cost of a tech stack isn’t exactly an easy calculation because there’s not always agreement on what costs should be included. But Zylow, a Software as a Service (SaaS) management company, gives us a good place to start.  

Zylo’s SaaS Management Index tabulated the average costs for SaaS in 2024. Last year, companies spent a little more than $4,800 per employee on SaaS. Businesses with 500 or fewer employees spent about $11.5 million, while average annual costs for SaaS in companies with 10,000 or more employees reached a whopping $284 million—both pricey bills in their own right.  

Overall, spending on SaaS saw a more than 9 percent jump year over year, with one of the primary drivers being adoption of AI. In 2024, spending on AI tools increased by about 75 percent.  

This could be good news for companies; they clearly feel confident that the new tools hitting the market can make a difference for their bottom lines. IT teams, on the other hand, may not be feeling the love. Zylo’s data shows that about half of the apps that were integrated into companies’ work streams were owned by individual lines of business, which can make it difficult for IT teams to maintain visibility of and control over the tech stack.  

Therein lies some of the other pricey problems. As you build out a tech stack, you need to ask yourself whether you’re factoring in all of the costs: 

• What are the pricing models for different tools? Are they subscription-based pricing models that allow everyone in your enterprise to access a tool or do you need individual licenses for unique users? Paying for a lot of licenses on tools that are used minimally can significantly raise costs over time.  

• What level of staffing is needed to support the tools? You’ll obviously need people with data analysis expertise to effectively use a data platform. But you may also need people to integrate the platform into your systems, perform maintenance on it, train staff to use it, and ensure that the platform stays secure. You must think more broadly about ongoing expenses before adopting new technology, particularly as they relate to your organization’s headcount.  

• Are you paying for functionality that you already have? Tech sprawl is real. As different parts of the business begin adding their own platforms or aps to the tech stack, it becomes increasingly difficult to determine whether your tools have overlapping capabilities. You could essentially be paying for the same tools two or three times over.  

On the opposite side of these very practical costs, you also have to think about opportunity costs. Many new tools are, in fact, worth it. So if you decide to stick with your legacy systems that don’t offer all of the functionality that more advanced tech offers, you’ll have to eat the cost of manual reporting or the cost of slow decision-making. Downtime caused by lagging systems and more error-prone manual processes aren’t just silly nuisances; there is a cost of doing nothing.  

How Domo reduces business intelligence TCO 

Transforming your raw data into business intelligence can lead to huge wins across your organization. So investing in data analytics technology doesn’t just make factual sense; it makes dollars and cents.  

According to analysis from Nucleus Research, for every dollar invested into general analytics technology, companies can expect to see a return of $6.20. But an investment into Domo boosts that return to $6.93. Part of the way that Domo creates value for our customers is by bringing down tech spend. On average, Domo drives a 20 percent reduction in costs on technology, according to Nucleus. 

How does Domo save so much money? Our platform can replace piecemeal tech solutions with one complete, efficient system. With Domo, you are able to:  

• Access more than 1,000 pre-built connectors that enable you to integrate data into our platform.  
• Use our ETL tools to easily clean, combine, and transform your data sets. 
• Perform advanced analytics using automated machine learning and AI features.  
• Visualize your analysis and insights into interactive and customizable charts and dashboards.  

Consolidating these capabilities into one tool not only means fewer costly contracts with different companies, but it also can help reduce the number of employees needed with specialized skills to run a multi-tool stack.  

For example, a small company using a single data platform to perform all of these functions may be able to reduce headcount by one or two full-time employees, which can potentially save the organization in the ballpark of up to $200,000 per year on salaries alone. And, all employees can be trained on one tool, which allows for individuals to conduct analysis more autonomously. This also enabling teams to more easily share insights across the company and generate faster, more data-driven decisions.     

The value of modern BI platforms 

Our pricing model also plays an important role in trimming down your expenses. With Domo, you only pay for what you use.  

Domo offers credit-based pricing, so customers can purchase a credit package and access all of Domo’s features—for an unlimited number of users. Different capabilities require different numbers of credits, but if you need to scale up, all you have to do is purchase more of those credits. It’s a simple and cost-efficient way to work.   

Freddy’s Frozen Custard & Steakburgers, one of the fastest-expanding fast casual franchises in the US, credits Domo’s consumption model for helping to drive its growth strategies. Being able to access the full Domo toolset has encouraged teams across the company to experiment more with data science in order to inform everything from their real estate strategy to the promotions that they run to the items that they offer on the menu.  

“Previously, we were only able to do some simple modeling. Now, we can run our billions of rows of data through behavioral models to understand how our guests are ordering and why,” said Sean Thompson, vice president of IT at Freddy’s. “It’s like there was a giant stop sign in front of us, and now that stop sign is out of our way.”  

Don’t overlook the Domo opportunity cost 

With Domo, you get the best of both worlds: a full suite of data tools at a likely lower total cost of ownership—plus the flexibility to grow as your business evolves. 

Want help figuring out what Domo could save—and create—for your business? Request a custom consultation with our team. We’ll walk you through our pricing model, show you practical ways teams are consolidating tools and costs, and help you explore where Domo can deliver the most value for you.