Headless CMS Cost - A CFO Guide
How much does a Headless CMS cost? In some ways that is the wrong question. The Headless CMS license fee is a fraction of the overall cost of moving to Headless. The following guide for those in finance helps to explain why you need to take a more holistic perspective when evaluating your options.
Co-Founder / CEO
January 22, 2024
8 min read
Headless CMS Cost - An Introduction
When it comes to evaluating the cost of a Headless CMS, the cost of the Headless CMS represents just one part of the overall cost needed. After all, a Headless CMS is usually part of a bespoke website build, which straight away places it in a different cost bracket to an off-the-shelf/ template-based traditional CMS-based website like a WordPress site.
Secondly, most Headless CMS deployments are part of a website migration off a legacy CMS onto a more modern composable architecture, and thus migration costs need to be factored in.
Finally, the Return On Investment (RoI) is not immediate, with some of the gains being hard to value making it difficult to reduce the go/no go decision to a simple mathematical calculation.
The vast majority of companies moving to Headless tend to be early adopters of cutting-edge technologies and ones that are not price-sensitive. If short-term cost is a prime factor in the decision to move to Headless then it may not be for you. It is not the cheapest option.
In summary, the adoption of Headless has primarily been amongst innovators and early adopters until now, and it is increasingly becoming more mainstream as the value proposition is better understood.
So what are some of the questions that your finance leaders may have? The following represent some of the questions you need to address when proposing a move.
Key Questions - Headless CMS Costings
The following represent some of the most common questions we encounter when it comes to indicative costs when it comes to moving to Headless. Naturally, we can’t give ballpark costs - the variables that influence the result are wide-ranging and too numerous to distill into a short blog.
1 - Why do we need a new CMS?
It is important to recognize that a CMS migration is a relatively significant decision. The Chief Technology Officer (CTO) or Chief Marketing Officer (CMO) tends to lead the decision, with other stakeholders being involved in a ‘sign off’ capacity.
The motivations to migrate to a modern CMS can be wide-ranging. On one side of the fence there tends to be a litany of WordPress issues; ranging from usability to site performance (issues with website bloat) through to security concerts representing some of the key reasons leaders want to move to a more modern CMS.
On the Headless CMS-side, the range of pull factors is compelling and includes; productivity gains, efficiency gains, and performance enhancements, to name but a few of the benefits of Headless.
It is thus important to be clear on the primary motivations behind the move, so the reasons can be communicated to those most impacted by the change (often the marketing function).
2- Why do we need a new CMS now?
“Kicking the can down the road” can often be a popular option for those managing budgets in a finance function. If the decision can be deferred then perhaps it should be? Again, this goes back to the ‘business case’ for a CMS upgrade.
Is a new Headless CMS deployment a nice-to-have or a need-to-have?
The answers to these questions will need to be made on a case-by-case basis and it is thus important to ensure your motivations for the change are well-argued. Trigger points for a migration decision can include; a finance raise, a new CMO or CTO looking to “make an impact”, or because the ‘status quo’ is simply not tenable any longer.
3- Can we quantify the likely gains we’ll get from moving to a new CMS?
For those evaluating investment decisions spanning different departments, it can be hard to nail down a figure for migration to Headless in part due to the hidden costs. “Revenue growth” and “cost savings” represent the most compelling arguments for prioritizing budget requests, and thus being able to align the move to Headless with these will help you gain support from the finance function.
As Headless is a bespoke website development it is going to require a “decent investment”. In many instances, years of under-investment or vendor lock-in with a traditional CMS means that the ‘can has been well and truly kicked down the road’ over successive annual cycles.
Is it easy to quantify the gain from moving to Headless? No, however, for high-traffic websites, marginal performance gains typically translate into significant top-line growth. Hence, a largely one-off investment that delivers productivity and efficiency gains as well as site performance enhancements will translate into a positive Return on Investment (RoI).
4- What ongoing costs do I need to be aware of?
A Headless CMS deployment consists of a license fee, design costs, and access to a front-end developer to manage and maintain the site. Ideally, that person is in-house and can be called upon on an ad-hoc basis to help manage the site. As developers often sit in the product function and are a scarce (and expensive resource), it is worth agreeing upfront on what their monthly availability will be. As otherwise the marketing function won’t be able to easily manage and maintain the site.
Without guaranteed access to a developer you’ll need to contract an external agency on a retainer (I’d recommend against putting a Headless CMS Freelancer on retainer as they will likely need to prioritize existing website builds and thus are likely to have limited availability). It goes back to an earlier point made - a Headless CMS-backed website is a cutting-edge bespoke website development and is best suited to users with access to in-house developers with the capacity to manage and maintain the site.
5- Is this already in the budget?
Most finance teams aim to avoid surprises by ensuring all function leaders have prepared annual budgets in advance. “CMS costs” are likely to be existing line items in a Profit and Loss (hosting and license fees) but these tend to be pretty modest.
A CMS replatform, or website migration tends to be more of an ad hoc one-off activity that may not have been budgeted for. Once the new site is live, the ongoing costs tend to be pretty modest (with variable costs contingent upon the amount of brand-new pages needed).
It is worth noting that more mature companies (with decent web traffic and growth ambitions) recognise the importance of continuous and ongoing investment in a website and its infrastructure, and thus will already be investing in it on an annual basis.
6- How will a new CMS help us achieve our business objectives?
For companies that are growth-orientated and are looking to scale, a new modern CMS can help deliver on this growth (assuming the underlying site traffic is already significant, and an adequately resourced marketing function is investing in growth). A new CMS is often bundled into a broader website project that also; upgrades the visual identity, reviews site messaging and analyzes funnel optimization in parallel.
In short, a modern Headless CMS represents an infrastructure upgrade, but without a holistic review of the wider website, you are unlikely to get the gains you are looking for (especially in the short term).
7- Have you selected the right vendor for the new CMS?
“Vendor selection” is a tricky topic when it comes to a site migration to a Headless CMS. Like most SaaS categories, the choice can be overwhelming.
As a nascent category, most of the leading brands are not well-known, and Headless CMS pricing is opaque, to say the least.
Do you go with the market leader?
Do you look at reviews on G2 or Capterra to help influence the decision?
Do you go for the best fit from a specialist Headless CMS vendor like Contento that is 100% focused on websites?
It is probably worth shortlisting 2 or 3 from the above and then using this as a basis to explore further. Multiple CMS use is increasingly popular so one route is to consider a phased adoption approach where you migrate a section of the site e.g. blogs to the new CMS, before migrating the rest of the site.
Finally, this Best Headless CMS 2024 guide can aid you in short-listing some options.
8- What criteria did you use to select your chosen CMS?
The criteria for selecting a new Headless CMS can range from; a word-of-mouth recommendation, to a preference from the agency-partner selected, through to familiarity with one platform from previous roles. Trying to navigate and make a selection on a technical basis via comparisons is likely to be too time-consuming (if you chose this route the Jamstack Headless CMS listing is the most exhaustive).
As a technical decision the CTO should lead the selection process, safe in the knowledge it is a reversible one. Unlike monolithic all-in-one CMS where you are locked in, vendor lock-in is less of an issue with a composable architecture.
In short, this is an additional primary benefit of a Headless CMS approach - you can interchange elements without having to throw everything out and starting again. That said there are softer lock-in elements like upskilling, after all the last thing the marketing team or developers will want is to have to learn a new CMS shortly after deploying a new one.
9- What are the Hidden Costs associated with the implementation of a new CMS?
There are several one-off costs associated with the initial migration. Ideally, an agency partner is engaged to build the new site and to manage the migration. When undertaking a migration, ensure SEO expertise is baked in to de-risk traffic loss.
The main thing to be aware of when it comes to all CMS is the ongoing associated costs. The license costs tend to be modest (although several of the market leaders have been accused of price-gouging). When it comes to Headless, as a more technical approach, access to a senior developer is important. Ideally, this person is in-house and can be used on an ad-hoc basis to support new page development and bug-fixing. Otherwise, a monthly retainer with an external agency will need to be put in place.
Similarly, many of the “jobs to be done” in a traditional CMS can be addressed by someone more junior or by deploying a plug-in, whereas Headless CMS maintenance is more specialized and thus is more expensive.
10- Does Headless require more people?
A website backed by a Headless CMS does not require more people working on it compared to a Traditional CMS like WordPress. However, those working on it are likely to differ. With a Traditional CMS, where the site has been “handed over” it is likely that someone in the marketing team will be responsible for management and maintenance. As the market-leading CMS odds are high that someone in the team will have been trained on WordPress previously. With a Headless CMS-backed website, it is a more technical setup where reliance on plugins to manage various tasks is not “a thing”. You’ll thus need access to a front-end developer who can help build new pages and to manage the various technical issues that crop up during the year.
11- What are the implementation costs?
For most Headless CMS deployments a migration off a traditional CMS is needed. Naturally, the cost of this will vary greatly depending on who you engage to assist with the migration, as well as due to factors like the size and complexity of the existing infrastructure and website.
12- What does the cost look like for year 1 and how does it scale next year?
The pricing models for Headless CMS are extremely complicated, especially for the market leaders who are looking to significantly increase their Average Contract Value (ACV). The main drivers of license costs are when triggers kick in and you need to move to the next tier. In some instances, 10X jumps are in place so it is worth assessing immediate and future needs.
However, as referenced earlier - the main costs related to a Headless CMS post-migration tend to be the costs associated with the time senior in-house developers need to work on the site. NB I use the word ‘senior’ intentionally, given a Headless CMS deployment is not something most junior developers can easily navigate.
13- How many licenses do we need?
Seat-based pricing is pretty common, and thus considering current and future requirements for licenses helps you assess initial and subsequent costs. Headless CMS Pricing tends to be complicated to say the least, and thus you must understand the various ratchet points between price tiers. There is evidence of some price-gouging taking place with 10X ratchets between price points so getting clarity in advance on these trigger points is important. Newer entrants like Contento tend to take a more relaxed approach to pricing and thus facilitate seat growth without penalties.
14- Is Headless worth the investment?
So where does this leave us?
A Headless CMS-backed website is a cutting-edge modern approach that is becoming increasingly popular each year. It is particularly popular with high-traffic volume sites where optimizing for growth is a key requirement. And this is the very purpose of Headless. With an all-in-one traditional CMS, you are not optimized for growth. You are selecting a low-cost route with known limitations. It will get you so far - but at some point, a Headless upgrade will be needed.
Summary and Conclusion
A Headless CMS-backed website is a modern, scalable, flexible approach to building a bespoke website safe in the knowledge that it is future-proofed and provides the architecture to drive growth. The benefit set is significant for the right company and this is the key point. Provided you are looking to grow, have decent web traffic already, want a cutting-edge bespoke design, and have access to in-house development resources the migration to Headless will deliver immense value.
Having successfully navigated the very early stages of your business, you are beginning to transition to your next phase. Perhaps you’ve some initial traction, or are considering a fundraise? As always your website will be instrumental in supporting these aims. So what are some of the things you need to think about to manage this next phase of your journey?
21 November 2023