A security information and event management (SIEM) solution aggregates and correlates data from across the organization’s complex, interconnected environment. Modern enterprise IT consists of decentralized users and applications that require organizations to implement technologies that provide visibility across disparate security solutions. Simultaneously, SIEMs have a reputation for being difficult and expensive to manage.
Licensing and hardware account for only a small fraction of SIEM costs. From employee training to time spent chasing false alerts, organizations need to evaluate all financial and operational costs associated with their SIEM. While log management may be the foundation of the SIEM’s value, its automation and analytics enable organizations to continuously monitor their security measures, identify behavioral anomalies, and maintain regulatory compliance.
Understanding a SIEM’s total cost of ownership (TCO) requires organizations to look at direct, indirect, and opportunity costs related to deploying, managing, and maintaining the system.
What is a SIEM’s Total Cost of Ownership (TCO)?
When deploying a SIEM, the total cost of ownership (TCO) is the financial assessment that calculates the full lifecycle costs related to:
- Deploying: Purchasing hardware or software.
- Managing: Hiring and training staff to use the system for security control monitoring.
- Maintaining: Ensuring continued system performance and security by tuning, hardening, and updating it.
TCO analysis seeks to provide decision-makers with a realistic budget forecast so they can compare different deployment models and vendors. While organizations often perceive a SIEM as a cost center, linking the solution to tangible risk reduction, operational efficiency, and improved security posture can position the purchase as a strategic investment.
What Are a SIEM’s Direct Costs?
Direct costs are the straightforward, tangible, line-items on purchase orders and invoices. However, they represent only a small fraction of TCO. Some direct costs include:
- Licensing and subscription fees: Software costs or annual renewable fees, typically based on data volumes, event rates, number of users, or number of devices.
- Hardware and infrastructure: Servers, storage arrays and networking equipment for on-premises deployments or compute and storage costs for cloud-based solutions.
- Implementation and deployment: Initial setup, configuration, and integration, typically from a vendor’s professional services or third-party consultant.
- Support and maintenance contracts: Annual recurring fees for vendor technical support, software updates, security patches, and access to new features.
What Are a SIEM’s Indirect Costs
Often called hidden costs, indirect costs are the ongoing operational expenses related to managing and maintaining the SIEM. While difficult to quantify, they often account for the largest spend. Some indirect costs include:
- Personnel and staffing: Salaries and benefits for security analysts, engineers, and administrators who manage, monitor, and respond to alerts.
- Training and development: Costs for formal courses, certifications, and personnel time to learn how to use the solution and understand new features.
- Customization and integration: Staff time and salary arising from integrating new log sources, developing custom parsing rules, building new dashboards, and creating custom alerts.
- Alert fatigue and false positives: Staff time and resources from investigating low-fidelity alerts.
What Are a SIEM’s Opportunity Costs?
Opportunity costs are the abstract, strategically important benefits and cost savings that come from implementing a SIEM solution or strategy. These represent how the security operations center (SOC) could spend its time if it were automating tasks with the SIEM.
Some opportunity costs include:
- Analyst Time on Low-Value Tasks: Security analyst time and salary related to manual tasks like alert triage, rule tuning, and system maintenance that the SIEM would reallocate to high-value activities that reduce risk, like proactive threat hunting, strategic planning, or security architecture improvement.
- Inefficient incident response: Increased security incident costs arising from slow Mean Time to Detect (MTTD) and Mean Time to Respond (MTTR) that a SIEM would reduce as reflected by reduced dwell time.
- Compliance violations: Fines, penalties, or customer churn arising from failed security controls that the SIEM’s real-time monitoring and detection could have flagged or prevented.
For example, one expert noted that 55% of security leaders found their teams faced alert fatigue from assessing low-fidelity alerts and false positives, ultimately suggesting that risk amplification that aggregated and correlates signals across time, assets, and analytical engines would improve incident response capabilities.
What Are the Different TCO Calculations for On-Premises and Cloud-Based SIEMs?
At a high level, the TCO aggregates direct costs, indirect costs, and opportunity costs. Since an on-premises SIEM and cloud-based SIEM have different infrastructure and staffing needs, organizations should consider how those differences impact the TCO.
On-Premises SIEM
When organizations deploy an on-premises SIEM, they purchase and host all the hardware in their own data centers. With this traditional model, they should understand the following impact on TCO:
- Capital expenditures: Direct costs related to purchasing servers, storage, networking hardware, and software licenses.
- Operational burden: Indirect costs related to staff and salaries for ongoing system administration, including patching, hardware maintenance, scalability planning, and disaster recovery.
- Long term costs: Direct and indirect costs related to maintenance contracts, power, cooling, and personnel.
- Scalability: Opportunity costs related to integrating new data sources or higher log volumes that can mitigate data breach risks and costs, like inability to update detections or lack of updated data for analytics models.
Cloud-Hosted and SaaS SIEM TCO
In a cloud-based or SaaS SIEM model, the vendor hosts and manages the infrastructure. With this model, organizations should understand the following impact on TCO:
- Operational Expenditures: Direct costs related to subscription model instead of capital investment.
- Data Ingestion and Storage Fees: Direct costs related to subscription models based on data volume and retention, especially when adding new log sources or storing raw data for threat hunting and compliance.
- High-value tasks: Opportunity cost reduction related to vendor managing and maintaining infrastructure that allows security analysts to focus on strategic security activities.
- Deployment Time: Indirect costs related to integrating security tools and implementing built-in content.
5 Considerations When Calculating SIEM TCO
Every organization has different business risks, compliance requirements, and security objectives. While companies in highly regulated industries may need to maintain control over their security telemetry, other organizations may prioritize other aspects of their SIEM deployment. When calculating TCO, organizations incorporate the following considerations into their calculations.
Baseline Data Volume Projection
Any SIEM cost calculation should incorporate the number of log events per second, per minute, or per day that the solution will ingest. Additionally, the organization should try to estimate long-term growth. Since storing and processing event and log data can be costly, organizations should consider solutions that allow them to categorize security data into:
- Actionable data: Messages used for immediate threat detection, compliance dashboards, and anticipated investigations.
- Standby data: Messages unrelated to immediate threat responses but likely valuable later, like forensic data.
Additionally, organizations should consider costs related to spikes in data usage, like during security incident investigation or audits.
Licensing and Consumption Costs
When researching SIEM solutions, organizations should consider the vendor’s pricing model. Choosing a vendor who applies a consumption-based pricing model that accounts for fluctuations in data usage. A consumption-based pricing model enables:
- Flexible and shared costs: Effective cost management for changes in data use arising from activities like dips or spikes during holidays, seasonal swings based on operational cadence, or lower volumes on weekends.
- Cost management and predictability: Set pricing that works like a prepaid gift card to consume from total monthly allotment.
- Focus on critical data: Manage costs by storing less critical or less time-sensitive data in a data lake.
Model Storage and Tiering Costs
Organizations may need to retain data but not actively use it daily. A SIEM that allows organizations to store and manage data enables real-time search, events, alerts, and dashboards while reducing overall costs.
The modern IT environment can generate terabytes of data daily, yet most companies feel forced to carefully choose the security telemetry they use to avoid costs arising from the single tier licensing models, typically based on metrics like log volume or resource. While security teams may not need all data immediately, failing to appropriately collect and store this telemetry means the organization takes on more risks with blind spots and limits the security team’s ability to conduct full investigations.
Organizations should consider whether a solution enables data management and routing with built-in data pipelines that simplify data handling by fully processing active data and applying light processing and enrichment to standby data before routing it to a cost-effective storage location.
Estimate Implementation and Ongoing Services Costs
The initial deployment comes with one-time costs. However, organizations often struggle to estimate future ongoing costs when researching solutions. Some considerations when estimating professional services include:
- Onboarding services with dedicated engineers.
- Rebuilding alerts, dashboards, and reports when transitioning from a legacy system.
- Building custom parsing, enrichment, alerting, and dashboards.
- Managing transitions to reduce risk and minimize downtime.
- Upgrading from an open source version to a paid subscription.
- Planning for disaster recovery to ensure high availability.
- Identifying inefficiencies or risks to optimize the deployment.
- Providing workshops to train staff.
Factor Indirect and Opportunity Costs by Analyzing Efficiency Gains
For Artificial intelligence (AI) and machine learning (ML) to be fully fully effective, the SIEM must appropriately prepare data preparation, aligned to the type of analytics performed to achieve the desired data enrichment. By aligning use cases to analytics, data enrichment, and log sources, organizations can validate their ability to meet current and planned security objectives.
Some considerations when researching a SIEM’s data enrichment capabilities should include:
- Critical context: Reduce false positives by enriching event and log data, like geolocation, user identity, and threat intelligence.
- Risk scoring: Reduce alert triage time with dynamic risk scores generated by a correlation engine.
- Asset classification: Identify high-value systems by tagging critical assets.
- Contextual event correlation: Reduce investigation times by linking logs to specific assets so security teams can identify affected systems faster.
Graylog Security: Reduce SIEM TCO Without Compromise
By leveraging Graylog Security’s smart data routing, tiered storage, and selective retrieval capabilities, organizations can create focused, meaningful, and cost-effective SIEM deployments. Graylog’s pricing model aligns cost with utility rather than volume to reduce TCO.
With our built-in content, anomaly detection, and streamlined workflows, security teams reduce indirect and opportunity costs to improve the value of their SIEM. By spending less time tuning the infrastructure and chasing false-positive, security analysts can spend more time on high-impact work.
To learn more about how Graylog enables strong security outcomes and a lower TCO, contact us today for a demo.
