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What are the main CTO (CTOaaS, CaaS) types?

December 03, 2022

All companies and startups want to be successful. It is axiomatic. And the role of the CTO in achieving success is indisputable. But there is one "thing" – small startups and businesses do not always have enough budget to hire a Technology Director full-time. According to Glassdoor research, the average CTO’s annual salary is $273,783. It’s a lot of money, even for medium-sized businesses.

Main CTO (CTOaaS, CaaS) types: CTO salary.
Source: Glassdoor.

But, despite its salary, the value of the CTO’s work is much greater. It is the link between developers, owners, and investors. He's in charge of the following:

  • optimization of company resources for development;

  • introduction of modern technologies that help to achieve goals faster;

  • preparation of an up-to-date roadmap to achieve the company’s short- and long-term goals;

  • presentations of work to owners and investors;

  • identifies possible improvements to the product or service;

  • plans of technology development strategies.

And sometimes even takes the Senior or Lead developer functions, participates in interviews when hiring new developers, and conducts onboarding.

We know companies such as Apple, Google, and other, thanks to CTO's work. Their strategic planning and configuration of the practical work of the entire team help start-ups become famous.

We have great news for you if you are a startup owner and want to hire a top-notch CTO to promote the business even faster. The article below will describe six types of CTO and CTO as a Service. This information will help you recruit the right professional at the right price to get the necessary advice for business development.

Six types of CTO services

The six types of CTO (CTOaaS, CaaS), which we will discuss below, are relevant to any business. If you are looking for Tech Directors for your business right now and want to choose the correct option – the information below is for you.

We have prepared general information about each type of CTO and a table with which you can select a specialist without effort.

Full-time internal CTO

Pros Cons
Every day at hand High salary (from $20,000 per month)
Responsible for all CTO’s tasks Need a place to work
40+ hours per week busy with your project Additional costs (leave, hospital...)

It is the classic CTU you hire full-time. It performs the basic tasks we discussed above. The full-time Technology Director is always at the office and 100% dedicated to your project. This type of CTO is always in the workplace and responds to changes.

High wages are the only drawback of hiring a full-time CTO for small start-ups and companies. If you can’t pay $20,000 to a top specialist, it’s better to choose CaaS at a lower price. We’ll talk about them below.

Full-time offshore CTO

Pros Cons
Salary 2.5 times lower than Internal CTO ($9’000+/month) Loss of attention due to the possibility of combining work in several companies
Responsible for all CTO’s tasks Infrequently in the office and works online
No need to organize the offline workplace

This type of CTO (CaaS) is similar to the internal Technology Director, but often works remotely. Frequently, such specialists combine online work in several companies. The main advantage of hiring a Director – you get an offshore CTO who solves crucial issues at a reduced price.

But at the same time, you need to be prepared for the fact that the CTO will not be able to respond and perform tasks immediately.

One-time services CTO (CaaS)

Pros Cons
Perform any tasks for CTO you require Loss of attention due to the possibility of combining work in several companies
One-time monetary compensation for completed tasks (starting from $300/hour) information from salary.com After completing tasks, you need to agree on new conditions
No need to organize the offline workplace

CTO-as-a-service (CaaS) allows you to hire an on-demand consultant to laser-focus the critical problems your business needs to solve. So while the rates of $300+/hour can sound scary, it will save tens or hundreds of thousands of dollars by a long shot.

Every CTO enjoys troubleshooting complex cases and is well-versed in finding quick solutions. 20 hours of CTO time can be more than enough to set you on the right track and can replace months of work of software engineers banging heads against the wall.

Interim CTO services

Pros Cons
Will perform CTO tasks until you find a new Technology Director Need an additional workplace
Salary negotiated individually ($74/hour or $10`000+/month)* information from Ziprecruiter.com It may take time to get the temporary CTO up to speed

If you leave the startup without CTO indefinitely, the business processes may stop, and the results will be unsatisfactory. So, interim services CTO (CaaS) will help you take the Director of Technology position. It will not only help you to control all processes in the team, but will also help you participate in interviews with candidates for the CTO seat.

Interim services CaaS are excellent for small startups that only configure the business process flow. It’s like a budget trial to help put things in order.

Fractional CTO

Pros Cons
Flexible salary (from $50-$150/hour)* according to Payscale.com You can only contact at a certain time
Able to perform all CTO issues May need a separate workplace

It is CTO as a Service is available by the hour. It means you can specify any tasks, but pay the CTO’s time in work. He can work on the company's development strategy from scratch or adjust the necessary processes within the team.

Also, startup owners hire a Fractional CTO to hear a different view. This step is essential if the business does not work for a long time.

Project CTO

Pros Cons
Perform any tasks for CTO you requireResponsible for technology implementation and teamwork on separate product/project Will not solve issues outside its product
Better chance of project success High salary – up to $15,000/month* according to Payscale.com
May need a place to work

It is often called a CTO with solid Project Management Skills. It would be best to hire such a professional at the beginning of the project. So you will save money in the long term.

CTO (CaaS) in your project:

  • implement the technologies suitable for the creation and success of this particular project;

  • will tune the development team, not the whole company, but only those involved in the project;

  • will create a current project roadmap.

And will fulfill other duties of the CTO, but to create and promote a specific project.

Final Thoughts: How to choose a suitable CTO (CTOaaS, CaaS)

We hope you have already realized how important CTO (or CTOaaS) is in business. CTO is not just a colleague. It is an investment in the future of business.

We have created a table to make it easier for you to choose the suitable CTO type for your business.

Criteria Full-time internal Full-time offshore One-time services Interim services Fractional CTO Project CTO
Full-time at hand + + - - - -
Salary $21’000+ /month $9’000+/ month $75+/hour $10’000+ /month $50+/hour $15,000/ month
Need an offline workplace + - - +/- - +/-
Responsibility area All CTO issues All CTO issues Specific CTO issues All CTO issues Specific CTO issues All one project issues
Can combine multiple positions + + - - - -

The information above will help you to hire a good CTO or choose CTO as a Service. And this step will help your business become even more successful.

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Volodymyr Katanskyi
Article by:
Volodymyr Katanskyi
Volodymyr Katanskyi
Volodymyr has over 12 years of experience in software development and has studied Engineering and Multicultural Education. While travelling around the world, he invented the adaptive workflow framework that helped manage a team of around 100 team members alone, stay productive and scale. This knowledge was incorporated in a form of StartupCraft Inc company.
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