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Total Economic Impact of Microsoft Exchange Server 2010

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Total Economic Impact of Microsoft Exchange Server 2010 Prepared for Microsoft Corporation November 2009 The Total Economic Impact™ Of Microsoft Exchange 2010 Project Director: Amit Diddee The Total Economic Impact Of Microsoft Exchange 2010 TABLE OF CONTENTS Executive Summary ............................................................................................................................... 3 Purpose .............................................................................................................................................. 3 Methodology ....................................................................................................................................... 3 Approach ............................................................................................................................................ 3 Key Findings ...................................................................................................................................... 4 Disclosures ......................................................................................................................................... 5 Microsoft Exchange 2010: Overview ..................................................................................................... 6 Analysis ................................................................................................................................................... 7 Interview Highlights ............................................................................................................................ 7 TEI Framework .................................................................................................................................. 9 Costs ................................................................................................................................................ 11 Benefits ............................................................................................................................................ 16 Risk ................................................................................................................................................... 25 Flexibility ........................................................................................................................................... 28 TEI Framework: Summary............................................................................................................... 29 Study Conclusions ................................................................................................................................ 31 Appendix A: Total Economic Impact™ Overview ............................................................................... 32 Appendix B: Glossary ........................................................................................................................... 33 Appendix C: About the Project Manager ............................................................................................. 34 © 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to www.forrester.com. - 2 - The Total Economic Impact Of Microsoft Exchange 2010 Executive Summary In October 2009, Microsoft commissioned Forrester Consulting to examine the total economic impact and potential return on investment (ROI) enterprises may realize by deploying Microsoft Exchange 2010. Microsoft Exchange 2010 is the newest release of Microsoft’s messaging and collaborative server software solution featuring email, voicemail, calendaring, contacts, and tasks; support for mobile and Web-based access to information; and support for data storage. This study illustrates the financial impact of deploying Microsoft Exchange 2010 for a retail and distribution organization of 1,500 employees and $450 million in annual revenue. In conducting in-depth interviews with nine existing customers, Forrester found that these companies achieved cost avoidance of storage, reduced cost of high availability, cost avoidance in voicemail, savings in backup systems, fewer help desk calls, cost avoidance of mobility, enhanced communication security, and simplified compliance and legal discovery, among other benefits. Purpose The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Microsoft Exchange 2010 on their organizations. Forrester’s aim is to clearly show all calculations and assumptions used in the analysis. Readers should use this study to better understand and communicate a business case for investing in Microsoft Exchange 2010. Methodology Microsoft selected Forrester for this project because of its industry expertise in infrastructure and operations and Forrester’s Total Economic Impact™ (TEI) methodology. TEI not only measures costs and cost reduction (areas that are typically accounted for within IT) but also weighs the enabling value of a technology in increasing the effectiveness of overall business processes. For this study, Forrester employed four fundamental elements of TEI in modeling Microsoft Exchange 2010: 1. Total cost of ownership. 2. Direct and indirect benefits to the entire organization. 3. Flexibility. 4. Risk. Given the increasing sophistication that enterprises have regarding cost analyses related to IT investments, Forrester’s TEI methodology serves an extremely useful purpose by providing a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology. Approach Forrester used a five-step approach for this study: 1. Forrester gathered data from existing Forrester research relative to Microsoft Exchange 2010 and the infrastructure and operations market in general. - 3 - The Total Economic Impact Of Microsoft Exchange 2010 2. Forrester interviewed Microsoft marketing and sales personnel to fully understand the potential (or intended) value proposition of Microsoft Exchange 2010 solutions. 3. Forrester conducted a series of in-depth interviews with nine organizations currently using Microsoft Exchange 2010 solutions. 4. Forrester constructed a financial model representative of the interviews. This model can be found in the TEI Framework section below. 5. Forrester created a composite organization based on the interviews and populated the framework using data from the interviews as applied to the composite organization. Key Findings Forrester’s study yielded three key findings: • ROI. Based on the interviews with the nine existing customers, Forrester constructed a TEI framework for a composite organization and the associated ROI analysis illustrating the financial impact areas. As seen in Table 1, the ROI for our composite company, computed from hard benefits, is 48% with a breakeven point (payback period) of less than six months after deployment. • Benefits. Based on information collected in interviews with current Microsoft Exchange 2010 customers, Forrester found that organizations can realize benefits in the form of cost avoidance of storage, reduced cost of high availability, cost avoidance in voicemail, savings in backup systems, fewer help desk calls, cost avoidance of mobility, enhanced communication security, and simplified compliance and legal discovery. The total present value of risk-adjusted benefits for three years amounts to $455,750. • Costs. Forrester learned that the key cost components of a Microsoft Exchange 2010 implementation are the hardware costs, software license fees, implementation costs, administration and maintenance costs, and IT and help desk training costs. The total present value of risk-adjusted costs for three years amounts to $307,641. Table 1 illustrates the risk-adjusted cash flow for the composite organization based on data and characteristics obtained during the interview process. Forrester risk-adjusts these values to take into account the potential uncertainty that exists in estimating the costs and benefits of a technology investment. The risk-adjusted value is meant to provide a conservative estimation, incorporating any potential risk factors that may later affect the original cost and benefit estimates. For a more in- depth explanation of risk and risk adjustments used in this study, please see the Risk section. - 4 - The Total Economic Impact Of Microsoft Exchange 2010 Table 1: Composite Company ROI, Risk-Adjusted Summary financial Original estimate Risk-adjusted results ROI 103% 48% Payback period (months) 2.4 5.2 Total costs (PV) $291,796 $307,641 Total benefits (PV) $591,366 $455,750 Total (NPV) $299,570 $148,109 Source: Forrester Research, Inc. Disclosures The reader should be aware of the following: • The study is commissioned by Microsoft and delivered by the Forrester Consulting group. • Microsoft reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study. • The customer names for the interviews were provided by Microsoft. • Forrester makes no assumptions as to the potential return on investment that other organizations will receive. Forrester strongly
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