Office 365 TEI Study from ForresterSummary of “The Total Economic ImpactTM Of Microsoft Office 365 – Enterprise Customers”

2014 report by Forrester Consulting, commissioned by Microsoft

Methodology for the study

Forrester Consulting was commissioned by Microsoft to examine the

potential return on investment that enterprises could realize with Office 365.

Identified 63

organizations

with Office 365

experience to either

interview or survey*

1Interviewed

marketing, sales

and consulting

personnel at

Microsoft

2Created

composite

organization

based on interview

and survey findings

3Constructed

financial model

populated with cost

and benefit data

4Adjusted the

financial model

based on risks

and issues

5Applied the

risk-adjusted

financial model

to the composite

organization

6

*Surveyed companies identified by Forrester, and interviewed companies provided by Microsoft.

Description of composite organization

6K employees in North America comprising 2,500

knowledge who were moved to

Office 365 and 3,500 operational

workers

300road warriors who travel four days per week

for 45 weeks out of the year

8 officesbetween the U.S. and Canada,

plus operations in Europe and Asia

Original component Office 365 upgrade

Office Professional Plus 2010 Office 365 Professional Plus

Exchange 2010 Exchange Online

SharePoint 2010 SharePoint Online

Lync Online

Yammer

OneDrive

A light manufacturing, distribution and sales

company. The study looks at the first phase

migration of North American knowledge

workers.

Acme was interested in Office 365 in order

to reduce the total cost of ownership,

convert costs from CapEx to OpEx, and

improve user productivity and collaboration.

Five benefit areas

Control & ComplianceMobility Business Intelligence Enterprise SocialTechnology

$(2,000,000)

$(1,000,000)

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

Initial Year 1 Year 2 Year 3

Summary of TEI

($113,361)$222,799

$1,719,923

$3,819,353

Total Costs Total Benefits Running Total

$5.6Min risk-adjusted net present value over three years

163%three-year, risk-adjusted ROI

$1,348three-year, risk-adjusted NPV/user

7monthsfor Office 365 payback

468%Internal Rate of Return

Microsoft Office 365

“We were looking at our five-year IT plan, and the trends were clear. We knew we had to move to a subscription model in order to keep up-to-date on the latest technologies in an effective and efficient way.”

“Moving to Office 365 is part of an overall program to cut support costs in half. To do that we needed to move to more of a consumer style support model.”

“We were reaching a tipping point with over half of our system users being mobile users. All roads lead to mobile first and we needed to support it through the cloud.”

In the customers’ own words

Technology Cost

Savings

$2.43Min benefits resulting from lower

infrastructure costs, implementation

efforts, licenses, and IT support

$272KImplementation cost savings

$672KServer, hardware and hosting cost

savings

$1.43MIT support savings

$60KMicrosoft server license

savings

“Our employees can now get their data and

apps from anywhere without having to

mess with VPNs. Office 365 is really intuitive

and simple to use.”

“We no longer need to open remote offices

everywhere since people can work from home.

We expect to start savings $2 to $3 million

per year in office costs next year.”

Mobility

$2.81Min savings from a more

productive mobile workforce

6.8%Reduction in

compliance costs

10.7%Reduction in the time spent

on eDiscovery efforts

73%Reduction in number of

data breaches

Control & compliance

$90Kin labor hour savings from

eliminating additional projects for

implementing redundant solutions

8.5%Decrease in time

to make decisions

Business intelligence

$3.2Min production gains from

better and faster access

to the right information

30minutes saved

per day

“Additionally, the social aspect of Office 365 has

resulted in direct cost savings by being able to

eliminate other social and collaboration services”

“Integration with Yammer has improved collaboration.

We are seeing knowledge sharing increase.”

Enterprise social

$247Kin benefits from better

communications and eliminating

redundant social tools

“Additionally, the social aspect of Office 365 has

resulted in direct cost savings by being able to

eliminate other social and collaboration services”

“Integration with Yammer has improved collaboration.

We are seeing knowledge sharing increase.”

The cost of implementation

Summary of the value of Office 365Forrester estimates 7 month payback for Office 365

Control & Compliance Business Intelligence Enterprise SocialMobilityTechnology Cost

Savings

Improve agility, reduce

costs, and provide the

tools to work efficiently

Enable employees to

work from almost

anywhere on any device

Help protect customer

data and ensure

compliance

Provide greater insights

into business

performance

Empower the sales force

with collaborative tools

that increase customer

revenue

163%three-year, risk-adjusted ROI

$5.6 millionrisk-adjusted NPV

468%Internal Rate of Return

Office 365 TEI Study from ForresterSummary of “The Total Economic ImpactTM Of Microsoft Office 365 – Enterprise Customers”

2014 report by Forrester Consulting, commissioned by Microsoft