The Total Economic Impact™
Of Microsoft 365 E3
Cost Savings And Business Benefits
Enabled By E3
OCTOBER 2022

A FORRESTER TOTAL ECONOMIC IMPACT™ STUDY COMMISSIONED BY MICROSOFT 365

Table Of Contents
Executive Summary ................................................. 1

Consulting Team: Richard Cavallaro
Jonny Cook

Voice Of The Customer .......................................... 4
The Microsoft 365 E3 Customer Journey .............. 7
Key Challenges ...................................................... 7
Investment Objectives ............................................ 8
Composite Organization ......................................... 8
Analysis Of Benefits .............................................. 11
Vendor Consolidation Savings ............................. 11
End User Device Savings..................................... 13
Endpoint Deployment And Management Time
Savings ................................................................. 15
IT Administration And Help Desk ......................... 17
End User Productivity Improvements ................... 19
Reduced Travel Expense ..................................... 22
Reduced Risk Of A Data Breach .......................... 24
Unquantified Benefits ........................................... 26
Flexibility ............................................................... 26
Analysis Of Costs .................................................. 27
Initial Planning And Implementation ..................... 27
Microsoft Licensing Cost ...................................... 28
E3 Ongoing Management .................................... 29
End User Training ................................................ 29
Device Refresh ..................................................... 30
Financial Summary ................................................ 32
Appendix A: Total Economic Impact ................... 33
Appendix B: Interview And Survey Demographics................................................................................. 34
Appendix C: Endnotes .......................................... 36

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THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

Executive Summary
Supporting hybrid working models improves employee satisfaction, the ability tocollaborate, and productivity.1 However, hybrid work raises a new set of challenges thattraditional, on-premises solutions are ill-equipped to meet. To optimize support of thehybrid working models of the future, organizations must update and consolidate theirtechnology stacks to mitigate security concerns, reduce IT management costs, andeliminate redundant solution spending, allowing them to do more with less.

Microsoft commissioned Forrester Consulting toconduct a Total Economic Impact™ (TEI) study and

KEY BENEFITS

examine the potential return on investment (ROI)
enterprises may realize by deploying Microsoft 365
E3.2 The purpose of this study is to provide readerswith a framework to evaluate the potential financial
impact of Microsoft 365 E3 on their organizations.
This report is a refresh of the original report

Per user licensing savings

commissioned in late 2020. Forrester supplemented

60%

this data set with additional interviews, mainly in

Endpoint deploymentsavings

25%

emerging markets, as well as a global survey.
To better understand the benefits, costs, and risks

moving to the cloud and consolidating theirassociated with this investment, Forrester interviewed

organization’s solution sets would reduce costs, free

15 representatives with experience using Microsoft

up IT resources to focus on more important tasks,

365 E3 over two years and fielded a survey of 79 IT

and improve IT productivity.

representatives of organizations that have users wholeverage Microsoft 365 E3. For this study, Forrester

Figure 1

aggregated the experiences of the interviewees and

Top Drivers For Microsoft 365 E3 Implementation

survey respondents and combined the results into asingle composite organization.
Prior to using Microsoft 365 E3, the majority ofinterviewees’ organizations maintained a hybrid
environment with Microsoft Office (Microsoft 365Apps) and the remainder of their deployments onpremises. These organizations relied on third-party

Reducing costs for new andexisting infrastructure

81%

Reallocation of IT admins orother FTEs

61%

Consolidation or reduction ofsoftware licenses

44%

Quicker disaster recovery

43%

Avoid hires for IT admins orother FTEs

39%

Reduced employee downtime
across organization37%

tools and vendors to provide solutions forcommunication, file sharing, and device management
across their workforces. Management of theseenvironments required IT FTE hours, relationships
with several vendors, and the budget to support
redundant solutions. Decision-makers hoped that

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

1

EXECUTIVE SUMMARY

By moving to Microsoft 365 E3, the interviewed andmanagement tools allows the composite tosurveyed customers were able to retire on-premisestransition employees to a bring-your-own-device

and now-redundant applications, which freed up IT(BYOD) model and retire corporate devices. The

resources and reduced infrastructure and licensing

organization recognizes savings in devices,

costs. The new features and functionality provided bycalling plans, back-office invoicing, and vendor

Microsoft 365 E3 made it easier for IT teams to

management. The composite organization saves

manage their environments, while users gained$40 per user over three years across allaccess to a new suite of solutions that made them

employees ($540 over three years for the 3,000

more effective across office, remote, or hybrid

employees with corporate devices).

working models. From the 2020 interview set to the

Simplified IT Management

2022 interview set, interviewees collectively reported•

that user productivity on Microsoft 365 E3 has

Reduced the time spent deploying andincreased resulting from ascending the learning curve

managing new software by 25%. By

on E3 solutions during the 2020 lockdowns. Usersconnecting applications to Azure AD, enabling

have gained skills that will continue to benefit theirsingle sign-on (SSO) and MFA, theproductivity and collaboration with the hybrid working

composite’s IT team reduces the effort required

models of the future.

to support new software. Deploying software,
managing updates, troubleshooting, andKEY FINDINGS

supporting end users all become much easier

Quantified benefits. Three-year, risk-adjustedwith Microsoft Intune — the unified

present value (PV) quantified benefits for the

management platform that includes

composite organization include:

Configuration Manager.

Cost Savings Through Eliminating Redundant
Solutions••

75%. The low-touch endpoint configuration

Decreased per user licensing spend bycapabilities provided by Windows Autopilot saves

60%, an average of $55 per user per month.

IT administrators at the composite organization

The composite organization consolidates its

significant amounts of time.

solution sets under Microsoft 365 E3. This
enables it to eliminate now-redundant licenses•

Microsoft’s modern application stack, thesharing, endpoint management, email,composite organization is able to fully set up a

storage, mobile device management,user on a new device in a fraction of the time it

identity and access management,

took before. Connecting apps to Azure Active

information encryption and labeling, andDirectory (Azure AD) reduces the extra work IT

endpoint protection platforms (EPP). The

needs to do to set up a user on a new device.

related move to the cloud also reduces
hardware and support fees. The composite

Reduced the time required to set up a user ona new endpoint by 75%. By leveraging

for communication, collaboration, file•

Decreased endpoint configuration times by•

Eliminated 15% of help desk tickets andorganization saves a total of $1,586 in licensing

decreased the average resolution time by

and support costs per user over three years, an

15%. The composite organization reduces annual

average 60% reduction per user.

tickets with self-service options and automated

Reduced spending on employee devices by
23%. Multifactor authentication (MFA) and device

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

fixes for common issues, such as password
resets and software installs. The enhanced
management capabilities offered through2

EXECUTIVE SUMMARY

Microsoft Intune enables IT teams to address•

expressed optimism about improving their

reductions save the composite organization

organizations’ sustainability efforts and carbon

nearly $79 per user over three years.

footprints in the future as a result of reduced
travel.

Supporting And Protecting The Hybrid Workforce•

Improved end user productivity, saving users•

offering, affording the flexibility to scale

composite organization’s end users become

deployment without major investments in support

more productive by combining the

hardware or up-front licensing. Recurring monthly

communication features of Microsoft Teams withcharges also offer a cash flow benefit over up-

the collaboration and document-sharing

front licensing.

capabilities afforded through Microsoft 365 Apps,
Teams, OneDrive, SharePoint, and Azure AD•

organizations experiment with return-to-office,save an average of 72 minutes per week, valued

remote work, or hybrid work initiatives, Microsoft

at $2,248 per user over three years.

365 E3 may help support effective collaborationin any of these models as they continue to evolve

Saved 25% on travel and expenses. The
Teams without affecting quality. By conducting

in the future.
•

Moving to the cloud at the speed of thethese meetings remotely, the organization saves

business. As many organizations including thesubstantial amounts of money on airfare, meals,

composite are at various stages of their cloudinsurance, and other costs.

journeys due to existing dependencies (e.g.,tools, existing contracts, policies) of other

Reduced the risk of a data breach. Microsoft

stakeholders, Microsoft 365 E3 provides the

365 E3 has a number of features that enhanceflexibility to adopt cloud at the organization’s own

organizational security and improve thepace, without disrupting their businesses.

composite organization’s ability to identify,
investigate, and remediate threats. The

Costs. Three-year, risk-adjusted PV costs for thecomposite reduces exposure with granular

composite organization include:

conditional access policies, detailed andintegrated security logs, MFA, and the overall
security of Azure. This reduction in risk is valued
at more than $40 per user over three years.
•

Support of the evolving hybrid workforce. As

SSO. The composite organization’s end users

composited organization shifts onsite meetings to•Transitioning from capex to opex. Microsoft
365 E3 is a pure software-as-a-service (SaaS)

an average of 60 hours per year. The•

Environmental benefits. Interviewees

issues more quickly than before. These•

Initial implementation and planning costs of$3.3 million. The composite organization
dedicates internal resources to migrate existing
applications to the cloud and to implement new

Enhanced security and compatibility benefits

features offered by Microsoft 365 E3. The(unquantified). The components of Microsoft

organization works with a Microsoft partner to365 E3 are designed to work together with on-

create a project roadmap, to assist with thepremises counterparts, reducing the risks of

implementation and migration efforts, and tobusiness disruption and a learning curve for IT.

create adoption and change management

Unquantified benefits. Benefits that provide value
for the composite organization but are not quantified

materials. Microsoft’s FastTrack Center comes at
no additional cost to the composite organization

for this study include:

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

3

EXECUTIVE SUMMARY

providing expert guidance delivered remotely by•Microsoft engineers.
•

composite organization adopts modern endpoint
management principles as part of its E3 rollout.

Microsoft licensing costs of $32.5 million. The

As part of this shift, the organization shortens its

organization pays license fees of $36 per user

device refresh cycle, providing newer devices toper month for its 30,000 E3 users.
•

Ongoing management costs of $5.7 million.
The organization incurs labor costs for internal
resources managing its deployment.

•

Device refresh costs of $1.3 million. The

users more often.
The financial analysis which is based on theinterviews and survey found that a composite
organization experiences benefits of $4,725 per user

End user training costs of $1.2 million. The

over three years versus costs of $46.51M, adding up

organization initially trains its existing users on

to a net present value (NPV) of $95.25 million or

new features and functionality, and it trains new$3,175 per user and an ROI of 205%.

hires annually.
VOICE OF THE CUSTOMERInterviewed customers shared:•“The ability for our employees to work on the same document at the same time has allowed us to finish tasks inminutes, when it normally would take days”—IT manager, manufacturing•“With Intune, it’s a lot easier to maintain a standard build — especially with a largely mobile workforce or a work-fromhome workforce. The amount of automation and the ability to synchronize endpoints is significantly enhanced.”-- CTO, professional services•“Microsoft is an essential partner of our transition to supporting hybrid working models.”— IT manager, manufacturing•“Microsoft 365 gives us 99.9% availability across our solutions to the point where we don’t worry about it anymore. We
couldn’t say the same in our on-premises environment.”— Global CISO, food processing•“Three years ago, we had an entire team dedicated to managing vendors and software licensing contracts for oursolutions. Now, we only have one person who is responsible for that.”—Global CISO, food processing•“[On Microsoft 365 E3] everything is easier. We can accommodate hybrid working models, we can collaborative in realtime, and we use less email. We couldn’t do all of this before.”— IT manager, manufacturing•“Even though we implemented [E3] during the pandemic, we started to realize that there was value to the collaboration
solutions and skills we’d honed supporting the organization in the future.”— Director, Windows and corporate systems, telecommunications•“Microsoft
is one ofmostcompanies are in the world. Not only do we feel more secure with them, but
weTHE TOTAL ECONOMIC
IMPACT™
OFinnovative
MICROSOFT 365 E3
4know that if there is some new security threat or technological trend, Microsoft is going to be there.”— Global CISO, food processing

EXECUTIVE SUMMARYROI

BENEFITS PV

NPVPAYBACK

205%$4,725
per user$3,175
per user<3monthsBenefits (Three-Year)
Vendor consolidation savings$47.6M

End user device savings$1.2M

Endpoint deployment andmanagement time savings$15.0MIT administration and help desk

$2.4M

End user productivity improvements$67.5M

Reduced travel and expense$6.9M

Reduced risk of a data breach$1.2M

End users are 3% more productive with
Teams, OneDrive, SharePoint, andMicrosoft 365 apps.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

5

EXECUTIVE SUMMARYTEI FRAMEWORK AND METHODOLOGY
From the information provided in the interviews andsurvey, Forrester constructed a Total Economic
Impact™ framework for those organizations

DUE DILIGENCE
Interviewed Microsoft 365 stakeholders andForrester analysts to gather data relative to E3.

considering an investment in E3.
The objective of the framework is to identify the cost,investment decision. Forrester took a multistep

INTERVIEWS AND SURVEY
Interviewed 15 representatives and surveyed 79

approach to evaluate the impact that E3 can have on

respondents at organizations using E3 to obtainan organization.

data with respect to costs, benefits, and risks.

benefit, flexibility, and risk factors that affect theForrester Consulting conducted an online survey of
351 cybersecurity leaders at global enterprises in theSurvey participants included managers, directors,

COMPOSITE ORGANIZATION
Designed a composite organization based on

VPs, and C-level executives who are responsible forcharacteristics of the interviewees and survey

cybersecurity decision-making, operations, andrespondents.

US, the UK, Canada, Germany, and Australia.

reporting. Questions provided to the participants
sought to evaluate leaders’ cybersecurity strategies
and any breaches that have occurred within theirorganizations. Respondents opted into the survey via
a third-party research panel, which fielded the survey
on behalf of Forrester in November 2020.

FINANCIAL MODEL FRAMEWORK
Constructed a financial model representative of
the interviews and survey using the TEI
methodology and risk-adjusted the financial
model based on issues and concerns of theinterviewees and survey respondents.

DISCLOSURES
Readers should be aware of the following:This study is commissioned by Microsoft 365 anddelivered by Forrester Consulting. It is not meant to be
used as a competitive analysis.

CASE STUDY
Employed four fundamental elements of TEI inmodeling the investment impact: benefits, costs,
flexibility, and risks. Given the increasing

Forrester makes no assumptions as to the potential ROI
that other organizations will receive. Forrester strongly
advises that readers use their own estimates within theframework provided in the study to determine theappropriateness of an investment in E3.

sophistication of ROI analyses related to IT

Microsoft 365 reviewed and provided feedback to
Forrester, but Forrester maintains editorial control overthe study and its findings and does not accept changes tothe study that contradict Forrester’s findings or obscure
the meaning of the study.

see Appendix A for additional information on theinvestments, Forrester’s TEI methodology
provides a complete picture of the total
economic impact of purchase decisions. Please

TEI methodology.

Microsoft 365 provided the customer names for theinterviews but did not participate in the interviews.
Forrester fielded the double-blind survey using a thirdparty survey partner.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

6The Microsoft 365 E3 Customer Journey
Drivers leading to the E3 investment

KEY CHALLENGES•

Supporting a hybrid workforce. In 2022, many
interviewees noted that their organization is

Forrester interviewed 15 representatives andtransitioning to a hybrid work model (e.g., officesurveyed 79 respondents with experience using E3 atand remote), which poses unique opportunities

their organizations. For more details on thesefor solution optimization to support seamless

individuals and the organizations they represent, seecollaboration across colleagues near and far.

Appendix B.

Twenty-two percent of survey respondents said

Both interviewees and survey respondents noted how

they expect the number of employees working

their organizations struggled with common

remotely to increase in the coming years.

challenges, including:•Figure 2

Legacy solutions were expensive to maintain

Percentage Of Survey Respondents Who Saidand cumbersome. Legacy on-premises

Their Organization’s Employees Work Fully

solutions were expensive to maintain, both from

Remotely 3 Or More Days Per Week

infrastructure and personnel perspectives.
Redundant, patchwork sets of solutions andNoneapplications across several areas of software<10%

drove up costs, increased complexity, andreduced standardization across functional areas•

10%of the organizations.

10% to <15%

The prevalence of “shadow IT.” Interviewees

15% to <25%

said departments within their organizations often

25% to <50%

27%
23%
20%

14%

purchased solutions to meet the specific needs of

50% to less than 75%

the departments without informing IT. This6%

exposed the organizations to security risks andfurther increased the cost of redundant tools.
•••

Security concerns inherent to a hybrid

Suboptimal productivity. End users had hit theworkforce. With the majority of thelimits of productivity with their existing toolsets.

organizations’ employees working remotely at

Many demanded better tools, and theirleast part of their working time, risks associatedorganizations sought a means to enhancewith increased mobility such as suspect network

collaboration and improve productivity.

access, lost and/or stolen devices, and threats

Expensive and aging infrastructure. Some offrom bad actors become more pronounced.

the interviewees’ organizations were nearing end

Solutions that both protect the employees fromof life with their existing on-premises

these risks and mitigate the damage associatedinfrastructure supporting legacy tools. At thiswith any breaches are top of mind for IT teams at

inflection point, interviewees reported taking thethe interviewees’ organizations.

opportunity to standardize tools and migrate tocloud solutions where available.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

7

THE MICROSOFT 365 E3 CUSTOMER JOURNEYINVESTMENT OBJECTIVES

Deployment characteristics. The organization

The interviewees’ and survey respondents’

deploys the full suite of Microsoft 365 E3 solutionsorganizations searched for a solution that could:

and recognizes benefits over their previous solutions•

from each of the E3 capabilities.
Replace patchwork solutions with a single,
easy-to-use product suite across a hybrid
workforce.

•

Recognize cost savings and IT efficiencies by
being on the cloud.

•Provide employees with robust collaboration
tools to enhance both in-person and remote
work.

•

Provide employees with the ability to accessapplications and files anywhere.

•

Consolidate license spending.

•Enable a BYOD work environment.

•

Improve security.

COMPOSITE ORGANIZATION
Based on the interviews and survey, Forrester
constructed a TEI framework, a composite company,

Key Assumptions• 30,000 Microsoft 365 E3
users• $125,000 average IT
worker salary• $70,000 averageknowledge worker salary• 10% of workforce isremote with a corporate
device and multiple
Microsoft licenses• $25 million annual travel
and expense budget

and an ROI analysis that illustrates the areas
financially affected. The composite organization isrepresentative of the 15 interviewees and the 79
survey respondents, and it is used to present theaggregate financial analysis in the next section. The
composite organization has the following
characteristics:
Description of composite. The organization isbased in the United States, and it has global
operations. It employs 30,000 users with Microsoft
365 licenses. Prior to using Microsoft 365 E3, theorganization had a hybrid deployment with Microsoft
Office in the cloud and the rest of its applications onpremises. It also used numerous third-party chat andvideo applications, file-sharing services, and basic
antivirus and mobile device management tools.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

8THE MICROSOFT 365 E3 CUSTOMER JOURNEY

Figure 3
Breakdown Of Microsoft 365 E3 Solutions In Wide
Usage At Survey Respondents’ Organizations

Office applications (e.g. Word, Excel,
PowerPoint, OneNote)94%

Email and calendar and archiving (Outlook,
Exchange)

94%

Information protection & eDiscovery (Office 365
DLP, Windows Information Protection,…

65%

Meetings, chat, and collaboration

59%

Identity & access management (Azure Active
Directory P1, Windows Hello, Credential Guard)

54%

Device and app management (Microsoft
Endpoint Manager)

51%

Browser and search engine (Bing, Edge)

47%

Analytics (Delve, MyAnalytics Viva Insights, Viva
Connections, Viva Learning)

47%

Voice, video & meetings (Microsoft Teams,
Teams with dial out to USA/Canada)

46%

Threat protection (Microsoft Advanced Threat
Analytics, Windows Defender for Endpoint P1,…

44%

Social & intranet (SharePoint, Yammer)

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

33%9THE MICROSOFT 365 E3 CUSTOMER JOURNEY

Deployed Capabilities And Solutions Of Composite
Capability

Solution(s)•Windows 11 Enterprise•Word, Excel, PowerPoint, OneNote, Publisher (PC only), and Access (PC only)) on up to 5
PCs/Macs, 5 tablets, and 5 mobile devices per person.

Email and calendar•

Exchange

Social and intranet••

SharePoint
YammerMeetings, voice, andcollaboration

•

Teams

Files and content•••

OneDrive for Business
Microsoft Stream
Sway for Office 365

Business apps•••

Microsoft Forms
To Do
Planner

Power platform••

Power Apps for Office 365
Power Automate for Office 365

Device and app management

•
•
•
•
•
•
•

Microsoft 365 Administration
Microsoft Intune
Microsoft Endpoint Configuration Manager
Windows Autopilot
Fine-tuned user experience
Windows Analytics Device Health
Mobile Device Management for Office 365

Security

•
•
•
•
•
•
•

Windows Hello
Credential Guard and Direct Access
BitLocker
Microsoft Defender Antivirus and Device Guard
Azure Active Directory Plan 1
Microsoft Advanced Threat Analytics
Microsoft Information Protection Plan 1

Compliance

•
•
•
•
•
•
•
•
•

eDiscovery content search
Manual sensitivity and retention labels
Office 365 Data Loss Prevention for email and files
eDiscovery Export
eDiscovery Hold
Litigation Hold
In-Place Hold
Basic audit
Email archiving

Analytics••

Viva Insights
Delve

Operating system
Microsoft 365 apps

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

10Analysis Of Benefits
Quantified benefit data as applied to the composite

Total Benefits
Ref.

Year 1

Year 2

Year 3

Total

Present
Value$19,134,900$19,134,900$19,134,900$57,404,700$47,585,664$486,000$486,000$486,000$1,458,000$1,208,610$5,939,784$6,058,579$6,179,751$18,178,114$15,049,832$949,050$949,050$949,050$2,847,150$2,360,147

BenefitCost Consolidation Savings
Atr

Vendor consolidation savings

Btr

End user device savings

Simplified IT Management
Ctr

Endpoint deployment andmanagement time savings

Dtr

IT administration and help desksavings

Supporting the hybrid workforce
Etr

End user productivity
improvements$26,275,392$27,173,135$28,096,277$81,544,803$67,453,005

Ftr

Reduced travel and expense$2,250,000$2,812,500$3,375,000$8,437,500$6,905,522

Gtr

Reduced risk of a data breach$484,327$484,327$484,327$1,452,981$1,204,449$55,519,453$57,098,491$58,705,304$171,323,248$141,767,229

Total benefits (risk-adjusted)a 2021 acquisition by a larger organization, their

VENDOR CONSOLIDATION SAVINGS

company saw a 70% decrease in solutions costs

Evidence and data. By replacing aging andacross its Microsoft 365 users after transitioning

patchwork tools under Microsoft, the interviewees’

to E3.

organizations reduced their per-user license spend
and support costs. The composite organization•

A global CISO of a food processing organization

eliminates nearly of $37 per user on third-party

said by transitioning to cloud solutions across thelicensing and an additional $18 per user in on-

Microsoft 365 E3 offering, their company no

premises hardware and software costs related tolonger needs to make significant infrastructure

supporting legacy solutions.

investments every five years to support legacy•

solutions. This lowers organizational IT costs

Interviewees said their organizations were using

tremendously.

as many as three separate communication andchat applications in addition to email.
•A director of Windows and corporate systems at
a telecommunications organization said that amid

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3•

The IT manager at a manufacturing organization
noted that their company saw hardware andlicense savings associated with collaboration

11

ANALYSIS OF BENEFITS

solutions replaced by Microsoft Teams on
Microsoft 365 E3. In addition, users were unable“We had people using a
combination of web-only apps
and then doing one-offpurchases for desktop when
they wanted that, too. And then,at a team level, we had different
departments using different chator video applications. We
decided it was far easier to justhave everyone on a level
platform.”to access legacy collaboration without VPN
access, which was not always possible in a
hybrid work model.
•

The surveyed IT decision-makers said theirorganizations saw significant licensing andinfrastructure cost savings attributed to adopting
Microsoft 365 E3 solutions.

•

In addition to avoided expenditure, intervieweescited a reduction in hardware maintenance costs
across infrastructure supporting end user
applications. Forty-two percent of the survey
respondents indicated that their organization
saves between 10% and 25% of its total

Head of IT, biotechnology

infrastructure maintenance expenditure
attributable to the Microsoft 365 E3
implementation. Interviewees and respondents
also indicated a reduction in costs from powerand cooling (73%), and cloud hosting costs for•sync license cost is $13.75. It replaces thislegacy cloud solutions (90%).
•

Microsoft 365 E3 includes Microsoft 365 Apps,
which includes the ability to install Office

functionality with OneDrive and SharePoint.
•

average enterprise price being $14.40. Microsoft

five smartphones per user.

following about the composite organization:•

Teams replaces these applications.
•

The composite saves $18 (rounded per user) in
hardware and software related to on-premises

The composite organization eliminates nearly

tools, as well as in cloud hosting costs for now-

$37 per user on third-party licensing (email,redundant cloud solutions.

collaboration, productivity, identity solutions etc.)
through capabilities gained on Microsoft 365 E3
and an additional $18 per user in on-premises
hardware and software costs related tosupporting legacy solutions.
•

The composite previously used a number ofdifferent chat and video applications, with theapplications on up to five PCs, five tablets, andModeling and assumptions. Forrester assumes the

The composite’s average per-user monthly file•

The composite’s previous on-premises licenses
did not come with the same install functionality as
Microsoft 365 E3 apps, which leads it topurchase additional licenses for a portion of its
workforce, like sales representatives who

The composite’s average per-user monthly

possess multiple work devices. By moving to 365

security tools licensing savings are $8.80. It

E3, the composite eliminates this redundantprimarily replaces existing mobile device

licensing for the 10% of its workforce that it

management (MDM) solutions.

applies to. Legacy licenses are valued at $12 peruser.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

12

ANALYSIS OF BENEFITS

Risks. Forrester recognizes that vendor license•

The breakdown of on-premises versus cloudconsolidation savings may vary from organization tosolutions now redundant with Microsoft 365 E3

organization. Specific considerations include:

as it relates to potential avoided costs.

••

Existing legacy solutions and average cost. This

Results. To account for these risks, Forrester

may be impacted by organization size and theadjusted this benefit downward by 5%, yielding aability to negotiate discounts.

three-year, risk-adjusted total PV (discounted at 10%)

Industry and workforce makeup, which will dictateof $47.5 million.

the likelihood of knowledge workers requiring
multiple legacy Microsoft licenses.

Vendor Consolidation Savings
Ref.

MetricSourceYear 1

Year 2

Year 3

A1

Number of users

Composite

30,00030,00030,000A2

Per user monthly security tools license
cost

Interviews

$8.80

$8.80

$8.80

A3

Per user monthly file sync license cost

Interviews$13.75$13.75$13.75A4

Per user monthly communications tools
license cost

Interviews$14.40$14.40$14.40A5

Thid-party vendor license consolidation

A1*(A2+A3+A4)*1 2$13,302,000$13,302,000$13,302,000A6Per user monthly on-premises and cloud
hosting costs (hardware and software)Interviews

$18

$18

$18

A7

Redundant license savings(A1*10%)*$10*12$360,000$360,000$360,000

At

Vendor consolidation savings

A5+(A6*A1*12)+A 7$20,142,000$20,142,000$20,142,000

Risk adjustment↓5%$19,134,900$19,134,900$19,134,900

Atr

Vendor consolidation savings (riskadjusted)
Three-year total: $57,404,700

Three-year present value: $47,585,664

END USER DEVICE SAVINGS

data and enforce policies to keep data protected.

Evidence and data. Microsoft 365 E3 provided theInterviewees said MFA for Microsoft 365 isinterviewees’ companies with the security andparticularly useful in reducing end user risk, andmanagement tools they needed to feel confident in ait’s a primary element in allowing employees to

BYOD environment. Giving employees the choice to

use their own devices.

use their own devices increased mobile productivity•

Prior to having Microsoft 365 E3, theand reduced corporate expenditures on hardware,interviewees’ organizations were limited in how

device plans, and back-office labor.

many devices on which they could install their•

With Microsoft Intune, MFA, Azure Active

Microsoft 365 applications. A Microsoft 365 E3

Directory, and Conditional Access, organizations

license includes installs on up to five PCs,

can manage applications that contain corporate

tablets, and smartphones. This allows end users

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

13

ANALYSIS OF BENEFITS•

to have a seamless and secured BYOD
experience without the additional cost of
acquiring and integrating disparate licenses andtools.
•

reimburses users $50 per month.
Risks. End user device savings may vary, andspecific considerations include:

The global CISO of a food processing company
noted that Microsoft Intune helps their•and corporate-owned devices within its
environments.
A chief partner with a retailer estimated a 30%
operational cost reduction including corporateowned devices resulting from their organization’s
E3 implementation.

The percentage of workforce-issued corporate
devices.

organization maintain consistency across BYOD•

As part of its BYOD plan, the organization•

The corporate BYOD reimbursement plan.

•

The organization’s security posture andwillingness to adopt BYOD.

Results. To account for these risks, Forrester
adjusted this benefit downward by 10%, yielding athree-year, risk-adjusted total PV of $1.2 million.

Modeling and assumptions. Forrester assumes thefollowing about the composite organization:•

10% of the workforce has a preexisting
corporate device and mobile plan. This
primarily includes salespeople, managers, andother mobile workers.

•

Prior to enabling BYOD, the organization spent$65 per user per month on corporate mobile

Monthly corporate device
savings$15 per user

devices, including hardware, phone and dataplans, and back-office administration.

End User Device Savings
Ref.

MetricSourceYear 1

Year 2

Year 3

B1

Number of users with corporate devices

B1*10%

3,000

3,000

3,000

B2

Per-employee monthly plan and device
costInterviews

$65

$65

$65

B3

Per-employee monthly BYOD
reimbursement

Composite

$50

$50

$50

B4

Per-employee monthly savings

B2-B3

$15

$15

$15

Bt

End user device savings

B1*B4*12$540,000$540,000$540,000

Risk adjustment↓10%$486,000$486,000$486,000

Btr

End user device savings (risk-adjusted)
Three-year total: $1,458,000

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

Three-year present value: $1,208,610

14

ANALYSIS OF BENEFITS

ENDPOINT DEPLOYMENT AND MANAGEMENT

resources required to support legacy email

TIME SAVINGS

servers, collaboration solutions, and file sharing
solutions. More than five IT FTEs have been

Evidence and data. Microsoft 365 E3 includes

repurposed into other areas of IT as theMicrosoft Intune, a unified endpoint management tool

personnel requirement to manage these solutions

for organizations to deploy, manage, and secure allhas decreased by more than 75% on Microsoftof their corporate-owned and BYOD devices.

365 E3.

Microsoft Intune includes Configuration Manager.
With Microsoft Intune, interviewees said their•

The director of Windows and corporate systems

organizations easily deploy and manage newat a telecommunications company said that bysoftware, security updates, and operating systems to

reducing the burden on IT personnel to deploy

managed devices. And with Windows Autopilot, theirand manage endpoints, their organization’s IT

organizations can procure, preconfigure, sand ship

personnel who are no longer required for these

Windows devices that are enterprise-ready and fullytasks are tackling higher-value IT initiatives, suchsecure from their OEM or reseller partner directly toas upskilling for the organization’s greater cloudthe end user.

transformation goals. Before the Microsoft 365•

E3 implementation, additional IT personnel andConnecting applications with Azure AD, enabling

skills were required for these tasks and, in some

SSO and MFA, and migrating their files tocases, there was simply no time for in-house

SharePoint enabled end users to get up andpersonnel to develop these skills. Since

running on new devices much faster than they

implementation, the organization has reallocatedcould before, reducing the frequency of additional

five IT personnel to these higher-value tasks.

support tickets. Meanwhile, Conditional Accessand the configuration capabilities within Microsoft••

Ninety-seven percent of survey respondents

Intune reduced the extra configuration work IT

reported efficiency gains for IT personnel specificadministrators had to perform to address

to deploying endpoint updates, while 74%

department or user-specific needs.

indicated greater than 10% efficiency gains

Interviewees said their organizations reduced theresources required to manage and support

across the IT organization related to training
costs.

updates across solutions. The chief partner at theretailer told Forrester that updates across users’
solutions that would typically take months (and IT
personnel resources) can now be managed
almost instantaneously.
•

Interviewees said their organizations recognizedtime savings regardless of device, noting theease of managing a myriad of mobile devices,PCs, and Macs. For most of the interviewees’
and survey respondents’ organizations, this is
now fully automated with Microsoft 365 E3.

•

The global CISO of a food processingorganization described a significant shift of FTE

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

15

ANALYSIS OF BENEFITS

Figure 4

updates to end users. These tools save

Detailed Breakdown Of Areas Of IT Time Savings

administrators 25% of their time managing new
software.

Reduced IT time spent on
ongoing workload
administration

61%•

One-third of employees require a new endpoint
configuration annually, which averages 1 hour ofrequired labor. With Microsoft 365 E3, this time is

Reduced IT training costs

reduced by 75%.

54%•

Prior to deploying Microsoft 365 E3, the average
required time for a new laptop setup was 6 hours

Faster helpdesk ticket
resolution

48%

for both IT and end users. With Microsoft 365 E3,
this time is reduced by 90%.

Reduced IT time spent
deploying Windows andother updates

44%•

The composite organization pays its IT resources$120,000 annually with 2% annual increases due
to inflation.

Reduced IT support time(including device support)

41%•

The average end user salary is $73,000 annuallywith 2% inflation.

Decrease in the number of
helpdesk tickets submitted
We did not experience any
internal IT employee timesavings

34%

Risks. Forrester recognizes that IT software
deployment savings may vary from organization toorganization. Specific considerations include:

4%•

Benchmark effort required for management anddeployment.

•

End user specifics as it relates to baseline

Modeling and assumptions. Forrester assumes the

deployment and update effort required for IT

following about the composite organization:

personnel.

•

On legacy solutions, the composite organization•

IT salaries.

spent an average of 0.55 hours per user
managing new software. Admins spent anadditional 0.68 hours on user support related to

Results. To account for these risks, Forrester

new software, and they spent 0.32 hours

adjusted this benefit downward by 5%, yielding a

troubleshooting during updates. Furthermore,

three-year, risk-adjusted total PV of $15 million.

admins spent 0.32 hours per user on general IT.
In total, IT spent 1.87 hours per user per year.
•

Administrators use Microsoft Intune to manage
the configuration and deployment of software and

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

16

ANALYSIS OF BENEFITS

Endpoint Deployment And Management Time Savings
Ref.

MetricSourceYear 1

Year 2

Year 3

C1

Hours dedicated to new software
deployment and management

A1*1.87

56,10056,10056,100C2

Reduction due to efficiency gains
provided by M365 E3Interviews and2022 survey data

25%

25%

25%

C3

Hours reallocated from software
management

C1*C2

14,025

14,025

14,025

C4

Hours spent configuring new
endpoints

A1/3*1 hour

10,00010,00010,000C5Reduced endpoint configuration
due to M365

Interviews

7,500

7,500

7,500

C6

Time required to setup a user on a
new laptop before M365

Interviews

6

6

6

C7

IT end user setup time savings

C4*C6*90%

54,00054,00054,000C8

End user setup time savings

C4*C6*90%

54,00054,00054,000C9

IT salary

Assumption$120,000$122,400$124,848

C10

End user salary

Assumption$73,000$74,460$75,949

C11

Total IT time savings(C3+C5+C7)/2080*C94,357,211.54

4,444,355.77

4,533,242.88

C12

End user savings

Composite

1,895,192.31

1,933,096.15

1,971,758.08

Ct

Endpoint deployment andmanagement time savings$6,252,404$6,377,452$6,505,001$5,939,784$6,058,579$6,179,751

Risk adjustment
Ctr

↓5%

Endpoint deployment andmanagement time savings (riskadjusted)
Three-year total: $18,178,114

IT ADMINISTRATION AND HELP DESK
Evidence and data. Interviewees and survey
respondents highlighted the potential for reduction in

Three-year present value: $15,049,832

ecosystem of devices (e.g., mobile, PC, Mac) with
Microsoft Intune.
•

Interviewees stated that having Microsoft 365 E3

help desk calls and shortened ticket resolution times

deployed as a SaaS offering allowed theirafter implementing Microsoft 365 E3. Factors

organizations to easily ensure users were up to

influencing the reduction in ticket volume include thedate on updates and able to stay current on

ability to build robust corporate intranets with

upgrades. Having users on a consistent andSharePoint, providing solutions to common problems

current platform further reduced IT administration

for users to help themselves, self-service password

time. Interviewees also noted that E3 allowed

resets, and Microsoft Teams bots that quickly provide

their organizations to reduce the number oflinks to resources when prompted. Furthermore,customizations across their solutions, bothinterviewees said their organizations’ IT personnel

reducing the potential for issues and shortening

found it much easier to resolve issues for a diverse

resolution time for any that may arise.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

17

ANALYSIS OF BENEFITS•

The 79 surveyed IT decision-makers said helpdesk ticket volume attributable to legacy solutions

Reduction in help deskticket volume

replaced by Microsoft 365 E3 functionality was
reduced by an average of 25.8%. Sixty-seven15%

percent indicated that their organization’s helpdesk personnel reclaimed more than 10% of theirworking hours, while nearly 10% of theirorganizations’ help-desk personnel reclaimed
nearly 50% of their working hours, inherently
reducing the need for additional hires.
•

A global CISO of a food processing company

Modeling and assumptions. Forrester assumes thesaid their organization realized a 20% reduction

following about the composite organization:in help desk tickets attributable to implementation••

Each user makes an average of six help deskof Microsoft 365 E3.

calls a year, and 15% of those calls are about

Of the tickets that were submitted on Microsoft

issues fixed through self-service tools.

365 E3, resolution time across the surveyed IT•

Non-self-service issues are less time-consuming

decision makers was reported to be significantly

on SaaS deployments. This, in addition to using

improved.

tools like Intune, allows the help desk to resolve
tickets 15% faster.

Figure 5
Resolution Times With Microsoft 365 E3<5% decrease in
resolution time•

desk labor and end user productivity.

11%

Risks. IT administration and help desk savings may

5% to <10% decrease

vary, and specific considerations include:

24%

10% to <15% decrease

32%

15% to <20% decrease•

Preexistence of self-service tools.

•

The baseline skill and capacity of anorganization’s end users as it relates to their

21%

20% to <25% decrease
25% to less than 50%
decrease

The average help desk call costs $20 in help-

11%

ability to self-service.
•

Baseline IT productivity.

Results. To account for these risks, Forrester
3%

adjusted this benefit downward by 5%, yielding athree-year, risk-adjusted total PV of $2.4 million.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

18

ANALYSIS OF BENEFITSIT Administration And Help Desk
Ref.

MetricSourceYear 1

Year 2

Year 3

D1

Annual help desk calls

A1*6

180,000

180,000

180,000

D2

Percent of calls eliminated with
automation

Interviews andsurvey

15%

15%

15%

D3

Reduction in ticket resolution time forremaining tickets

Interviews andsurvey

15%

15%

15%

D4

Average cost per call

Assumption

$20

$20

$20

Dt

IT administration and help desk

(D1*D2*D4)+((D1*(1-D2)*D3*D4$999,000$999,000$999,000

Risk adjustment↓5%$949,050$949,050$949,050

Dtr

IT administration and help desk (riskadjusted)
Three-year total: $2,847,150

Three-year present value: $2,360,147

communication among their organization’s teams

END USER PRODUCTIVITY IMPROVEMENTS

distributed throughout the region.

Evidence and data. Microsoft 365 E3 includes awide range of integrated collaboration and•Prior to having Teams, users and business units

communication solutions to improve end user

within the interviewees’ organizations often

efficiency across a variety of common tasks required

leveraged different chat applications, which

for collaboration in a hybrid work environment.

fostered communications silos and hinderedInterviewees and survey respondents highlighted thecross-team collaboration. Having entire

importance of the ability of their organizations’ usersorganizations on a single communication platform

to communicate and collaborate anytime, anywhere,

ensures consistency in communication andand in a secure manner.

collaboration approaches.

•Interviewees spoke to the importance of•Interviewees said faster boot times, fewer

Microsoft Teams on their organizations’crashes, and faster performance of the devices

enterprise collaboration effectiveness since its

managed by Microsoft 365 E3 enabled users to

implementation. Workflows across in-office andbe more productive than they were with theirremote employees can be completed regardlessprevious devices.

of the users’ locations on any given day. An IT
manager at a manufacturing organization with
operations heavily distributed across SouthAmerica noted that users can seamlesslycollaborate on key tasks and projects without any
geographic limitations. The chief partner of an
Asia Pacific-based retailer told Forrester that
Microsoft Teams has greatly facilitated

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3•

Collaborative document sharing was also a major
productivity booster for the interviewees’organizations. Using Microsoft 365 Apps with
OneDrive and SharePoint, multiple users could
work simultaneously on important documents, allwhile ensuring strict version control. Work groups
created channels for enhanced document andknowledge sharing. The chief partner at the19

ANALYSIS OF BENEFITS

retailer estimated a 70% productivity•

Survey respondents reported the following end-

improvement for their organizations’ users inuser productivity improvements related to theirtasks related to locating, accessing, and sharingorganization’s Microsoft 365 E3 implementation:

key files on SharePoint and OneDrive. This wasvery consistent with the 2020 interview insights,▪

related business disruption. Forty-one

as one CTO at a professional services firm

percent of respondents indicated a

indicated a similar level of impact for theirgreater than 5% downtime improvement

organization’s users.
•and 32% reported a greater than 10%

User productivity was not limited to internal work.

downtime improvement for theirInterviewees highlighted the ability to createorganization’s users.

groups within Teams and include outside vendors
or clients. The chief partner at the retailer▪

cost savings of greater than 10% for all

Microsoft Teams to communicate and collaborate

incidents from faster disaster recovery

with business partners around the world.
Microsoft 365 E3 provided end users withproductivity benefits outside of collaborative
tools. With Azure Active Directory, users
experienced seamless single sign-on from any
device or location. Azure Active Directory has
more than 3,000 Microsoft and third-party SaaS
applications preintegrated, and it allows
organizations to configure them for single sign-on
with just a few clicks.
•

Interviewees highlighted the stability of Windows
11 and indicated that platform consistency acrosstheir whole organizations improved stability,

Improved speed of disaster recovery.
Sixty-five percent of respondents reported

specifically highlighted the ability to leverage•

Reduction of solution downtime-efforts attributable to Microsoft 365 E3.
▪

Other user productivity improvements.
See below chart for detailed breakdowns
from survey.

Figure 6
Productivity Improvements With 365 E3

Improved collaboration withother members of organization

68%

AI tools (e.g. Word Editor, etc.)
help users work more
efficiently

65%

reduced the potential for security vulnerabilities,
and ultimately reduced the downtime send users
experienced.
•

Ability for people to executetasks more quickly

54%

More efficiency when utilizing
mobile access

52%

Ability for people to conduct a
wider variety of tasks moreeasily49%

Interviewees said their organizations average an
end user productivity improvement of 3% withfully integrated, cloud-based chat and file sharing
solutions. This amounts to a weekly savings of 62
minutes per worker. From the 2020 interviews to
the 2022 interviews and survey, respondents
indicated an improvement to end user
productivity on Microsoft 365 E3 solutions as
more users become accustomed to using thesetools across their workstreams in an increasingly
hybrid environment.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

Improved access for thosewith disabilities due toaccessibility features across E3

38%

20

ANALYSIS OF BENEFITS“It takes [users] one-fifth lesstime to get the same job done
because they’re not exchanging
documents via email or having
update and version control
issues.”

Improved user efficiency
with collaborative
document sharing and chat3%

3%

CTO, professional services
Risks. End user productivity improvements may vary,and specific considerations include:
Modeling and assumptions. Forrester assumes thefollowing about the composite organization:••

The number of users and average labor rates.

•

The skill and capacity of an organization’s end
users to learn and take advantage of E3

Based on the interviews, the composite

solutions in their daily workflows.

organizations average an end user productivity
improvement of 3% with fully integrated, cloud-•management barriers.

based chat and file sharing solutions. This
amounts to a weekly savings of 62-64 minutes
per worker in years one to three respectively.
•

Seamless single sign-on saves the composite’s
end users 10 minutes per week.

•

The average knowledge worker using cloud-

Cultural and organizational change•

Preexisting solutions and benchmark
productivity.

Results. To account for these risks, Forrester
adjusted this benefit downward by 20%, yielding athree-year, risk-adjusted total PV of $67.5 million.

based chat and file sharing solutions has a fully
loaded salary of $73,000, which grows at 2%
each year.
•

A 50% productivity capture rate is included since
not all-time savings translate into additional
value-add work.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

21

ANALYSIS OF BENEFITSEnd User Productivity Improvements
Ref.

MetricSourceYear 1

Year 2

Year 3E1

End users

A1

30,00030,00030,000

E2

Improved efficiency with collaborative
document sharing and chat (in weekly
minutes)Composite

62

63

64

E3

Weekly time savings from Azure AD SSO(weekly minutes)

Interviews

10

10

10

E4

Annual efficiency gain per user (in hours)((E2+E3)/60) *52
weeks

62.40

63.27

64.13

E5

Average hourly knowledge worker rate($73k with 2%
inflation)/2080$35.09$35.79$36.51

E6

Productivity recapture

Assumption

50%

50%

50%

Et

End user productivity improvements

E1*E4*E5*E6$32,844,240$33,966,418$35,120,346

Risk adjustment↓20%$26,275,392$27,173,135$28,096,277

Etr

End user productivity improvements (riskadjusted)
Three-year total: $81,544,802

Three-year present value: $67,453,005

including transportation expense, printing of

REDUCED TRAVEL EXPENSE

physical materials, and the expense of venues

Evidence and data. As hybrid work becomes thehosting the events themselves and lodging for

new normal across many types of organizations, thepersonnel. The interviewee also attributed acollaboration benefits delivered by Microsoft 365 E3

wider attendance of their organization’s events tocontinue to support a reduced requirement business-

its ability to host remotely.

related travel to and from meetings, as decisionmakers have seen how their respective organizations•

Interviewees highlighted the environmental

can conduct many meetings remotely without any

sustainability benefits associated with reducing

loss in productivity.

travel. A senior systems developer at an•

Several interviewees said their organizations lookto the features of Microsoft Teams to reduce
travel where possible. A restaurant SVP of global
technology explained: “We have a mandate to
reduce our travel spending by 5% to 10%.
[Microsoft Teams] has been amazing because it’senabled us to drive down our travel costs without
investing in additional tools or infrastructure.”•

automotive organization stated: “We’ve reduced
our travel [thanks to Teams], which is good froman environmental point of view. This is possible
because the features in [Teams] make it easierfor our users to collaborate remotely.” In addition,
88% of the interviewed IT decision-makers
indicated sustainability benefits related to theMicrosoft 365 E3 deployment.

The IT manager with a manufacturingorganization told Forrester that their company
has offset many of the costs associated with inperson client meetings and conferences,

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

22

ANALYSIS OF BENEFITS•

Figure 7

The composite sees a 25% reduction of travel

Sustainability Benefits Related To Microsoft 365

expense through reduced internal and regional

E3

meetings, fewer in-person sales appointments,and fewer in-person conferences.

Financial savings for yourorganization directly due toreduced travel61%•

Not all travel savings are attributable to Microsoft
365 E3. As such, Forrester applied a 40%
attribution factor in Year 1, increasing to 60% inYear 3.

Decrease in the size of yourfootprint through thetransition to cloud with E3

48%

No reportable sustainability
benefits

Risks. Travel expense savings will vary based on:•

Location and enterprise size.

•

The organization’s industry and the ability to
conduct work remotely.

9%•

The organization’s workforce makeup andbenchmark travel expenses.

Don't know

Results. To account for these risks, Forrester

3%

adjusted this benefit downward by 10%, yielding athree-year, risk-adjusted total PV of $6.9 million.

Modeling and assumptions. Forrester assumes thefollowing about the composite organization:•

The composite’s annual travel expense budget is$25 million.

Reduced Travel Expense
Ref.

MetricSourceYear 1

Year 2

Year 3

F1

Total travel and expense budget

Composite$25,000,000$25,000,000$25,000,000

F2

Percent reduction due to increased
remote work

Survey andinterview data

25%

25%

25%

F3

Attribution percentage

Survey andinterview data

40%

50%

60%

Ft

Reduced travel and expense

F1*F2*F3$2,500,000$3,125,000$3,750,000

Risk adjustment↓10%$2,250,000$2,812,500$3,375,000

Ftr

Reduced travel and expense (riskadjusted)
Three-year total: $8,437,500

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

Three-year present value: $6,905,522

23

ANALYSIS OF BENEFITS

the manufacturing organization noted that E3 has

REDUCED RISK OF A DATA BREACH

been helpful in maintaining a consistent security

Evidence and data. Each of the interviewees

posture for their company across all users’

highlighted Microsoft’s reputation for providing secure

regions.

solutions as a key part of their organization’s
investment. They said Microsoft 365 E3 provided•

By securing all applications with Azure AD, thetheir organizations with robust access management

interviewees’ organizations were able to: improve

tools, reduced shadow IT, and secured remote work.

visibility; implement password strength rules;•

implement granular access policies to ensure that

Decision-makers gained visibility into what was

employees only had access to the applications

deployed and being used across theirthat they needed; and prevent specific types oforganizations and discovered that users wereattacks from penetrating the network (with MFA)

adopting unsanctioned apps to meet needs —even if a user’s account was compromised.

especially in chat and document sharing.

•

Microsoft 365 E3 provided users with the tools to

Figure 8

meet user needs, giving IT the insights andSecurity Benefits Attributable To Microsoft 365

justification to reduce shadow IT.

E3While streamlining their tool sets under a single,

Improved security formobile apps and BYOD

integrated set of offerings, the interviewees’organizations also streamlined their security

62%

teams to use their time more effectively incombating security threats. The IT manager withLessened overall securityrisks

In a review of Forrester andnotable third-party data
sources, both attackvolume and security breachseverity appear to be risingfor organizations that lackmature, modern security
culture and tooling.3

Forrester’s Total Economic
Impact practice estimatesthat firms are faced with anaverage of 1.8 material
breaches per year with anaverage cost including
3,437 labor hours,$269,550 in direct costs,
and $385,296 in businesslosses.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

56%

Reduced need to hire 3rdparty security resources

46%

Ability to eliminate somesecurity licenses

44%

No reportable security
benefits

1%

Modeling and assumptions. Forrester assumes thefollowing about the composite organization:•

The average cost of a single material data breachis $854,192, based on Forrester consulting data.

24

ANALYSIS OF BENEFITS•

The annualized average number of material data••

The baseline risk of a data breach based on thebreaches at the composite organization is 1.8 perorganization’s security posture prior to its

year.

Microsoft 365 E3 implementation.

By deploying and building security capabilities•

The skill and capacity of the organization’s

around Azure AD and enabling SSO and MFA,

security personnel to improve security posture

the composite organization significantly reduces

and capabilities through the investment in Azure

its risk exposure. This improvement to securityAD.

posture is modeled at 35% annually for thecomposite organization.

Results. To account for these risks, Forrester
adjusted this benefit downward by 10%, yielding a

Risks. Data breach avoidance savings may vary, andthree-year, risk-adjusted total PV of $1.2 million.

specific considerations include:

Reduced Risk Of A Data Breach
Ref.

MetricSourceYear 1

Year 2

Year 3

G1

Number of users

Composite

30,00030,00030,000G2

Average remediation and reporting labor
cost per material breach

Forrester
research$199,346$199,346$199,346

G3

Average costs of response andnotification, fines, damages, compliancecosts, and customer compensation permaterial breach

Forrester
research$269,550$269,550$269,550

G4

Average lost business revenues andadditional costs to acquire customers permaterial breach

Forrester
research$385,296$385,296$385,296

G5

Total estimated cost of a significant
material breach

G2+G3+G4$854,192$854,192$854,192

G6

Average annual incidence of significant
material data breaches

Forrester
research

1.8

1.8

1.8

G7

Annualized cost of data breaches

G5*G6$1,537,546$1,537,546$1,537,546

G8Reduction in likelihood of data breachInterviews

35%

35%

35%

Gt

Reduced risk of a data breach

G4*G5$538,141$538,141$538,141

Risk adjustment↓10%$484,327$484,327$484,327

Gtr

Reduced risk of a data breach (riskadjusted)
Three-year total: $1,452,981•

Three-year present value: $1,204,449

The average cost of a data breach for theorganization given industry, customers, and otherfactors.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

25

ANALYSIS OF BENEFITSUNQUANTIFIED BENEFITSInterviewees and survey respondents mentioned thefollowing additional benefits that their organizations
experienced but were not able to quantify:••

Moving to the cloud at the speed of thebusiness. Many interviewees and respondents’organizations are at various stages of their cloudjourneys due to existing dependencies (e.g.,tools, existing contracts, policies) of other

Additional security enhancements withstakeholders. Microsoft 365 E3 provides the

Windows 11. Windows 11 Enterprise comes withflexibility to adopt cloud while remaining on-

several advanced security features to help

premises in some areas.

organizations combat malware. Organizations
that used Windows 11 security features insteadof third-party point solutions or legacy versions ofWindows experienced improved system resource

Flexibility would also be quantified when evaluated aspart of a specific project (described in more detail in
Appendix A).

usage and device performance•

Transitioning capex to opex. Microsoft E3 is apure SaaS offering, affording the flexibility toscale deployments without major investments insupport hardware or up-front licensing.
Organizations pay a monthly per user fee insteadof paying for an up-front license. They can easily
scale by adding more licenses without investment
in support infrastructure.

FLEXIBILITY
The value of flexibility is unique to each customer.
There are multiple scenarios in which a customer
might implement Microsoft 365 E3 and later realize
additional uses and business opportunities, including:•Supporting the evolving hybrid workforce. As
organizations experiment with return to office,remote work, or hybrid work initiatives,interviewees expressed optimism that Microsoft
365 E3 will help support effective collaboration in
any of these models as they continue to evolve inthe future. The IT manager at the manufacturingorganization summarized these sentiments to
Forrester, noting that although their company isgiving employees a choice to transition to remoteroles or hybrid roles, Microsoft 365 E3 willcontinue to support their organization’s working
models. They said: “Microsoft is an essential
partner of our transition to supporting hybrid
working models.”

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

26

Analysis Of Costs
Quantified cost data as applied to the composite

Total Costs
InitialYear 1

Year 2

Year 3

Total

Present
Value$3,346,875

$0

$0

$0

$3,346,875$3,346,875

Microsoft licensing cost$0

$12,096,000$13,608,000$13,608,000$39,312,000$32,466,536

Jtr

E3 ongoing
management$0$3,248,438$3,297,656$3,347,859$9,893,953$8,193,757

Ktr

End user training$1,105,335$55,267$57,500$58,650$1,276,751$1,247,162

Ltr

Device refresh$1,260,000

$0

$0

$0

$1,260,000$1,260,000

Total costs (riskadjusted)$5,712,210$15,399,704$16,963,156$17,014,509$55,089,579$46,514,330

Ref.

Cost

Htr

Initial planning andimplementation

Itr

INITIAL PLANNING AND IMPLEMENTATIONInterviewees said their organizations incurred several
months’ worth of planning and implementation laborcosts before deploying Microsoft 365 E3. Firms
worked with professional services partners to planand execute their deployments. Those organizations•

The composite organization dedicates 15 FTEs
to implementing Microsoft 365 E3, migrating files
from legacy solutions, and decommissioning
legacy software and hardware. The team
allocates 50% of its time during six months to thisprocess.

coming from legacy on-premises deployments

Risks. Initial planning and implementation costs will

required time and effort to migrate files andvary based on size of deployment and the solution

decommission hardware. The composite has accesscomponents deployed. Organizational agility andto Microsoft FastTrack for Microsoft 365 at nointernal IT capabilities will also impact speed.

additional cost, which provides expert guidance fromMicrosoft engineers and a network of approved
FastTrack Ready Partners at no additional cost.
Modeling and assumptions. Forrester assumes the

Results. To account for these risks, Forrester
adjusted this cost upward by 5%, yielding a threeyear, risk-adjusted total PV (discounted at 10%) of$3.3 million.

following about the composite organization:•

The composite organization engages with aprofessional services firm for three months ofplanning and design.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

27

ANALYSIS OF COSTS

Initial Planning And Implementation
Ref.

MetricSourceInitialH1

FTEs involved in implementation

Composite

15

H2

Average annual salary of FTE

Assumption$125,000

H3

Percent of time dedicated to
implementation (year)

Composite

50%

H4

Professional services

Composite$2,250,000

Ht

Initial planning and implementation(G1*G2*G3) +G4

Risk adjustment

↑5%

Htr

Initial planning and implementation (riskadjusted)

Year 1

Year 2

Year 3$3,187,500

$0

$0

$0

$3,346,875

$0

$0

$0

Three-year total: $3,346,875

Three-year present value: $3,346,875

Results. While Forrester used a standard list price, a

MICROSOFT LICENSING COST
Microsoft 365 E3 is priced as a monthly as-a-service
license per user.

risk adjustment of 5% has been applied to accountfor any regional or inflationary impacts yielding athree-year, risk-adjusted total PV of $32.5 million.

Modeling and assumptions. Forrester assumes thefollowing about the composite organization:•

The composite organization has 30,000 users
and pays a monthly list price of $32 per user inYear 1, moving to list pricing of $36 per user inYear 2 and Year 3.

Microsoft Licensing Cost
Ref.

MetricSource

I1

Number of users

A1

I2

Monthly license cost per user

MicrosoftIt

Microsoft licensing cost

I1*I2

Risk adjustment

↑5%

Itr

Microsoft licensing cost (risk-adjusted)
Three-year total: $39,312,000

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

InitialYear 1

Year 2

Year 330,00030,00030,000

$32

$36

$36

$0

$11,520,000$12,960,000$12,960,000$0$12,096,000$13,608,000$13,608,000

Three-year present value: $32,466,536

28

ANALYSIS OF COSTS•

E3 ONGOING MANAGEMENT

The composite organization engages withprofessional services firms for two months per

Evidence and data. Interviewees said the ongoingyear working on new development andmanagement of Microsoft 365 E3 is significantly lessroadmapping.

labor-intensive than prior legacy solutions, but it stillrequires some administrative support. As a result,

Risks. Ongoing management costs will vary based

their organizations frequently redeployed FTEs

on the number of users and solution components inpreviously assigned to managing theses deploymentsuse.

to other valuable projects, such as security

Results. To account for these risks, Forrester

enhancement and modernization efforts.

adjusted this cost upward by 5%, yielding a three-

Modeling and assumptions. Forrester assumes theyear, risk-adjusted total PV of $8.2 million.

following about the composite organization:•

The composite organization engages 15 FTEs
who spend 75% of their time supporting theMicrosoft 365 E3 suite of products.

E3 Ongoing Management
Ref.

MetricSource

J1

Internal management staff

J2

Year 1

Year 2

Year 3

A1/1,200

25

25

25

Percent of time spend managing E3
deployment

Assumption

75%

75%

75%

J3

Average annual salary of internalmanagement staff

Assumption$125,000$127,500$130,050

J4Internal costs

I1*I2*I3$2,343,750$2,390,625$2,438,438

J5Ongoing professional services

Composite$750,000$750,000$750,000Jt

E3 ongoing management

J4+J5$3,093,750$3,140,625$3,188,438

Risk adjustment↑5%$3,248,438$3,297,656$3,347,859

Jtr

InitialE3 ongoing management (risk-adjusted)$0

Three-year total: $9,893,953

END USER TRAINING
Evidence and data. While the interviewees said theirThree-year present value: $8,193,757

learning like webinars instead of offering formal
training.

organizations found Microsoft 365 E3 to be intuitive

Modeling and assumptions. Forrester assumes theand easy to use for most employees, decision-

following about the composite organization:

makers dedicated a limited amount of time to train
them on new features and tools. Some of theorganizations created materials for self-guided

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3•

All users attend a 1-hour training session during
the initial rollout of Microsoft 365 E3 tounderstand the new tools and capabilities.

29

ANALYSIS OF COSTS•

The organization has 5% turnover, with new hires

Results. To account for these risks, Forrester

going through the 1-hour training process.

adjusted this cost upward by 5%, yielding a three-

Risks. Training costs may vary based on company

year, risk-adjusted total PV of $1.2 million.

size and existing knowledge of Microsoft solutions.

End User Training
Ref.

MetricSourceInitialYear 1

Year 2

Year 3

K1

Number of users trained

Initial: A1
Years 1 to 3:
A1*5% in for
churn

30,000

1,500

1,500

1,500

K2

Time allocated for directed training(hours)Composite

1

1

1

1

K3

Average hourly rate

E5

$35.09$35.09$36.51$37.24Kt

End user training

K1*K2*K3$1,052,700$52,635$54,761$55,857

Risk adjustment↑5%$1,105,335$55,267$57,500$58,650

Ktr

End user training (risk-adjusted)
Three-year total: $1,276s,751

Three-year present value: $1,247,162

DEVICE REFRESH
Interviewees said their organizations assessed which
devices did not meet the minimum specifications fortheir move to Windows 11. While this upgrade
coincided with the device refresh cycle at most firms,
some had to refresh a small portion of devices off ofthe normal refresh cycle.
Modeling and assumptions. Forrester assumes thefollowing about the composite organization:•

5% of users have a device that is not on thecurrent refresh cycle and does not meet minimum
specifications.

•

The average device is valued at $800.

Risks. Device refresh costs will vary based on
current refresh rates and the size of the organization.
Results. To account for these risks, Forrester
adjusted this cost upward by 5%, yielding a threeyear, risk-adjusted total PV of $1.3 million.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

30

ANALYSIS OF COSTS

Device Refresh
Ref.

MetricSourceInitial

L1

Number of users

A1

30,000

L2

Percent of user devices requiring
upgradeComposite

5%

L3

New device cost

Assumption

$800

Lt

Device refresh

L1*L2*L3

Risk adjustment

↑5%

Ltr

Device refresh (risk-adjusted)
Three-year total: $1,260,000

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3Year 1

Year 2

Year 3$1,200,000

$0

$0

$0

$1,260,000

$0

$0

$0

Three-year present value: $1,260,000

31

Financial Summary
CONSOLIDATED THREE-YEAR RISK-ADJUSTED METRICS

Cash Flow Chart (Risk-Adjusted)

Cash
flows

Total costs

Total benefits

Cumulative net benefits$140.0 M$120.0 M

The financial results calculated in the
Benefits and Costs sections can beused to determine the ROI, NPV, andpayback period for the composite
organization’s investment. Forrester
assumes a yearly discount rate of 10%
for this analysis.

$100.0 M$80.0 M

These risk-adjusted ROI,
NPV, and payback period
values are determined byapplying risk-adjustment
factors to the unadjusted
results in each Benefit andCost section.

$60.0 M
$40.0 M
$20.0 M-$20.0 M-$40.0 M
InitialYear 1

Year 2

Year 3

Cash Flow Analysis (Risk-Adjusted Estimates)
InitialYear 1

Year 2

Year 3

Total

Present
Value($5,712,210)($15,399,704)($16,963,156)($17,014,509)($55,089,579)($46,514,330)

Total benefits$0$55,519,453$57,098,491$58,705,304$171,323,248$141,767,229

Net benefits($5,712,210)$40,119,748$40,135,335$41,690,796$116,233,669$95,252,899

Total costs

ROI
Payback

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

205%<3 months

32

Appendix A: Total Economic
ImpactTotal Economic Impact is a methodology developed
by Forrester Research that enhances a company’s
technology decision-making processes and assists
vendors in communicating the value proposition of
their products and services to clients. The TEI
methodology helps companies demonstrate, justify,
and realize the tangible value of IT initiatives to both

PRESENT VALUE (PV)The present or current value of(discounted) cost and benefit estimates
given at an interest rate (the discountrate). The PV of costs and benefits feed
into the total NPV of cash flows.

senior management and other key businessstakeholders.

NET PRESENT VALUE (NPV)TOTAL ECONOMIC IMPACT APPROACH

The present or current value ofBenefits represent the value delivered to the(discounted) future net cash flows given

business by the product. The TEI methodology

an interest rate (the discount rate). A

places equal weight on the measure of benefits andpositive project NPV normally indicatesthe measure of costs, allowing for a full examinationthat the investment should be made,of the effect of the technology on the entire

unless other projects have higher NPVs.

organization.
Costs consider all expenses necessary to deliver the
proposed value, or benefits, of the product. The cost
category within TEI captures incremental costs overthe existing environment for ongoing costs
associated with the solution.

RETURN ON INVESTMENT (ROI)
A project’s expected return in percentage

terms. ROI is calculated by dividing net
benefits (benefits less costs) by costs.

Flexibility represents the strategic value that can beobtained for some future additional investment

DISCOUNT RATE

building on top of the initial investment already made.

The interest rate used in cash flow

Having the ability to capture that benefit has a PV

analysis to take into account thethat can be estimated.

time value of money. Organizations

Risks measure the uncertainty of benefit and cost

typically use discount rates between

estimates given: 1) the likelihood that estimates will

8% and 16%.

meet original projections and 2) the likelihood that
estimates will be tracked over time. TEI risk factors
are based on “triangular distribution.”

PAYBACK PERIODThe breakeven point for an investment.

The initial investment column contains costs incurred at “time0” or at the beginning of Year 1 that are not discounted. Allother cash flows are discounted using the discount rate at theend of the year. PV calculations are calculated for each total
cost and benefit estimate. NPV calculations in the summary
tables are the sum of the initial investment and thediscounted cash flows in each year. Sums and present value
calculations of the Total Benefits, Total Costs, and Cash Flowtables may not exactly add up, as some rounding may occur.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3This is the point in time at which net
benefits (benefits minus costs) equal initialinvestment or cost.

33

Appendix B: Interview And Survey Demographics
Interviews
Role

Industry

RegionE3 users

IT director

Agriculture

Asia Pacific

6,000

2022

Global CISO

Food processing

North America

8,000

2022

IT manager

Manufacturing

South America

6,200

2022

Chief partner

RetailAsia Pacific

6,200

2022

Director of Windows andcorporate systems

Telecommunications

United States

2,000

2022

CFO

Food service

North America

10,0002020

SVP of global technology

Restaurant

Global20,8002020

Managing director

Financial services

North America

1,500

2020

Head of IT

Biotechnology

United States

1,100

2020

CIO, North America

Nonprofit

Global

75,0002020

CISO

Professional services

United States

17,0002020

Senior director of IT

ISP

Canada

5,000

2020

Senior systems
developer

Automotive

Europe37,0002020

CTO

Professional services

North America

135,000

2020

SVP of information
security

Financial services

United States

20,0002020

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3Interview year

34

E3

Survey Demographics

Which of the following best describes the industry to which your company belongs?

Financial services and/or insurance

11%
10%
10%

Retail9%Consumer product goods and/or manufacturing

6%
6%
6%
6%

Telecommunications services
Business or professional services

5%
4%
4%

Media and/or leisure
3%
3%
3%
3%
3%
3%
3%

Agriculture, food, and/or beverage
Education and/or nonprofits
Government
Automotive
Travel and hospitality

1%
1%
1%

Using your best estimate, what is your organization's
annual revenue (USD)?

In which country are you located?

Source: Microsoft/Forrester Total Economic Impact - Microsoft E3 Survey, 2022
Base: 79 IT Managers+ Software Solutions Decision Makers

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

35

Appendix C: Endnotes
1 Source: “The Future Of The Office,” Forrester Research, Inc., September 7, 2022.
2 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s

technology decision-making processes and assists vendors in communicating the value proposition of theirproducts and services to clients. The TEI methodology helps companies demonstrate, justify, and realize thetangible value of IT initiatives to both senior management and other key business stakeholders.
3 Source: Forrester Consulting Cost Of A Cybersecurity Breach Survey, Q1 2021.

THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E3

36THE TOTAL ECONOMIC IMPACT™ OF MICROSOFT 365 E337