The Total Economic Impact™
Of Windows 365
Cost Savings And Business Benefits
Enabled By Windows 365 Cloud PCs
MARCH 2023

A FORRESTER TOTAL ECONOMIC IMPACT™ STUDY COMMISSIONED BY MICROSOFT

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

Consulting Team: Kara Luk
Marianne Friis
Chris Layton

The Windows 365 Customer Journey .................... 6
Key Challenges ...................................................... 6
Why Windows 365 .................................................. 7
Composite Organization ......................................... 9
Analysis Of Benefits .............................................. 10
IT Cost Savings For Employee Onboarding, Device
Maintenance, And Offboarding ............................ 10
Improved Productivity For Power Users ............... 12
Accelerated M&A Employee Productivity ............. 14
Improved Contractor Productivity Through SelfService.................................................................. 16
Cost Savings Through BYOPC Enablement ........ 18
Unquantified Benefits ........................................... 19
Flexibility ............................................................... 21
Analysis Of Costs .................................................. 23
Windows 365 Subscription Costs ......................... 23
Deployment, Ongoing Management, And Training
Costs .................................................................... 25
Financial Summary ................................................ 27
Appendix A: Total Economic Impact ................... 28
Appendix B: Supplemental Material .................... 29
Appendix C: Endnotes .......................................... 30

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THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Executive SummaryEnterprises increasingly need a comprehensive digital workplace strategy to address the
future of work, increase engagement, drive productivity enhancements, and reduce
costs.1 Organizations that used Windows 365 to securely stream personalized desktops
across devices found that it enabled a variety of scenarios for the new world of hybrid
work while simplifying IT administration, improving productivity for a variety of end users,
and driving cost savings.

Windows 365 is a cloud-based software as a service(SaaS) that securely streams virtual machines, which

KEY STATISTICS

Microsoft calls Cloud PCs, to end users withsimplified IT administration. Cloud PCs enable users
to access their personalized desktop, apps, settings,
and content from the Microsoft cloud on any device.
Windows 365 helps organizations to easily set up
and scale Cloud PCs to fit business needs andReturn on investment (ROI)

Net present value (NPV)

securely support hybrid workforces; streamline virtual40%$1.54M

desktop management for IT; improve productivity for
employees, contractors, and power users; and drive
hardware savings.

Prior to using Windows 365, interviewees noted how

Microsoft commissioned Forrester Consulting totheir organizations used laptop computers to enableconduct a Total Economic Impact™ (TEI) study andtheir contractors, third-party resources, power users,

examine the potential return on investment (ROI)

and employees joining through acquisition to accessenterprises may realize by deploying Windows 365

their corporate networks, files, and applications. In

Cloud PCs.2 The purpose of this study is to provide

addition to physical desktops, they also had tried

readers with a framework to evaluate the potential

virtual desktop infrastructure (VDI), which had

financial impact of Windows 365 on theirlimitations in meeting users’ needs and resulted inorganizations.

unpredictable consumption costs. These priorattempts yielded limited success, leaving them with

To better understand the benefits, costs, and risks
associated with this investment, Forrester interviewed

productivity issues, IT burden, security concerns, anddeployment challenges.

four representatives with experience using Windows365. For the purposes of this study, Forrester

After the investment in Windows 365, theaggregated the interviewees’ experiences andinterviewees simplified desktop deployment whencombined the results into a single composite

providing Cloud PCs to employees and third parties.

organization that is a global organization withKey results from the investment include reduced IT

revenue of $10 billion per year and a distributed

costs for desktop management during onboarding,workforce that includes contractors, power users, andmaintenance, and offboarding; improved time toemployees joining through acquisition.

value and productivity for users, including contractors
and power users; and hardware cost savings.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

1

EXECUTIVE SUMMARYKEY FINDINGS•Reduced hardware costs by $750 per

Quantified benefits. Three-year, risk-adjusted

contractor through BYOPC (bring-your-own-present value (PV) quantified benefits for thePC) programs. The composite organization

composite organization include:

allows contractors to access Cloud PCs on their•own devices, reducing hardware costs. Through
Reduced IT costs by 88% for desktop

the BYOPC program supported by Windows 365,

deployment, 88% for maintenance, and 96%

contractors are empowered to purchase thefor machine recovery. The composite

laptop of their choice or utilize existing hardware.

organization significantly reduces IT efforts

Over three years, the avoided hardware andduring employee onboarding, device

shipping expenses total $1.1 million for the

maintenance, and offboarding using Windows

composite organization.

365. As a result, the composite saves $1.1 million
in IT labor costs over three years.
•“The thing we like about
Windows 365 is the “as-a-service
model.” We have 10,000
employees, but we’re a small
technology team, especially on
the infrastructure andvirtualization side. So the factthat I don’t have to manage awhole bunch of controllers — it’s
just: click a button, the machine
provisions, and Microsoft
manages that infrastructure —that’s a big win for our team forsure.”

Improved productivity for power users is
worth $2.2 million, over three years. The
composite organization provides power users,
including graphic designers, developers, anddata scientists, with Cloud PCs that are properly
configured for their specialized workloads. The
Cloud PCs help power users manage large files
and workloads much faster than otherwise
possible and can be quickly reconfigured asneeds change, helping them to avoid downtime.

•

Improved time to productivity for merger andacquisition (M&A) employees, recapturing 120
hours per employee. The composite
organization enables employees joining throughM&A to access corporate desktops, files, andapplications three weeks sooner than possible

Vice president of infrastructure andsecurity

with a physical device, as they avoid waiting for
hardware to be procured and delivered. Over
three years, the composite recaptures $719,100
in productivity that was lost in the priorenvironment.
•

Improved user productivity through selfservice is worth $253,000, over three years.
Windows 365 users access self-healing

Unquantified benefits. Benefits that provide value
for the composite organization but that are notquantified in this study include:•

Improved security posture. Windows 365

capabilities to troubleshoot and fix issues,enables users to securely access corporate data

avoiding the need to submit IT tickets and incur

and applications. It also allows the organization

downtime.

to remove employee access instantly whenneeded as files and data are not stored on local
machines. The composite organization mitigates

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

2

EXECUTIVE SUMMARY•

risk and leaks by centralizing data and access incomposite organization and total $219,000 overthe cloud instead of on devices.

three years.34

Greater cost predictability and IT savings

The representative interviews and financial analysis

compared to VDI. Windows 365’s subscription-found that a composite organization experiences

based pricing enables the composite to forecast

benefits of $5.37 million over three years versus

spend based on number of users, rather thancosts of $3.85 million, adding up to a net present

consumption, as is typically the case with VDI.

value (NPV) of $1.53 million and an ROI of 40%.

Additionally, Windows 365 offers greater IT
management simplicity compared to VDI.
•

Improved user experience and accessibility
options. The composite organization can support
accessibility software for employees and ease of▬ Forrester’s Perspective: End-User

Computing Technologies Drive
Anywhere And Hybrid Work Success

access for remote employees. This allows it to
support a greater diversity of employees acrossfunctions.
•

Flexibility for user-level computing needs.
The composite organization can quickly upgrade

As of late 2022, 66% of enterprise leaders haveadopted anywhere or hybrid work.3 Forrester’s
research indicates that this trend will continue as
leaders and employees see the benefits of flexible
work models.

users to higher-performance computing
configurations instead of needing to redeploy
machines or build one-off virtual machines.
•

Reduced total cost of ownership (TCO)
through thin clients and longer laptop
depreciation cycles. In the future, the composite
organization will leverage thin clients asappropriate and depreciate assets longer overtime with Windows 365, reducing TCO.

Costs. Three-year, risk-adjusted PV costs for thecomposite organization include:•

Windows 365 subscription costs. Over three
years, the composite organization incurs$3.6 million in Windows 365 subscription costs
based on the number of monthly users.

•

Deployment, ongoing management, andtraining costs. Two IT resources dedicate a
portion of their time to deployment and ongoing
management. New Windows 365 users also
receive 15 minutes of training. The IT labor andtraining cost are lower than that of VDI for the

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Throughout the first two years of the COVID-19
pandemic, end-user computing (EUC) technologies,
including solutions like Windows 365, were thelifeline connecting employees to their organizations,enabling them to collaborate with colleagues,
participate in corporate culture, and maintain strong
relationships with customers. In 2023 and beyond,
EUC technologies will continue to play a vital
foundational role in enabling organizations tomaintain productivity, reduce cybersecurity risks,and serve and retain customers.
Forrester’s research finds that organizations
increasingly see EUC as not just a necessity but as
the conduit to a strong digital employee experienceand a strategic competitive differentiator in the battle
for talent. EUC technologies are an important
contributor to employee experience, allowing
employees to work productively from anywhere
without sacrificing enterprise manageability andsecurity. As companies expand geographically andsupport various forms of anywhere and hybrid work,
EUC is the foundation that enables secure access totask-critical information.4

3

EXECUTIVE SUMMARYROI

BENEFITS PV

NPV

40%

$5.37M$1.53M

Benefits (Three-Year)IT cost savings for employee onboarding,device maintenance, and offboarding$1.1M

Improved productivity for power users$2.2M

Accelerated M&A employee productivity

Improved contractor productivity through selfservice

Cost savings through BYOPC enablement$719.1K$253.2K$1.1M“Windows 365 is safe and secure,and we can issue machines tosecure partners a lot easier. That’s
what hybrid work means to us.
Geography is a nonissue.”— Branch manager for ICT services, government
THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

4

EXECUTIVE SUMMARYTEI FRAMEWORK AND METHODOLOGY
From the information provided in the interviews,
Forrester constructed a Total Economic Impact™
framework for those organizations considering an
investment in Windows 365.
The objective of the framework is to identify the cost,benefit, flexibility, and risk factors that affect theinvestment decision. Forrester took a multistep
approach to evaluate the impact that Windows 365
can have on an organization.

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

INTERVIEWSInterviewed four representatives at fourorganizations using Windows 365 to obtain datawith respect to costs, benefits, and risks.

COMPOSITE ORGANIZATION
Designed a composite organization based on
characteristics of the interviewees’organizations.

FINANCIAL MODEL FRAMEWORK
Constructed a financial model representative of
the interviews using the TEI methodology and
DISCLOSURES
Readers should be aware of the following:This study is commissioned by Microsoft and delivered byForrester Consulting. It is not meant to be used as acompetitive analysis.

risk-adjusted the financial model based on
issues and concerns of the interviewees.

CASE STUDY
Employed four fundamental elements of TEI in

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 Windows 365.

modeling the investment impact: benefits, costs,

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 themeaning of the study.

provides a complete picture of the total

flexibility, and risks. Given the increasing
sophistication of ROI analyses related to IT
investments, Forrester’s TEI methodology

economic impact of purchase decisions. Please
see Appendix A for additional information on the
TEI methodology.

Microsoft provided the customer names for the interviews
but did not participate in the interviews.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

5

The Windows 365 Customer Journey
Drivers leading to the Windows 365 investment

Interviews
Role

Industry

RegionEmployees

Revenue/Funding

Branch manager for ICT services

Government

Australia HQ,
national operations

14,000

Annual funding: $50B AUD

Enterprise architect for digital workplace

Manufacturing

Europe HQ,
global operations

43,000

Annual revenue: €11B

Vice president of infrastructure andsecurity

Financial services

Canada HQ,
global operations

10,000

Annual revenue: 3.4B CAD

President

Media andentertainment

US HQ,US operations

10 FTEs,
17 seasonal
workers

Annual revenue: $2M to $3M

access request, account creation, machine

KEY CHALLENGES

provisioning, user logging in, and signing in.”Prior to the investment, interviewees provided
physical devices to contractors, third-party resources,•

Inefficient deployment, maintenance, andand employees joining through M&A. Interviewees

recovery processes for IT. In the priornoted that they had also tried VDI to enable remoteenvironments, IT staff spent a significant amountdesktop access from their devices but found theof time on machine procurement, deployment,complexity prohibitive.

and maintenance. Interviewees shared that VDI
created additional complexity that would have

The interviewees explained how their organizations

been unsustainable to manage without additional

struggled with common challenges, including:•

IT resources. The president at a media andDelayed time to productivity for onboarded

entertainment organization said: “VDI was aemployees, contractors, and third parties.

challenge that required constant maintenance. It

Interviewees shared that the time required to

was just a pain. We couldn’t have used [a VDI

deploy devices impacted productivity.

solution] without a full-time IT person on staff [tosupport it].”

The enterprise architect for digital workplace at a
manufacturing organization noted that the•

Cost and logistics challenges aroundlogistical challenges associated with procuring

sourcing and shipping devices. Interviewees

and setting up devices prevented employees

shared logistical challenges around sourcing andjoining through acquisition from gaining access toshipping devices to employees, contractors, andcorporate resources in a timely manner.

third-party resources. For example, aSimilarly, the vice president of infrastructure andsecurity at a financial services organization
shared: “In the old world, when we werecollaborating with a third party that signed on to
do some work with us, it could be three weeks
before they had access. This went throughmanufacturing organization had a workforce
spread across 180 countries, which createdissues with customs and vendors being unable todeliver hardware to employees in certain
locations. Additionally, the risk team at a financial
services organization mandated a cease inshipping hardware to overseas contractors due tocost, logistics, and security issues.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

6

THE WINDOWS 365 CUSTOMER JOURNEY•

Security issues associated with physicalat a government organization had challenges

desktops and VPNs. Interviewees shared

supporting power users with its VDI approach:security concerns around physical devices.

“Power users was another complication for us. If I

Before investing in Windows 365, a

had somebody in that environment who was amanufacturing organization provided VPN

very heavy user on a pooled environment, I had

licenses to enable third-party resources to accessto build them a separate VM, a separate virtualits corporate network. The organization’s

machine or server, just to handle their use case,enterprise architect for digital workplace viewed

which is an expensive way to solve a relatively

this as a risk, saying, “By giving those external

easy problem.”people a VPN, they had the keys to the kingdom
and could access anything they wanted
internally.” The president at a media and“We’re moving a lot of source
files and things around in raw
recordings. When the team wasediting and rendering out videos,
their desktop was not available
for moving large files.”entertainment company had concerns overcontractors accessing sensitive data from theirpersonal devices on which security policies could
not be enforced.

“We are working with sensitive
information and files, but wehave people, especiallycontractors, who are using
personal devices that we reallycan’t touch. They wouldn’t do
any work for us if they thought
we were going to put policies intheir machines.”

President, media and entertainment

WHY WINDOWS 365
The interviewees’ organizations searched for asolution that could:•

Simplify virtual desktop management during
employee onboarding and offboarding.
Interviewees sought a solution that could

President, media and entertainment

streamline the process of deploying andmanaging virtual machines to reduce IT burden
and improve time to productivity for new•

employees, contractors, and third parties.

Lack of support for power users andInterviewees stated that Windows 365 provided a

specialized workloads. In their priorsimple way to deploy Cloud PCs to any device.

environments, organizations lacked flexibility insupporting power user computing requirements.

•

Support power user workloads. Interviewees’

For example, the vice president of infrastructureorganizations required an agile way to meet theand security noted situations in their priorcomputing needs of power users and theirenvironment in which devices were not effectively

specialized workloads. Interviewees highlighted

configured for developer workloads and had to be

how Windows 365 enabled them to configure

shipped back and redeployed, impacting

their Cloud PCs with the storage and processing

productivity. The branch manager of ICT services

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

7

THE WINDOWS 365 CUSTOMER JOURNEY

options to meet specific user needs and quickly
update configurations as their needs changed.
•

Provide employees with access to apps, files,and data while protecting the business.
Windows 365 offered the interviewees’organizations an approach that could secureorganizational and customer data without
sacrificing productivity. Through storing
information in the cloud instead of on user
devices, Windows 365 enabled the organizations
to address prior security concerns associated“The reason we pushed forWindows 365 with Microsoft
Managed Desktop is because wedidn’t have to grow a massive
operations team or security
operations team.”
Vice president of infrastructure andsecurity

with physical devices and BYOPC scenarios.
•

Enable cost predictability and IT efficiencies
compared to VDI. Interviewees’ organizations
invested in Windows 365 to take advantage ofthe subscription-based pricing, which provided
greater cost predictability than VDI’s
consumption-based pricing. Further, Windows
365 offered greater IT simplicity in desktop
deployment and management compared to theinterviewees’ prior experiences with VDI. The
president at the media and entertainmentorganization said: “From our perspective, it was
the simplicity of it all. [Windows 365] was going tosave me time and frustration I experienced withVDI.”

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

8

THE WINDOWS 365 CUSTOMER JOURNEYCOMPOSITE ORGANIZATION

Deployment characteristics. In its prior

Based on the interviews, Forrester constructed a TEI

environment, the composite organization deployedframework, a composite company, and an ROI

laptop computers to contractors and new employees

analysis that illustrates the areas financially affected.

acquired via M&A activity. M&A employees

The composite organization is representative of theexperienced a delay in corporate access until afour interviewees, and it is used to present thedesktop computer arrived. Power users only had

aggregate financial analysis in the next section. The

access to local computing resources.

composite organization has the following

With Windows 365, the organization launches acharacteristics:

BYPOC program for contractors, providing them with

Description of composite. The global organization

Cloud PCs that can be accessed on their own device,

has annual revenues of $10 billion and 10,000 total

avoiding the need to provide them with a laptop.

employees, growing by 5% every year. The

Employees joining through acquisition receive aorganization employs an additional 2,000 contractors.

Cloud PC for two months before they are transitioned

Contractors have an average attrition rate of 25%

to a physical computer. Power users are provided

and must be replaced each year.

Cloud PCs to support their workload needs.

The organization also has a group of 500 powerusers, including graphic designers, video production
staff, developers, and data scientists — all withspecialized workload needs. The number of powerusers grows by 5% per year. Power users have an
average attrition rate of 20% and must be replaced
each year.
The organization is undergoing rapid growth andmakes one acquisition per year. The number of
employees joining per acquisition grows by 5% eachyear, with 150, 158, and 166 new employees joining
in Years 1, 2, and 3, respectively.

Key Assumptions• $10 billion annual
revenue• 2,000+ contractors• 1 acquisition per year;
incorporating 150+ new
employees each year
• 500+ power users

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

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

Total Benefits
Ref.

BenefitYear 1

Year 2

Year 3

Total

Present
Value

Atr

IT cost savings for employee
onboarding, device maintenance, andoffboarding$414,159$434,867$456,655$1,305,681$1,078,994

Btr

Improved productivity for power users$841,500$883,575$927,333$2,652,408$2,191,946

Ctr

Accelerated M&A employee productivity$275,400$290,088$304,776$870,264$719,089

Dtr

Improved contractor productivity throughself-service$97,200$102,060$107,163$306,423$253,224

Etr

Cost savings through BYOPC
enablement$433,500$455,175$478,295$1,366,970$1,129,619

Total benefits (risk-adjusted)$2,061,759$2,165,765$2,274,222$6,501,746$5,372,872

tickets. With Windows 365, it’s really an email, a

IT COST SAVINGS FOR EMPLOYEE

secure credential share, and people are up and

ONBOARDING, DEVICE MAINTENANCE, ANDrunning rapidly.” They also noted how the move

OFFBOARDING

reduced laptop retrieval efforts.

Evidence and data. Interviewees using Windows
365 found that it significantly reduced the IT effort
required to provide, maintain, and retrieve PCs for“We can rapidly, securely, andcost-effectively deploy CloudPCs. If we terminate an
employee, we can easily shut
down access, the machine isgone, and they can’t access it
anymore.”employees, including contractors and third-party
employees. Windows 365 simplified machine
deployment by eliminating the need to procure andship physical PCs in these situations and reducing
deployment processes. Cloud PCs were also easier
to maintain and retrieve from contractors. These
efficiencies not only drove cost savings associatedwith device management for IT but also enabledthird-party resources to be productive sooner.
•Vice president of infrastructure andsecurity

The vice president of infrastructure and security
at the financial services organization shared that
Windows 365 streamlined the process ofproviding contractors, such as offshoredevelopers, with PCs, reducing time to accessfrom three weeks to less than a day. They said:“We were shipping contractors a full physicallaptop with our corporate image on it and thendoing the onboarding, usually through support

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365•

The enterprise architect for digital workplace at
the manufacturing organization noted that
Windows 365 provided efficiencies for remote IT
support. They said: “If the Cloud PC isn’t working
properly, we can easily redeploy it. If you have a

10

ANALYSIS OF BENEFITS

physical device that you need to remotely reset••

In the prior environment, it took 4 hours of IT timeor redeploy, a lot more things can go wrong, andto procure and deploy each new machine for ayou have less control from a remote standpoint.”

contractor. With Windows 365, this effort takes
30 minutes — an 88% reduction.

The branch manager of ICT services at the
government organization utilized Windows 365 to•

The composite has a total of 2,000 contractors inenable third-party subcontractors to securelyYear 1. The total grows by 5% each year, withaccess the organization’s files and applications,2,100 and 2,205 total contractors in Year 2 andwhich had previously required a second physicalYear 3, respectively.

device to be deployed to the subcontractors. By
moving to Windows 365, the organization•

per machine is 2 hours. With Windows 365, IT

provided its third parties with virtual desktops

maintenance time per Cloud PC is 15 minutes —instead of physical PCs, reducing associated IT

an 88% reduction.

management efforts and enabling desktops to beprovided faster. They said, “We see this as an

In the prior environment, IT maintenance effort•

The composite has a 25% annual attrition rate forability to fast-track issue someone a desktop,

contractors, with 500, 525, and 551 offboarded inwhich is a secure zone to share and collaborate

Years 1, 2, and 3, respectively.

with.”•

Device recovery time in the prior environment is
4 hours. With Windows 365, Cloud PCs arerecovered in 10 minutes — a 96% reduction.

Reduction in PC procurementand deployment effort for IT:

88%

Risks. Forrester recognizes that these results may
not be representative of all experiences, and thebenefit will vary depending on the following factors:•

The actual fully burdened cost of IT resources.

•

The number of contractors employed and their
attrition rate.

Modeling and assumptions. Based on theinterviewees’ experiences, Forrester assumes thefollowing for the composite organization:•

The fully burdened hourly cost of an IT resource
is $58, or $121,500 annually.

••

The rate of deployment to contractors.

•

The use of IT services or tools to aid deployment,
support, and management.

Results. To account for these risks, Forrester
adjusted this benefit downward by 5%, yielding a

The organization onboards 600 contractors inthree-year, risk-adjusted total PV (discounted at 10%)

Year 1. The number of contractors onboardedof $1.1 million.

per year grows by 30% each year, with 630 and
662 contractors onboarded in Year 2 and Year 3,
respectively.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

11

ANALYSIS OF BENEFITSIT Cost Savings For Employee Onboarding, Device Maintenance, And Offboarding
Ref.

MetricSourceYear 1

Year 2

Year 3

A1

Fully burdened hourly cost of IT resource

TEI standard

$58

$58

$58

A2

Number of contractors onboarded

Composite

600

630

662

A3

IT procurement and deployment effort in priorenvironment per machine (hours)

Interviews

4.0

4.0

4.0

A4

IT procurement and deployment effort with Windows
365 per machine (hours)

Interviews

0.5

0.5

0.5

A5

Subtotal: Avoided planning and deployment costs(rounded)A1*A2*(A3-A4)$121,800$127,890$134,386

A6

Number of contractors

Composite

2,000

2,100

2,205

A7

IT maintenance effort in prior environment per
machine (hours)

Interviews

2.0

2.0

2.0

A8

IT maintenance effort with Windows 365 permachine (hours)

Interviews

0.25

0.25

0.25

A9

Subtotal: Avoided maintenance costs (rounded)

A1*A6*(A7-A8)$203,000$213,150$223,808

A10

Number of contractors offboarded

Composite

500

525

551

A11

Device recovery time in prior environment (hours)

Interviews

4.0

4.0

4.0

A12

Device recovery time with Windows 365 (hours)

Interviews

0.17

0.17

0.17

A13

Subtotal: Avoided recovery costs (rounded)

A1*A10*(A11-A12)$111,157$116,715$122,495At

IT cost savings for employee onboarding, device
maintenance, and offboarding

A5+A9+A13$435,957$457,755$480,689

Risk adjustment↓5%$414,159$434,867$456,655

Atr

IT cost savings for contractor onboarding, device
maintenance, and offboarding (risk-adjusted)
Three-year total: $1,305,681

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $1,078,994

12

ANALYSIS OF BENEFITSIMPROVED PRODUCTIVITY FOR POWER USERS

Modeling and assumptions. Based on the

Evidence and data. Windows 365 met theinterviewees’ experiences, Forrester assumes theperformance needs of power users with specialized

following for the composite organization:

workload requirements, such as developers and•

The composite organization has 500, 525, andvideo editors, reducing productivity issues and551 power users, including video production staff,

downtime incurred in their prior environments.

developers, and data scientists, in Years 1, 2,•

and 3, respectively.

The president at the media and entertainmentorganization shared how Windows 365 saved•

each video editor a minimum of 2 hours per

Each power user avoids 4 hours of downtime permonth, totaling 48 labor hours over a year.

month on activities including file upload/download
and video rendering. In the organization’s prior•$55, or $114,750 annually.

environment, video editing staff lacked computeresources necessary for work involving large file

The fully burdened hourly cost of a power user is•

A 75% productivity recapture is included.

sizes and intensive applications, often rendering
their desktops unavailable. Windows 365 enabled

Risks. Forrester recognizes that these results may

the organization to easily configure machines

not be representative of all experiences, and thewith the CPU, RAM, and storage levels

benefit will vary depending on the following factors:

appropriate for its staff’s work and upgradeconfigurations as their needs change. As a result,staff can upload, download, and render video•

The number of power users.

•

The severity of downtime incurred in an
organization’s prior state.

files faster, while also being able to use theirdesktops for other work in the meantime. Theinterviewee noted how the performance of the
Cloud PCs was especially helpful during a large
project with a tight timeline, saving 40 hours in
one month alone.
••

The actual fully burdened cost of each poweruser.

Results. To account for these risks, Forrester
adjusted this benefit downward by 15%, yielding athree-year, risk-adjusted total PV of $2.2 million.

Similarly, the vice president of infrastructure andsecurity at the financial services organization also
noted time savings for developers throughWindows 365. They explained: “When our Excel
developers run their spreadsheets, their
computer is not usable. [With Windows 365], now
they can let Excel churn away and can keep
emailing, accessing our CRM system, andeverything like that. It’s going to run faster on thevirtual machine, and they’re going to have a moreproductive and enjoyable end-user experience.”

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

13

ANALYSIS OF BENEFITS

Improved Productivity For Power Users
Ref.

MetricSourceYear 1

Year 2

Year 3

B1Power users

Composite

500

525

551

B2

Avoided downtime per power user (hours)

Interviews

48

48

48

B3

Fully burdened hourly cost of power user

TEI standard

$55

$55

$55

B4

Productivity recapture

TEI standard

75%

75%

75%

Bt

Improved productivity for power users

B1*B2*B3*B4$990,000$1,039,500$1,090,980

Risk adjustment↓15%$841,500$883,575$927,333

Btr

Improved productivity for power users (risk-adjusted)
Three-year total: $2,652,408

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $2,191,946

14

ANALYSIS OF BENEFITSACCELERATED M&A EMPLOYEE PRODUCTIVITY
Evidence and data. The manufacturing organization“I would definitely say we save a
ton of time once an acquisition
kicks off. With Windows 365, we
can easily deploy the minute it’sreally needed, and we don’t needto take that three weeks’ time
into account anymore. In somecases, it was up to a few months
before the partner could deliver
the hardware. So we’ve seenhuge benefits.”leveraged Windows 365 during its recent acquisitions
to improve time to productivity for new employees.
The enterprise architect for digital workplace at thatorganization noted how employees joining throughacquisition experienced a lag of three weeks before
they could gain access to corporate resources due tochallenges in procuring and shipping hardware. With
the move to Windows 365, the organization
effectively recaptured lost productivity for newly
acquired employees with the ability to deploy CloudPCs within a few hours.
Modeling and assumptions. Based on theEnterprise architect for digital
workplace, manufacturing

interviewees’ experiences, Forrester assumes thefollowing for the composite organization:•

The composite organization incorporates 150,
158, and 166 new employees through acquisitionin Years 1, 2, and 3, respectively.

•

Risks. Forrester recognizes that these results may

Each employee experiences three weeks, ornot be representative of all experiences, and the

120 hours, of additional productivity by gaining

benefit will vary depending on the following factors:

access to a Cloud PC instead of waiting for a•

laptop to be procured, imaged, and shipped to

employees incorporated.

them.
•

•

The fully burdened hourly cost of a generalbusiness resource is $36, or $74,250 annually.

•

Forrester assumes a 50% productivity recapture
to account for work that an employee may still beable to execute without a Cloud PC.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

The frequency of acquisitions and number of

The actual fully burdened cost of employees
joining through acquisition.

Results. To account for these risks, Forrester
adjusted this benefit downward by 15%, yielding athree-year, risk-adjusted total PV of $719,000.

15ANALYSIS OF BENEFITS

Accelerated M&A Employee Productivity
Ref.

MetricSourceYear 1

Year 2

Year 3

C1

New employees from acquisition

Composite

150

158

166

C2

Additional productive hours saved for new
employees

Interviews

120

120

120

C3

Fully burdened hourly cost of a general businessresource

TEI standard

$36

$36

$36

C4

Productivity recapture

TEI standard

50%

50%

50%

Ct

Accelerated M&A employee productivity

C1*C2*C3*C4$324,000$341,280$358,560

Risk adjustment↓15%$275,400$290,088$304,776

Ctr

Accelerated M&A employee productivity (riskadjusted)
Three-year total: $870,264

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $719,089

16

ANALYSIS OF BENEFITSIMPROVED CONTRACTOR PRODUCTIVITY•

The composite organization employs 2,000,

THROUGH SELF-SERVICE

2,100, and 2,205 contractors in Years 1, 2, and 3,

Evidence and data. Interviewees found that

respectively.

resolving issues with Windows 365 was significantly•

easier than it had been in their prior environments,

The fully burdened hourly cost of a contractor is$36, or $74,250 annually.

leading to avoided downtime for users. In particular,•

self-service tools empowered users to troubleshoot

A 75% productivity recapture is applied toissues and their reset their machines if necessary,account for other work that may be accomplishedhelping them to avoid downtime and reducing thewhile waiting for IT resolution.

need to contact IT for support. The branch manager

Risks. Forrester recognizes that these results mayof ICT services for a government organization said:

not be representative of all experiences, and the“Self-help means fewer calls to the service desk andbenefit will vary depending on the following factors:

level 2 teams to help troubleshoot or fix hung•sessions or virtual desktops. Users restart them

The number of contractors and their fullyburdened cost.

quickly themselves. They prefer this approach, andthe user experience is much preferred.”•

The frequency and severity of downtime in theprior environment.

Modeling and assumptions. Based on theinterviewees’ experiences, Forrester assumes the

Results. To account for these risks, Forrester

following for the composite organization:

adjusted this benefit downward by 10%, yielding a•three-year, risk-adjusted total PV of $253,000.

Each contractor avoids 2 hours of downtime per
year through Windows 365.

Improved Contractor Productivity Through Self-Service
Ref.

MetricSourceYear 1

Year 2

Year 3

D1

Avoided downtime per contractor per year (hours)

Interviews

2

2

2

D2

Number of contractors

Composite

2,000

2,100

2,205

D3

Fully burdened hourly cost of a contractor

TEI standard

$36

$36

$36

D4

Productivity recapture

TEI standard

75%

75%

75%

Dt

Improved contractor productivity through self-service

D1*D2*D3*D4$108,000$113,400$119,070

Risk adjustment↓10%$97,200$102,060$107,163

Dtr

Improved contractor productivity through self-service(risk-adjusted)
Three-year total: $306,423

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $253,224

17

ANALYSIS OF BENEFITSCOST SAVINGS THROUGH BYOPC•

organization also experienced hardware savings.

ENABLEMENT

They shared: “We used to have a lab withEvidence and data. Interviewees experienced costmachines in it to demo recordings, write scripts,

savings with Windows 365 by providing Cloud PCs toand things like that. All those machines are gone,

contractors instead of physical devices.
•

The president of a media and entertainment

and they’re Windows 365 Cloud PCs now. I

The vice president of infrastructure and security

haven’t had to buy a machine in a year now. I

at the financial services organization noted thatwould normally have bought probably five or six

Windows 365 enabled their organization to cease

machines at this point in the year. That’s $10,000

procuring and shipping laptops to contractors,

in machines laying around that don’t need to beaddressing prior challenges with cost, logistics,

bought anymore.”and security.

Modeling and assumptions. Based on theinterviewees’ experiences, Forrester assumes the“Our risk organization mandated
that we stop shipping hardware
overseas, and we needed tocome up with a solution. Now,
for third parties or contractors,
we’re not shipping hardware,whether it be overseas or in
North America. We’re giving
them a Windows 365 virtual
machine.”Vice president of infrastructure andsecurity

following for the composite organization:•

The composite organization employs 600, 630,
and 662 new contractors in Years 1, 2, and 3.

•

The composite organization avoids purchasing a$1,500 laptop for each new contractor.

•

The composite organization provides a $750
stipend to contractors to purchase a laptop.

•

The composite organization avoids $100 inshipping costs per device.

Risks. Forrester recognizes that these results may
not be representative of all experiences, and thebenefit will vary depending on the following factors:•

The number of contractors joining theorganization.

•

Similarly, the enterprise architect for digital•

The cost of a standard laptop and shipping.

workplace at the manufacturing organization•

An organization may choose to not provide a

said: “We don’t hand out a physical device to an
external consultant anymore. A good businesslaptop costs about €1,000, which you write off
over three years. If you compare that amount ofstipend to contractors for the purchase of alaptop. In this case, the hardware cost savings
would be larger. The financial modeling for this
scenario can be referenced in Appendix B.

money against the cost of Windows 365, it’s costeffective to provide a Cloud PC versus a physicalResults. To account for these risks, Forrester

laptop.”adjusted this benefit downward by 15%, yielding athree-year, risk-adjusted total PV of $1.1 million.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

18

ANALYSIS OF BENEFITS

Cost Savings Through BYOPC Enablement
Ref.

MetricSourceYear 1

Year 2

Year 3

E1

Avoided laptops for contractors

Composite

600

630

662

E2

Cost of a standard laptop

Interviews$1,500$1,500$1,500E3

BYOPC budget for contractors

Interviews

$750

$750

$750

E4

Shipping cost per device

Interviews

$100

$100

$100

Et

Cost savings through BYOPC enablement

E1*(E2-E3+E4)$510,000$535,500$562,700

Risk adjustment↓15%$433,500$455,175$478,295

Etr

Cost savings through BYOPC enablement (riskadjusted)
Three-year total: $1,366,970

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $1,129,619

19

ANALYSIS OF BENEFITSUNQUANTIFIED BENEFITS

past experiences with the consumption-basedInterviewees mentioned the following additional

pricing of VDI solutions. Additionally,

benefits that their organizations experienced but wereinterviewees found that Windows 365 was

not able to quantify:

significantly less complex to manage than VDI•

options.
Improved security posture. Interviewees
improved security controls and reduced the risk

Describing cost predictability, the branchof data leaks with Windows 365 by centralizing

manager of ICT services at the government

data and user access within the cloud versus atagency shared: “The cost control andthe device level. The vice president ofpredictability is awesome. I know what I’m going

infrastructure and security at the financial

to spend based on my user accounts rather thanservices organization noted, “It’s really a clean

trying to guess 100 grand a month here or there.

separation between corporate and personal or

No one likes to be a million dollars out when it

corporate and third-party assets that delineatescomes in the budget year with no explanation.

‘This is us; this is you; they don’t talk to each

Cost control is a benefit because it’s a licensed

other.’”

product with dedicated resources.”

Interviewees could also utilize their security tools

The president at a media and entertainment

on employees’ Cloud PCs, enabling third-party

organization noted several IT efficiencies

employees to access data and applications oncompared to VDI: “If someone was getting atheir personal or corporate devices whilevirtual machine through VDI, it’s not just the act

ensuring proper security controls. The president

of provisioning that user that is laborious. It’s theat the media and entertainment organization said,

ongoing maintenance of these images and these“We’re able to use all of our security tools

deployments. It’s a laborious process to keep all

because we’re targeting Windows 365 Cloud PCsof that updated and current, and with Cloud PC,

with those tools, whereas before we couldn’t

it’s not.”target personal devices with them.”•

Improved user experience and accessibility
options. Interviewees highlighted several ways
in which Windows 365 provided a better user

“People can access sensitive
information through Cloud PCs
in a way that protects mybusiness. We can’t fail on
security.”
President, media and entertainment

experience than their prior approaches.
The vice president of infrastructure and security
at the financial services organization appreciatedhaving the ability to access Cloud PCs on any
device through a web browser. They said, “I think
the flexibility of the platform to be accessible fromreally any web browser, anywhere, is a big win
for business continuity and a big win for ease ofaccess.”A branch manager of ICT services at the•Greater cost predictability and IT savings

government organization noted that before

compared to VDI. Interviewees noted that theWindows 365, subcontractors had to use two

subscription-based pricing of Windows 365

laptops to accomplish their work. The

provided greater cost predictability compared to

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

20

ANALYSIS OF BENEFITS

organization created a more seamless user•

Remote worker productivity. The president at

experience by enabling subcontractors to accessthe media and entertainment organization shared

their Cloud PCs through their host organizationthat Windows 365 enabled remote workers to be

device.

productive from a variety of locations. They said:“One of the great things that employees like

The branch manager also shared how Windows

about working for us is we are remote. We do

365 helped support the application requirements

have people that don’t have a home that they’reof employees with accessibility needs, which had

at every day of the year and don’t have the bestpreviously been a challenge with VDI. They said:internet connections in the world. And so, for“The ability to use 100% of accessibility software

them, Windows 365 Cloud PC was the only way

and products because of dedicated resourcing inthey were going to move these files around.”the way that the product works is the number one
benefit. You can’t achieve that in the otherpooled-resource platforms.”•“Previously, subcontractors had
two laptops: one from us andone from the host organization.
Now instead of having two
laptops, we can now just provide
them with a Cloud PC.”

Flexibility for user-level computing needs.
Windows 365 provided interviewees with theability to configure Cloud PCs with the CPU,
RAM, and storage levels required for each user’s
workload needs and update configurations asneeds changed. Interviewees appreciated theflexibility and agility enabled by the

Branch manager for ICT services,
government

configurability.
The enterprise architect for digital workplace at
the manufacturing organization shared: “We use
two different Cloud PC configurations: one with
2 vCPU and one with 4 vCPU. The four vCPU isfor employees that need a lot of computing
power, like accounting staff that live and eat
Excel for breakfast. Others require less. I myself
use the 2 vCPU, and I’m very happy with it.”FLEXIBILITY
The value of flexibility is unique to each customer.
There are multiple scenarios in which a customer
might implement Windows 365 and later realize
additional uses and business opportunities, including:

The vice president of infrastructure and security
at the financial services organization said: “In thepast, we have sent assets that were specced for•

Reduced TCO through thin clients and longer
laptop depreciation. The vice president ofwhat employees were working on, but we’d findinfrastructure and security at the financial

out they need more computing power. We’d haveservices organization saw an opportunity toto ship back the machine and then procure andimage a new machine to fit their requirements.
With Windows 365, it’s a button in the portal, andwe can say, ‘Let’s upgrade these to a power
profile.”’utilize Cloud PCs on thin clients to reduce costs.
They shared: “In the future, I’ll be able to giveeveryone a thin client that can do basic things
and won’t have a lot of power, but the real work isgoing to happen on the Cloud PC. So I candepreciate assets hopefully over a longer periodof time. Number one, my total cost of ownership

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

21

ANALYSIS OF BENEFITS

on devices will be far less. Also, my user
experience when hardware failures occur will be
substantially better because I can easily givethem another one.”•

Added M&A use cases. The enterprise architectfor digital workplace at the manufacturingorganization planned to use Windows 365 toenable employees to access resources held on
the networks of its acquired entities. They
explained: “The company we bought had such abad infrastructure because they’ve been eatingother companies themselves, and we were notgoing to connect to it. Instead, we are going togive employees access to a Cloud PC on the old
network so they can still access whatever
information they need there.”Flexibility would also be quantified when evaluated aspart of a specific project (described in more detail in
Appendix A).

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

22

Analysis Of Costs
Quantified cost data as applied to the composite

Total Costs
InitialYear 1

Year 2

Year 3

Total

Present
Value

Windows 365 subscription costs$0$1,392,300$1,461,956$1,534,864$4,389,120$3,627,121

Deployment, ongoing
management, and training costs$12,758$134,699$52,627$53,091$253,175$218,593

Total costs (risk-adjusted)$12,758$1,526,999$1,514,583$1,587,955$4,642,295$3,845,714

Ref.

Cost

Ftr
Gtr

the organization through acquisition receive

WINDOWS 365 SUBSCRIPTION COSTS

Windows 365 licenses for two months before

Evidence and data. Windows 365 includes several

being transferred to a local PC.

offerings, with multiple Cloud PC configurations
based on performance needs at varying price points.

•

The organization’s contractors and acquired

The interviewees’ organizations purchased Windows

employees receive standard Windows 365

365 as a separate license per user for a fixedlicenses. Power users receive premium licenses

monthly fee to access and use each Cloud PC.

at a higher monthly cost.

••

The branch manager of ICT services at the•

government organization primarily provided$3.6 million in Windows 365 licensing costs over

Cloud PCs to 5,000 subcontractors.

three years. Forrester has modeled a detailed
breakdown of subscription costs, including user

The vice president of infrastructure and security

cost per month, which can be referenced inprovided Cloud PCs to contractor resources andAppendix B.

internal power users.
••

The enterprise architect for digital workplace
2 vCPU Cloud PC configurations for standard

Risks. Forrester recognizes that these results may

users and 4 vCPU configurations for power users

not be representative of all experiences, and thewith greater computing needs.

benefit will vary depending on the following factors:

The president at the media and entertainment•

power users and contractors.
Modeling and assumptions. Based on theinterviewees’ experiences, Forrester assumes thefollowing for the composite organization:

The number of Cloud PC users and rate of
deployment.

organization provided Cloud PCs to internal•

Pricing may vary. Contact Microsoft for additional
details.

purchased•

In total, the composite organization spends•

The performance needs of users and the Cloud
PC configuration chosen.

Results. Due to the limited number of risks identified,Forrester assigned a risk adjustment of 0% and did

The composite organization provides Windows

not adjust this cost upward, yielding a three-year,

365 licenses to each contractor and power user

risk-adjusted total PV (discounted at 10%) of $3.6

during each month of the year. Employees joining

million.

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

23

ANALYSIS OF COSTS

Windows 365 Subscription Costs
Ref.

MetricSourceF1

Windows 365 subscription costs

Ft

Ftr

Year 1

Year 2

Year 3

Interviews$1,392,300$1,461,956$1,534,864

Windows 365 subscription costs

F1$1,392,300$1,461,956$1,534,864

Risk adjustment

0%$1,392,300$1,461,956$1,534,864

Windows 365 subscription costs (risk-adjusted)
Three-year total: $4,389,120

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Initial$0

Three-year present value: $3,627,121

24

ANALYSIS OF COSTSDEPLOYMENT, ONGOING MANAGEMENT, AND

dedicated to planning and deployment drops to

TRAINING COSTS

15% for each FTE in Years 2 and 3. The two IT

Evidence and data. The interviewees noted that theresources also spend 2% of their time on user

initial deployment process and ongoing management

support each year.

for Windows 365 required minimal IT effort.

•

Additionally, new users required minimal training.
•

The enterprise architect for digital workplace at

Each new Windows 365 user receives 15
minutes of training.

•the manufacturing organization noted that the

The composite organization trains 2,000, 630,
and 662 contractors in Years 1, 2, and 3,

organization’s initial proof of concept took threerespectively.

weeks to get up and running. The majority of theeffort included administrative work to provide•

The composite organization trains 150, 158, and
166 acquired employees in Years 1, 2, and 3,

users with access rights.

respectively.
•Interviewees highlighted that Windows 365 could
be deployed to a new user within hours, reducing

The composite organization trains 500, 525, andcosts for ongoing management. The enterprise

551 power users in Years 1, 2, and 3,

architect for digital workplace shared that they

respectively.

had two IT support FTEs responsible for ongoing

Risks. Forrester recognizes that these results may

management, while the vice president of

not be representative of all experiences, and theinfrastructure and security at the financial

benefit will vary depending on the following factors:

services organization allocated 50% of an IT
support FTE’s time for ongoing management.
••

The branch manager for ICT services at the•

The complexity and length of the deployment.

•

The number and costs of FTE efforts dedicatedto deployment and ongoing management.

government organization said that each new
Windows 365 user required less than 15 minutesof training.

•

User training requirements.

•

Actual fully burdened costs of users.

Results. To account for these risks, Forrester

Training time per new user:

15 minutes

adjusted this cost upward by 5%, yielding a threeyear, risk-adjusted total PV of $219,000.

Modeling and assumptions. Based on theinterviewees’ experiences, Forrester assumes thefollowing for the composite organization:•

One IT resource dedicates 10% of their time to
an initial proof of concept.

•

Two IT resources dedicate 40% of their time toplanning and deployment in Year 1. The time

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

25

ANALYSIS OF COSTS

Deployment, Ongoing Management, And Training Costs
Ref.

MetricSourceInitialYear 1

Year 2

Year 3

G1

Number of FTEs managing Windows 365

Interviews

1

2

2

2

G2

Percentage of time spent on planning anddeployment

Interviews

10%

40%

15%

15%

G3

Percentage of time spent on user support

Interviews

2%

2%

2%

G4

Fully burdened annual cost of IT resource

TEI standard$121,500$121,500$121,500$121,500

G5Subtotal: Deployment and support costs

G1*(G2+G3)*G4$12,150$102,060$41,310$41,310G6

Training time per new user (hours)

Interview

0.25

0.25

0.25

G7

Contractors receiving training

Composite

2,000

630

662

G8

Newly acquired employees receiving training

Composite

150

158

166

G9

Fully burdened hourly cost of a contractor or
newly acquired employee (rounded)

TEI standard

$36

$36

$36

G10

Power users receiving training

Composite

500

125

131

G11

Hourly burdened cost of power user (rounded)

TEI standard

$55

$55

$55

G12

Subtotal: Training costs

G6*((G7+G8)*G9+
G10*G11)$26,225$8,811$9,253

Gt

Deployment, ongoing management, andtraining costs

G5+G12$12,150$128,285$50,121$50,563

Risk adjustment↑5%$12,758$134,699$52,627$53,091

Gtr

Deployment, ongoing management, andtraining costs (risk-adjusted)
Three-year total: $253,175

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $218,593

26

Financial Summary
CONSOLIDATED THREE-YEAR RISK-ADJUSTED METRICS

Cash Flow Chart (Risk-Adjusted)
Total costs

Total benefits

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.

Cumulative net benefits

Cash
flows

$2.5 M$2.0 M$1.5 M$1.0 M$0.5 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.

-$0.5 M-$1.0 M-$1.5 M-$2.0 M
InitialYear 1

Year 2

Year 3

Cash Flow Analysis (Risk-Adjusted Estimates)
Present
Value

InitialYear 1

Year 2

Year 3

Total($12,758)($1,526,999)($1,514,583)($1,587,955)($4,642,295)($3,845,714)

Total benefits$0$2,061,759$2,165,765$2,274,222$6,501,746$5,372,872

Net benefits($12,758)$534,760$651,182$686,266$1,859,451$1,527,158

Total costs

ROI
Payback period(months)

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

40%
<6

27

Appendix A: Total Economic
ImpactTotal Economic Impact is a methodology developed

PRESENT VALUE (PV)by Forrester Research that enhances a company’s

The present or current value oftechnology decision-making processes and assists(discounted) cost and benefit estimatesvendors in communicating the value proposition of

given at an interest rate (the discounttheir products and services to clients. The TEIrate). The PV of costs and benefits feed

methodology helps companies demonstrate, justify,

into the total NPV of cash flows.

and realize the tangible value of IT initiatives to bothsenior 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 madeof the effect of the technology on the entire

unless other projects have higher NPVs.

organization.
Costs consider all expenses necessary to deliver the

RETURN ON INVESTMENT (ROI)

proposed value, or benefits, of the product. The cost
category within TEI captures incremental costs overA project’s expected return inthe existing environment for ongoing costs

percentage terms. ROI is calculated byassociated with the solution.

dividing net benefits (benefits less costs)
by costs.

Flexibility represents the strategic value that can beobtained for some future additional investmentbuilding on top of the initial investment already made.

DISCOUNT RATE

Having the ability to capture that benefit has a PV
that can be estimated.

The interest rate used in cash flow
analysis to take into account theRisks measure the uncertainty of benefit and costtime value of money. Organizations

estimates given: 1) the likelihood that estimates will

typically use discount rates between

meet original projections and 2) the likelihood that

8% and 16%.

estimates will be tracked over time. TEI risk factors
are based on “triangular distribution.”
PAYBACK PERIOD
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 WINDOWS 365

The breakeven point for an investment.
This is the point in time at which net
benefits (benefits minus costs) equal
initial investment or cost.

28

Appendix B: Supplemental Material
Cost Savings Through BYOPC Enablement (No Stipend)
Ref.

MetricSourceYear 1

Year 2

Year 3

XX1

Avoided laptops for contractors

Composite

600

630

662

XX2

Cost of standard laptop

Interviews$1,500$1,500$1,500XX3

Shipping cost per device

Interviews

$100

$100

$100

XXt

Cost savings through BYOPC enablement (nostipend)

XX1*(XX2+XX3)$960,000$1,008,000$1,059,200

Risk adjustment↓15%$816,000$856,000$900,320

XXtr

Cost savings through BYOPC enablement (Nostipend) (risk-adjusted)
Three-year total: $2,573,120

Three-year present value: $2,126,341

Windows 365 Subscription Costs
Ref.

MetricSourceInitialYear 1

Year 2

Year 3

XX1Standard user cost per monthInterviews

$41

$41

$41

XX2

Premium user cost per monthInterviews

$66

$66

$66

XX3

Contractors using Windows 365

Composite

2,000

2,100

2,205

XX4

Subtotal: Annual Windows 365 licensing costs
for contractors

12*XX1*XX3$984,000$1,033,200$1,084,860

XX5

Employees acquired each year

Composite

150

158

166

XX6

Subtotal: Windows 365 licensing costs foracquired employees

2*XX1*XX5$12,300$12,956$13,612XX7Power users

Composite

500

525

551

XX8

Subtotal: Improved contractor productivity
through self-service

12*XX2*XX7$396,000$415,800$456,392

XXt

Windows 365 subscription costs

XX4+XX6+XX8$0$1,392,300$1,461,956$1,534,864

Risk adjustment

0%$0$1,392,300$1,461,956$1,534,864

XXtr

Windows 365 subscription costs (risk-adjusted)
Three-year total: $4,389,120

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

Three-year present value: $3,627,121

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Appendix C: Endnotes
1 Source: “Tackle Your Digital Workplace Challenges With Forrester’s Scenario Quick Start Cards,” Forrester

Research, Inc., December 22, 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: “Master The Messy Middle Of Hybrid,” Forrester Research, Inc., September 28, 2022
4 Source: “The Forrester Tech Tide™: End-User Computing, Q1 2023,” January 27, 2023

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

30

THE TOTAL ECONOMIC IMPACT™ OF WINDOWS 365

31