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ThImLin
he Tompact
nux E
tal Ec™ Of
Enterp
conomf SUSprise
A F
Imp
Co
SU
mic E
Forrester Total E
pact™ Study
ommissioned By
USE
Economic
y
Project Direct
Dean Davison
October 2014
or:
n
Tabl
Execut
Disclos
TEI Fra
Analys
Financ
SUSE:
Appen
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IGURE 1
inancial Sum
Return onvestme5%
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Summaryned Forrester ™ (TEI) study ent (ROI) that Linux Enterpriss with a framewf SUSE Linux
and the benefiustomers usind to migrate adardize on x86ntaining serverviewed plannrprise, retraineant decrease i
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ABLE 1
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ital Expendit
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ves. Readers madoption of clo
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ntified benefit
86 servers anngs realized b
avings dependavailable while
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including repl in an annual
evels of savingrisk-adjusted ae than $19.4
Calculation
A1*20%
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ts in this case
nd reduced itsby the companded on how exe others purch
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he number of sture to derive
lacements, upsavings of m
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n Year 1
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$2
$11
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$6,498,0
e study. The o
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rdizing on x86by 5%. The rihe section on
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3,000
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rganization:
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proved respotual servers, uanged the res
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earch, Inc.
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ty to hire andand the profesaccess to syst
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nce costs for s
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l purchase priusts the benef7 million over
Calculation
A3*9%
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B1*(B2-B3)
n, Forrester d
ds. The ability on templates,
onths to minute
rators. The coe than UNIX pganization has
y. The IT direntinuity of buspt a higher-lev
nization pays mne assistance9% rate to calc
total of more
ice of a servefit down by 5%three years.
n Year 1
3
$1
$
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$2,924,1
ocumented ad
of the IT orga and by provides” for the glo
omposite orgaprofessionals.s not quantifie
ctor at the glosiness, as the vel disaster co
maintenance . While the feeculate the mathan $9.2 mil
r, Forrester us%. The result
1 Ye
3,000
1,283
$257
8,000 $3
5%
100 $2,9
dditional bene
anization to deding a single obal energy co
anization has Although the
ed the value of
obal banking cLinux platformontrol system
fees to the haes for mainten
aintenance cosllion over thre
ses the sameis an annual r
ear 2
3,000
$1,283
$257
3,078,000
924,100
efits that cann
eploy serverspoint of contaompany.
better access interviewed cf this benefit.
company told m is very stab.”
9
ardware nance range sts for this e years.
risk risk-adjusted
Year 3
3,000
$1,283
$257
$3,078,000
$2,924,100
not be
, including act literally
s to system companies
Forrester, ble. We were
Tota
TableOver
TA
To
Re
A
B
Source
l Benefits
e 4 shows ther three years,
ABLE 3
otal Benefits
ef.
Atr Reduceservers
Btr Reduceservers
Total b
e: Forrester Rese
e total of all bethe composite
s (Risk-Adjus
Benefited capital exps ed maintenans
benefits
earch, Inc.
enefits across e organization
sted)
t penditures for
nce costs for
the areas listn expects risk-
Year 1
$6,498,00
$2,924,10
$9,422,10
ed above, as -adjusted tota
Year
00 $6,498
00 $2,924
00 $9,422
well as preseal benefits to b
r 2 Ye
8,000 $6,4
4,100 $2,9
2,100 $9,4
ent values (PVbe a PV of mo
ear 3
498,000 $1
924,100 $
422,100 $2
Vs) discountedore than $23.4
Total
9,494,000
$8,772,300
28,266,300
10
d at 10%. 4 million.
Present Value
$16,159,564
$7,271,804
$23,431,368
COS
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ernal labor to
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icense Fees
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ganization exp
SUSE Linux
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onal services.
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as standard psulting in a ris
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xperienced sim$4.5 million a
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inux Enterpris
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To Architect
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ost Of Profes
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ABLE 7
ost Of Profes
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Education Fo
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er of system a
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ssional Serv
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ation engagedionals for 90 d
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d consultants fdays at an ave a risk-adjuste
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Year 2
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Year 2
13
e composite addition, eachng is $3,500 anies,
Year 3
chitecture, $1,200 per he three
Year 3
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ABLE 8
otal Costs (R
f. C
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r Training aeducationadministr
r Cost of pservices
Total cos
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e total of all cozation expects
Risk-Adjusted
Cost fees for nux e abor to and to SUSE terprise and n for system rators rofessional
ts
earch, Inc.
osts as well ass costs to tota
d)
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$1,102,500
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s associated pl more than $
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0
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present values17.5 million.
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,970 $4,5
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ar 2 Y
541,970 $4
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at 10%. Over
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r three years,
Total
13,625,910
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17,550,810
14
the
Present Value
$11,295,207
$2,164,909
$1,503,409
$113,400
$15,076,925
FLEX
Flexibeneinitiatand lspec
› SU“Wgov
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RISK
Forreis thecostsmet brange
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TA
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XIBILITY
bility, as definefit for some futives but not tater realize adific project (de
USE ManagerWe fluidly shift
vernment age
pen source conux Enterpriseailable to clienurce culture, oers also help
KS
ester defines te risk that a prs than anticipaby the investme of outcomes
ntitatively capte meaningful aoriginal estimaealistic” expec
ABLE 9
enefit And C
nefits
duced capital
duced mainten
sts
ense fees for S
ernal labor to a
ining and edu
st of professio
e: Forrester Rese
ned by TEI, reuture additionahe obligation dditional usesescribed in mo
r. SUSE Manapeople from h
ency.
ommunity. Te is a wonderfnts. We benefour products aus know how
two types of riroposed invesated. Impact rment in SUSEs for cost and
turing implemand accurate eates, and they ctations since
Cost Risk Adj
expenditures
nance costs fo
SUSE Linux E
architect and t
cation for sys
onal services
earch, Inc.
presents an inal investmentto do so. The
s and businesore detail in A
ager is an effehardware to m
he IT directorful platform befit from the opare updated fato better get v
isk associatedstment in SUSisk refers to th, resulting in lbenefit estim
mentation risk aestimates andaffect benefit they represe
justments
for servers
or servers
Enterprise
transition to S
stem administr
nvestment in a. This providere are multiples opportunitie
Appendix A).
ective tool thatmanage middle
r at the bankinecause it is a fpen source comaster and the value out of th
d with this anaSE may deviathe risk that theower overall tates.
and impact risd a more accuts by reducingnt the expecte
SUSE Linux E
rators
additional capes an organizae scenarios in
es. Flexibility w
t reduces a nueware and da
ng company tofully open soummunity and quality is bett
he products.”
alysis: “implemte from the ore business ortotal benefits.
sk by directly aurate projectiog the original eed values con
nterprise
pacity or capaation with the n which a custwould also be
umber of manatabases,” said
old Forrester, urce platform, culture from S
ter because th
mentation riskriginal or exper technology nThe greater t
adjusting the on of the ROI.estimates. Thensidering risk.
ability that cou“right” or the atomer might c
e quantified wh
nual activities d the IT direct
“From the uswhich means
SUSE Linux. hey come from
k” and “impactected requiremneeds of the othe uncertaint
financial estim In general, rie risk-adjuste
Adjustment
5%
5%
Adjustment
1%
5%
5%
5%
uld be turned iability to engachoose to imphen evaluated
for system adtor at a nation
er’s perspectis that more soBecause of th
m a communit
t risk.” Implemments, resultinorganization mty, the wider th
mates results sks affect cos
ed numbers sh
15
nto business age in future plement SUSEd as part of a
dministrators. nal
ive, SUSE olutions are he open ty. The other
mentation risk ng in higher may not be he potential
provides sts by raising hould be taken
E
n
FinThe fperiovalueunad
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TA
Ca
Cos
Ben
Net
ROI
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nancial Sfinancial resul
od for the orgaes. These valudjusted results
IGURE 3
ash Flow Ch
e: Forrester Rese
ABLE 10
ash Flow (Ri
sts
nefits
benefits
I
yback period
e: Forrester Rese
($8,0
($6,0
($4,0
($2,0
$2,0
$4,0
$6,0
$8,0
$10,0
$12,0
Cas
h F
low
summarylts calculated
anization’s invues are determs in each relev
hart (Risk-Adj
earch, Inc.
isk-Adjusted
Initial
($2,349,90
$
($2,349,90
earch, Inc.
000,000)
000,000)
000,000)
000,000)
$0
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000,000
000,000
000,000
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in the Benefitestment in SUmined by appvant Costs and
justed)
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00) ($6,116
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00) $3,30
Total C
ts and Costs sUSE. Table 10lying the risk-d Benefits sec
r 1 Y
6,970) ($
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5,130 $
Year 1
Costs T
sections can b0 below showadjustment vaction.
Year 2
4,541,970)
$9,422,100
$4,880,130
Total Benefits
be used to dews the risk-adjualues from Ta
Year 3
($4,541,97
$9,422,1
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Year 2
Runnin
termine the Rusted ROI, NP
able 9 in the R
To
70) ($17,5
00 $28,2
30 $10,7
Y
ng Total
ROI, NPV, andPV, and payb
Risks section t
tal Pr
550,810) ($
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715,490
Year 3
16
d payback ack period to the
resent Value
$15,076,925)
$23,431,368
$8,354,443
55%
8.5 months
SUThe fofferi
A pioenterunrivmissislashsucce
SE: Ovefollowing inforngs.
oneer in open rprises greatevaled partner eion-critical serh downtime, beed—today a
rview rmation is prov
source softwaer control and ecosystem wervices across uild a private nd tomorrow.
vided by SUS
are, SUSE proflexibility. With
e help thousanphysical, virtucloud, expand For more info
SE. Forrester h
ovides reliableh more than 2nds of customual and cloud d to a public cormation, visit
has not valida
e, interoperab20 years of enmers manage c
environmentscloud and mort www.suse.co
ated any claim
ble Linux and ngineering exccomplexity, res. Whether there, we deliver om.
ms and does n
cloud infrastrcellence, exceeduce cost aney want to mir the smarter i
not endorse S
ucture solutioeptional servicnd confidently grate from UNnnovation the
17
USE or its
ons that give ce and an deliver
NIX to Linux, ey need to
AppTotalmakiTEI mmana
The T
BEN
Beneprojethe eweighthe ethe sbetwebene
COS
Costsmay expeover creat
FLEX
Withithe pinvesinitialpotenfeatuinvesestim
RISK
Riskswaysestimto thebene
pendix Al Economic Imng processes
methodology hagement and
TEI methodolo
EFITS
efits representect. Often, proeffect of the teht on the mea
entire organizapecific value teen the meas
efit estimates t
TS
s represent thincur costs in nses necessathe existing eted.
XIBILITY
in the TEI metprimary way tostment. Flexibl investment antially increasre may transl
stment in trainmated. The flex
KS
s measure thes: 1) the likelihmates will be me values enterefit.
A: Total Empact is a mets and assists vhelps companother key bus
ogy consists o
t the value deduct or projecchnology on t
asure of benefation. Calculatthat is createdsurement and tie back direct
he investment the form of fu
ary to deliver tenvironment fo
thodology, diro justify a projebility representalready made.e standardizaate to greater
ning at some fxibility compo
e uncertainty ohood that the cmeasured andred. At a minim
Economithodology devvendors in comnies demonstrsiness stakeho
of four compo
livered to the ct justification the entire orgafits and the mtion of benefitd. In addition, justification o
tly to the botto
necessary toully burdened the proposed or ongoing cos
rect benefits reect, Forrester ts the value th. For instanceation (to increar worker produuture point. H
onent of TEI ca
of benefit andcost and bened tracked overmum, three va
c Impactveloped by Fommunicating trate, justify, anolders.
onents to eval
user organizaexercises focanization. Theeasure of cost estimates invForrester also
of benefit estimom line.
o capture the vlabor, subconvalue. In addsts associated
epresent one believes that
hat can be obte, an investmease efficiencyuctivity if activ
However, havinaptures that v
cost estimateefit estimates r time. TEI appalues are calc
t™ Overvorrester Reseathe value propnd realize the
uate investme
ation — IT andcus just on IT ce TEI methodosts, allowing fovolves a clearo requires tha
mates after the
value, or benentractors, or mition, the costd with the solu
part of the invt organizationstained for soment in an enter) and reduce
vated. The colng the ability tvalue.
es contained wwill meet the plies a probabculated to esti
view arch that enhaposition of the tangible valu
ent value: ben
d/or businesscost and cost ology and theor a full examr dialogue withat there be a ce project has
efits, of the promaterials. Cost category withution. All costs
vestment valus should be a
me future addirprisewide upglicensing costlaboration canto capture tha
within the inveoriginal projecbility density fumate the und
ances a compeir products aue of IT initiativ
nefits, costs, f
s units — by tht reduction, leae resulting finaination of the h the user orgclear line of acbeen comple
oposed projecsts consider alhin TEI capturs must be tied
ue. While direble to measuritional investmgrade of an ots. However, an only be useat benefit has
estment. Uncections and 2) unction knowerlying range
pany’s technond services toves to both se
flexibility, and
he proposed paving little roo
ancial model peffect of the t
ganization to uccountability eted. This ensu
ct. IT or the bull the investmeres any incremd to the benef
ct benefits care the strateg
ment building office productivan embedded
ed with additioa PV that can
ertainty is methe likelihoodn as “triangula around each
18
logy decision-o clients. The enior
risks.
product or om to analyzeplace equal technology onunderstand established ures that
usiness unitsents and mental costs fits that are
an typically be ic value of anon top of the vity suite cand collaborationnal
n be
easured in two that the ar distribution cost and
-
n
n
o
”
AppDiscotheir 10% Readown e
Net pdiscohighe
Presdisco
Paybequa
Retunet b
A NO
The fcolumin yeatotal inves
Sumssome
TA
Ex
Re
Source
pendix Bount rate: Thown discountfor this analys
ders are urgedenvironment.
present valueount rate). A per NPVs.
ent value (PVount rate). The
back period: al initial investm
urn on investmbenefits (bene
OTE ON CAS
following is a mn contains cars 1 through cost and bene
stment and the
s and presente rounding ma
ABLE [EXAM
xample Table
ef.
e: Forrester Rese
B: Glossahe interest ratet rate based osis. Organizatd to consult th
e (NPV): The positive projec
V): The presee PV of costs
The breakevement or cost.
ment (ROI): Afits minus cos
H FLOW TAB
note on the caosts incurred 3 are discoun
efit estimate. e discounted
t value calculaay occur.
MPLE]
e
earch, Inc.
ary e used in cashn their businetions typically
heir respective
present or cuct NPV norma
ent or current vand benefits f
en point for an
A measure of sts) by costs.
BLES
ash flow tableat “time 0” or nted using theNPV calculaticash flows in
ations for the T
Metric
h flow analysiess and invest
use discounte organization
urrent value oflly indicates th
value of (discofeed into the t
n investment.
a project’s ex
es used in thisat the beginn
e discount rateons are not ceach year.
Total Benefits
s to take into tment environt rates betweens to determin
f (discounted) hat the investm
ounted) cost atotal NPV of c
This is the po
xpected return
s study (see thning of Year 1e at the end oalculated unti
s, Total Costs
Calculatio
account the tnment. Forresten 8% and 16e the most ap
future net cament should b
and benefit escash flows.
oint in time at w
n in percentag
he example ta. Those costs
of the year. PVl the summary
, and Cash Fl
on Year
time value of mter assumes a% based on t
ppropriate disc
sh flows givenbe made, unle
stimates given
which net ben
ge terms. ROI
able below). Ts are not discoV calculationsry tables are th
low tables ma
r 1 Y
money. Compa yearly discotheir current ecount rate to u
n an interest ress other proj
n at an interes
nefits (benefits
is calculated
The initial inveounted. All oths are calculatehe sum of the
ay not exactly
Year 2
19
panies set ount rate of environment. use in their
rate (the ects have
st rate (the
s minus costs
by dividing
stment her cash flowsed for each e initial
add up, as
Year 3
s)
s
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