Reduced Data Center Cost

Evidence and data. Interviewees noted that the IBM Cloud for VMware solutions investment gave their organizations the ability to move critical workloads from on-premises data centers to the cloud without having to repurchase or change their tools as part of the investment. In turn, interviewees’ organizations could consolidate on-premises infrastructure, reducing the need for large capital expenditures on hardware, the cost of software needed to manage sensitive data, the cost of power and cooling, and additional expenditures for disaster recovery sites.

• The IT manager at a public services organization said: “It was reaching the time where we would either have to replace our servers or pay for additional maintenance on them, and I realized moving to the cloud was just cheaper, as we could stop worrying about replacing hardware. As a VMware shop, IBM Cloud made that transition seamless.” This interviewee’s organization saved more than $300,000 per year in capex from not having to house an on-premises environment.

• The VP of IT at a healthcare organization said: “I can easily scale capacity up and down with IBM Cloud when there is seasonality or if we suddenly get an influx of new clients. We always have to plan for that in your on-premises environment, and the worst thing is you never know when it’s coming. As such, you must oversubscribe for infrastructure, and 90% of the time that infrastructure goes unused. We’re saving at least 20% per year of what we used to spend from this benefit, in terms of infrastructure, heating, cooling, and electricity.”

• The cofounder of a cybersecurity organization explained: “With IBM Cloud, we get more frequent upgrades, the availability of additional services, and geographic redundancy. We also don’t have to think about getting the most value out of capital expenditure; if something new comes along, we can migrate easily at the same cost and easily take advantage of things that would offer more value.”

Modeling and assumptions. For the composite organization, Forrester assumes the following:

• In Year 1, the composite organization achieves a 30% cost savings for workloads migrated to the cloud. This increases to 40% by Year 3 as the composite migrates more workloads.

• The total cost avoided is included in the calculation and is offset by the IBM Cloud for VMware solutions cost detailed in the Analysis Of Costs section to properly consider the net savings achieved in the analysis results.

Risks. Reduced data center costs may vary depending on the following:

• The size and scope of IBM Cloud deployment.

• The size and scope of legacy state deployment.

• The ability and willingness of organizations to move to the cloud.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.5 million.

Increased Operational Efficiency

Evidence and data. The interviewees’ organizations reduced the internal effort required to manage workloads and hardware compared to the legacy environment due to the performance and reliability improvements delivered by IBM Cloud for VMware solutions. Interviewees noted their organizations achieved efficiencies in procurement, provisioning, maintenance, support, and disaster recovery as a result. Also, with root access control down to the hypervisor layer, the operations team at interviewees’ organizations could manage workloads using the same tools as before, requiring no new skills or major training. By bringing operations into the cloud, staff focused on higher-value tasks.

• The technology officer at a financial services company explained: “In our on-premises environment, we would have to wait months for the server to arrive. Now I can set up and provision a bare metal in a couple of hours.”

• The VP of IT at a healthcare organization said: “The amount of time people were spending on maintaining the resources was exorbitant, but with IBM Cloud, working on things like patching and upgrading has reduced a lot. Also, increasing the capacity of a server was a big task earlier. If we wanted to increase storage, we had to file a request, get the approvals, and add the hardware. This task, which was taking two months previously, now takes a few clicks.” Their healthcare organization reduced the workload of operational resources by 60% to 80% as they transitioned more workloads to IBM Cloud.

• The IT manager at a public services organization shared: “We’ve seen a reduction in IT tickets because there aren’t people complaining about an application down because it’s not going down anymore. And then within the infrastructure environment, we had issues every week around the cables, switches, anything. With IBM, the only issues that we have are made by ourselves.”

• The same interviewee explained: “Our on-premises backups used to take hours to configure to make sure they were seamless and secure. This has become simpler in IBM Cloud because a lot of it is taken care of for you. There are efficiencies in building it, automating it, and not having to do it again and again since IBM has set best practices on how to do it. With IBM Cloud, we save at least 3 hours of effort per day around scheduling, configuration, and replication of backups, and having to revisit failed ones being replicated.

Modeling and assumptions. For the composite organization, Forrester assumes the following:

• In the legacy environment, the composite organization required up to eight FTEs by Year 3 to manage the VMware workloads.

• With IBM Cloud, two FTEs manage the same number of workloads.

• The average fully loaded annual salary for impacted FTEs is $130,000.

• In Year 1, 50% of the benefits are achieved as the composite organization is actively migrating workloads throughout the year. This increases to 75% in Year 2 and 100% in Year 3, as all workloads are migrated.

Risks. Increased operational efficiency may vary depending on the following:

• The size, scope, and complexity of existing workloads.

• The number of workloads migrated to IBM Cloud.

• The level of automation achieved through leveraging IBM and VMware tooling.

• The salaries of FTEs.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV of $1.2 million.

Increased Compliance And Security Efficiency

Evidence and data. Interviewees noted that built-in compliance features allowed their organizations to reduce internal efforts and expenditures on resources needed to maintain proper governance of sensitive information.

• The IT manager at a public services organization shared, “Having IBM, who has all the cloud and compliance certifications we need, built-in cloud security, disaster recovery planning, and business continuity capabilities, makes it much easier when it comes to working with auditors, as they can see we have a really good vendor behind us that checks are the boxes they’re looking at.”

• The VP of IT at a healthcare organization explained: “Audits have become much more efficient because we know and are much more confident things are well documented with IBM Cloud for VMware solutions. When it comes to internal and external audits, the workload is 25% of what it used to be for compliance teams. And if you think about the amount of time IT spent to provide the information and provide the clarifications if there are concerns, they are also now spending 5% of the time they used to.”

Additionally, access to IBM’s security partners through integrations with IBM Cloud for VMware solutions led to simpler security administration, better visibility, and reduced costs. With root access control, the admins at the interviewees’ organizations could control security policies, including being able to fully isolate instances from the public internet.

• The IT manager at a public services organization said: “We did around 10 patching cycles a year. We can avoid those for the workloads moved to or created on IBM Cloud, which saves us at least 15 hours on a quarterly basis.”

• The technology officer at a financial services organizations explained, “Because we are not the owners of the machines, we don’t have to spend all of our time searching for new fixes and installing these fixes.”

Modeling and assumptions. For the composite organization, Forrester assumes the following:

• The FTEs that would have been required to manage compliance and security tasks associated with the increasing VMware workloads in the legacy environment would have grown from four in Year 1 to five in Year 3.

• Migrating VMware workloads to IBM Cloud reduces the effort needed to manage compliance and security tasks by 60%.

• The average fully loaded annual salary for compliance and security FTEs is $139,000.

• In Year 1, 50% of the benefits are achieved as the composite organization is actively migrating workloads throughout the year. This increases to 75% in Year 2 and 100% in Year 3, as all workloads are migrated.

Risks. Increased compliance and security efficiency may vary depending on the following:

• Security and compliance requirements.

• The ability to leverage IBM’s and IBM partners’ security tools to streamline security tasks.

• The available capacity and skill set of security and compliance FTEs.

• The salaries of FTEs.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV of $663,000.

Reduced Downtime

Evidence and data. IBM Cloud for VMware solutions improved the performance of environments at the interviewees’ organizations through improved availability with more reliable and modern hardware. Interviewees mentioned that if there was a downtime event, their organizations found it easier to recover than ever before, which impacted internal operations as well as customer experience.

• The cofounder of a cybersecurity organization told Forrester: “Our ability to keep things operating and keep the clients up is significantly higher because we can constantly upgrade to the latest IBM Cloud is offering and use VMware to migrate with no downtime our customers to the new hardware. As a result, for the same cost for the customer, we can deliver increased performance over time. They’re always getting the latest.”

• The same interviewee added: “With VMware and its control and the flexibility we have with our infrastructure through IBM Cloud, our security team is a lot more confident that there isn’t going to be a disruption. And for what we do, not having constant availability is not acceptable.”

• The VP of IT at a healthcare organization explained: “If something happened to our data center or our servers during business hours, applications are down and business groups cannot work. There was a loss of productivity, and those business group leaders were then always mad at IT. They would complain that they can’t meet their targets because applications were down for 8 to 10 hours a month. And then, if it’s something related to our call center, it’s also affecting patient experience. With IBM Cloud, downtime events have reduced by 90%. And if it happens, the impact isn’t as large scale. This led to a less strained relationship between business and IT.”

• The IT manager at a public services organization stated: “One of our mission critical environments as a very large database server has 3 TB in it. That server can take us a good 3 hours to work on when we do our failover testing for a disaster recovery plan, which entails moving data to the VMware console on the other side and restoring the server. In IBM Cloud, that same test could take us an hour. So, the recovery time is quicker, probably by 50%, partly because we don’t have to move data from one location to the other, which is nice. We haven’t had a major disaster, but if we did, this is a huge win.”

• The technology officer at a financial services organization said: “When we have a downtime issue in our IBM Cloud for VMware environment, which is not often, the downtime is 70% of what it would have been because it used to take a long time to replace the hardware. That’s not an issue anymore.”

Modeling and assumptions. For the composite organization, Forrester assumes the following:

• The composite organization experienced 10 downtime events per year in its prior environment.

• The number of downtime events per year reduces by 90% once the environment is fully migrated to IBM Cloud.

• The cost per downtime event, including the time and cost of repairs and the cost of lost business, averages $50,000.

• The time to resolve remaining downtime events is reduced by 70% in the IBM Cloud environment.

• In Year 1, 50% of the benefits are achieved as the composite organization is actively migrating workloads throughout the year. This increases to 75% in Year 2 and 100% in Year 3, as all workloads are migrated.

Risks. Reduced downtime may vary depending on the following:

• The frequency, duration, and underlying causes of the prior disruptions.

• The ability of IT personnel to remediate service disruptions.

• Downtime costs are highly variable between organizations and industries. Some industries, like financial services, will have higher costs of downtime that are easier to measure and track, while other industries may not be able to easily correlate downtime with lost business. Some organizations may build out more robust redundancies while others may not be willing to incur as much expense in this area.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of $797,000.

Increased Developer Productivity

Evidence and data. Interviewees noted their organizations used Red Hat OpenShift to innovate freely and extend workloads using containers. Developers spent time on application modernization and moving legacy applications to the cloud to innovate and add more services to make end users happier. Developers also deployed net-new workloads to the cloud. As IBM Cloud supported rapid application development and testing, key outcomes included faster time to market and increased release frequency.

• The technology officer at a financial services organization said: “Developers are seeing a reduced number of activities that they are responsible for. They no longer have to worry about the physical infrastructure, the procurement fees, or any of those aspects related to hardware. It frees them up to focus on other tasks and allows them to put more automation scripts in place where they can automate the deployment of certain VMs into our environment.”

• The VP of IT at a healthcare organization explained: “I haven’t reduced my development team, it’s just the same amount of folks that I have now can do more. They’re able to support more applications and build new applications so I don’t have to hire more people for development. And on top of that, morale has increased because there are less performance issues and things can get done faster.”

• The same interviewee went on to share: “With IBM Cloud, the best thing is we don’t have to worry about freeing up server resources. Each developer can also have their own environment, rather than sharing an environment with different teams. So we don’t have the issue where, ‘Okay because that team is doing UAT [user acceptance testing], nobody can touch that server for next week or 10 days now.’ If someone needs servers to run something, others no longer need to wait and coordinate their schedules around it due to limited resources. And, with cloud being a consumption-based model, whether you’re using 10 servers versus 20 servers, the cost difference is minimal.”

• Developer productivity also increased at the interviewees’ organizations due to the simplification of security and compliance tasks by deploying IBM Cloud for VMware solutions. The IT manager at a public services organization stated, “The effort needed for mundane tasks like security and compliance reduced by at least 20% in our new environment.”

Modeling and assumptions. For the composite organization, Forrester assumes the following:

• In Year 1, 30 developers use RedHat OpenShift on IBM Cloud, increasing to 50 developers by Year 3.

• Initially, the productivity improvement averages 20% and increases to 40% by Year 3 as developers become more familiar with Red Hat OpenShift and more VMware workloads are moved to IBM Cloud.

• The average fully loaded annual salary of a developer is $135,000.

• Forrester conservatively estimates that 50% of the total time saved per developer FTE is applied directly back to value-generating tasks, and it is therefore included in the benefit calculation. Individual employees may apply additional time savings toward professional development, training, and work-life activities that are not included in the benefit analysis.

Risks. Increased developer productivity may vary depending on the following:

• The ability of developer teams to leverage Red Hat OpenShift in their work.

• The size, scope, and complexity of the workloads being deployed or extended.

• The available capacity and skill set of the developers.

• The salaries of FTEs.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of $1.8 million.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Optimized performance and improved customer satisfaction. With deep access to root configuration and a catalog of configuration options, interviewees noted their organizations could customize workloads based on their needs. Additionally, with high availability of mission-critical applications and the mitigation of outages with IBM Cloud, the interviewee’s organizations saw improvements in customer confidence and brand integrity.
  The cofounder of a cybersecurity organization said: “By doing it all from scratch, we’re able to optimize our environment and make sure that our customers are getting the best performance. Also, IBM Cloud allows us to offer our customers native access to low-cost cold storage, which is another plus for them.” The technology officer of a financial services organization remarked, “Using IBM Cloud for VMware in our lower environment allows us to deploy more applications faster to customers, which improves their overall experience.” The VP of IT at a healthcare organization explained, “We definitely noted a reduced number of complaints from customers because systems are down less often.”

• Access to IBM support. IBM provides its customers with access to expertise and guidance on how to make the most of their investment in IBM Cloud for VMware solutions. The cofounder of a cybersecurity organization explained: “The subscription to IBM Cloud comes with a bonus of access to experts who are available and willing to help. This was not always the case when it came to the vendor in our previous setup.” The IT manager of a public services organization also highlighted the level of support seen with IBM, stating: “Their support was one of our drivers for selecting them. They always have the expertise if you need it, and we’ve never had a bad experience working with them.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement IBM Cloud for VMware solutions and later realize additional uses and business opportunities, including:

• The door-to-digital transformation. Interviewees noted their organizations added new or better cloud services, including for backup, replication, and disaster recovery, by using some of the operational and infrastructure cost savings to invest in additional capabilities offered by IBM or IBM partners. Additionally, migrating to IBM Cloud enabled the interviewees’ organizations to be better positioned to take on other improvement initiatives through digitization. The VP of IT at a healthcare organization said: “Internally, things are set up according to best practices and are therefore more streamlined. It allows use to be more agile and flexible in terms of setting up something new in the cloud.”

• Improved scalability. Interviewees noted that migrating VMware workloads provided their organizations with the ability to easily expand or reduce their storage needs as business requirements or demands evolve. The technology officer at a financial services organization explained: “We can scale out as needed and when we need it in the future because we no longer have to deploy underlying hardware infrastructure every time we scale. Everything is more automatic in IBM Cloud, so we could essentially expand overnight if we needed to.”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).