The Total Economic Impact™ Of F5 Distributed Cloud Services
Cost Savings And Business Benefits Enabled By Distributed Cloud Services
A Forrester Total Economic Impact™ Study Commissioned By F5, July 2024
As the networking market faces the most radical changes since the dawn of the ethernet, today’s competitive enterprises increasingly leverage their network infrastructure design to drive business outcomes. Forrester’s research indicates that modern networking capabilities, including cloud, IOT and virtualization, make right now one of the most exciting times ever to be in cloud networking. Getting cloud networking strategies right early on can well position organizations for these seismic networking changes to come.1
F5 Distributed Cloud Services simplify multicloud networking and application security across distributed environments by offering an integrated service stack that securely connects networks and application workloads. The cloud-native platform offers application and API security services, networking, and other services designed to improve application performance and security across hybrid and multicloud environments.
F5 commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study that examines the potential return on investment (ROI) enterprises may realize by deploying Distributed Cloud Services.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Distributed Cloud Services on their organizations.
Return on investment (ROI)
121%
Net present value (NPV)
$1.26M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Distributed Cloud Services. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization: a retail organization with a complex operational footprint and increasingly large transaction volumes and network traffic across North and South America seeking the ability to connect and pivot with ease among hyperscale cloud providers.
Interviewees said that prior to using Distributed Cloud Services, their organizations’ legacy applications required multiple cloud environments. With workloads scattered across distributed environments, interviewees complained of a lack of visibility that contributed to excessive troubleshooting and remediation times, injecting additional risk into their organizations. A growing threat landscape marked by malware, bot attacks, and credential stuffing made network traffic difficult to manage, and duplicative security policies across cloud environments were nearly impossible to enforce.
Following their investment in Distributed Cloud Services, the interviewees pointed to how their organizations transformed the digital delivery of their core application and network services across a unified cloud environment. This allowed their organizations to optimize cloud and networking spend, ensure high availability for critical apps, improve productivity, and better position software development lifecycle (SDLC) teams to quickly and securely deliver high-quality software to their customers.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Networking cost savings of 30% from cloud infrastructure optimization. As apps are migrated to the Distributed Cloud Services environment, the composite organization is able to decommission legacy hardware, reduce data center space and vendor tools, and avoid internal and external maintenance for hardware and software that were replaced with F5. The new F5 infrastructure also allows the composite organization to optimize existing tools in its stack, integrate new capabilities that were not supported on the prior infrastructure, and optimize cloud networking spend. In total, the composite organization is able to avoid close to $504,000 in wasteful spending using inadequate infrastructure while improving network efficiency and business agility.
- Avoided 25,000 hours of end-user downtime through incremental improvement of core network services availability of over 1.5 percentage points. With the Distributed Cloud Services, the composite organization can ensure a higher level of availability compared with its legacy infrastructure. This improvement helps the composite organization avoid 200 hours of unplanned system downtime, preventing the loss of over $375,000 in revenue, while avoiding nearly 5 hours of employee downtime per FTE over the three-year period, for a total benefit of nearly $778,000.
- More than 7,300 hours of security operations productivity improvements. The composite gains security productivity improvements across the proactive and reactive threat response spectrum. F5 Distributed Cloud Services confer 80% better app protection against bot attacks, a 70% reduction in the mean time to resolve security incidents, and a 30% reduction in security policy inconsistencies and related incidents. This in turn reduces the proactive operational burden for the composite organization’s security team of 12 FTEs. With simplified and centralized security parameter management and avoided security patching, the composite organization’s security operations productivity improvements total more than $453,000 for the composite organization.
- Productivity improvement of 20% for networking FTEs. The composite organization’s networking team of eight FTEs experiences significant time savings and avoids excessive labor to complete manual, error-prone processes. The team makes significant efficiency gains with a centralized multicloud network topology: reducing infrastructure responsibility, lowering network-related support costs and incident remediation, shortening SLAs, and increasing scalability. Together, these productivity improvements total more than $302,000 for the composite organization.
- Five thousand developer hours reattributed to the SDLC through optimization of the environment and security procedures. Once advanced developer tools are supported by Distributed Cloud Services for high availability, low latency, and a more secure production environment, the composite organization enjoys extensive optimizations in cycle times, reduced rework and waste, and improved time to value. It can deliver more software and features that are aligned with their customer requirements in less time, gaining over $261,000 in valuable developer productivity.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Lower infrastructure support costs despite growth in API endpoints and web applications.
- Better monitoring and reporting for both public and private apps.
- Improved employee experience for NetOps and SecOps teams.
- Improved security.
- Reduction of breach remediation costs.
- Improved brand resilience.
- Simplified and centralized security parameter management.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- F5 subscription fees of $740,000. The composite organization’s F5 costs include the Distributed Cloud Services subscription fees for multicloud networking, web app firewall, bot management, and API security.
- Implementation and testing labor costs totaling $224,000. To set up its initial deployment of Distributed Cloud Services, the composite organization dedicates internal resources to the implementation and testing phases. It initiates a proof-of-value effort, followed by initial testing and deployment of an environment connecting one of its cloud instances with its on-premises instance. This configuration is expanded in subsequent years to include an additional cloud environment with supplemental support from third parties.
- Ongoing administration costs of $76,000. The composite organization dedicates approximately 5 hours per week to maintain the initial Distributed Cloud Services environment, increasing slightly year over year as more apps are supported.
The representative interviews and financial analysis found that a composite organization experiences benefits of $2.30M over three years versus costs of $1.04M, adding up to a net present value (NPV) of $1.26M and an ROI of 121%.
Key Statistics
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Return on investment (ROI)
121%
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Benefits PV
$2.30M
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Net present value (NPV)
$1.26M
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Payback
21 months
Benefits (Three-Year)
Cloud infrastructure optimization Improved availability Security operations productivity improvement Networking operations productivity improvement SDLC security optimizationTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Distributed Cloud Services.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Distributed Cloud Services can have on an organization.
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Due Diligence
Interviewed F5 stakeholders and Forrester analysts to gather data relative to Distributed Cloud Services.
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Interviews
Interviewed four representatives at organizations using Distributed Cloud Services to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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Financial Model Framework
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
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Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Disclosures
Readers should be aware of the following:
This study is commissioned by F5 and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Distributed Cloud Services.
F5 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 the meaning of the study.
F5 provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Drivers leading to the Distributed Cloud Services investment
Interviews
| Role | Industry | Region | Public Apps3 |
|---|---|---|---|
| Head of infrastructure | Government | Europe HQ, international operations | 20 |
| Technology manager | Education | Latin America HQ and operations | 7 |
| IT infrastructure manager | Retail | Latin America HQ and operations | 10 |
| Network operations manager | Financial services | North America HQ and operations | 7 |
Key Challenges
Before migrating to Distributed Cloud Services, interviewees discussed how managing their organizations’ legacy environments incurred significant costs. Interviewees noted the challenge of maintaining these environments, even though the infrastructure failed to meet business needs like increasing organizational competitiveness, delivering new engagement models, and securing their organization’s data integrity and production environments. The interviewees noted how their organizations struggled with common challenges, including:
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Complex, sprawling multicloud technology environments and administration costs. Interviewees discussed how their environments and applications were distributed across multiple cloud providers. As their organizations sought to scale to meet business needs, the legacy infrastructure required domain expertise and support for numerous cloud provider tooling. This required them to duplicate network and security efforts across multiple cloud and on-premises instances. Interviewees highlighted the following challenges related to complexity across their technology environments.
- The IT infrastructure manager in the retail industry said that their organization’s complex ecosystem involved many internal and external elements. Their organization cobbled together suboptimal, manual management processes for their complicated legacy infrastructure while lacking the necessary automation to quickly respond to evolving business needs.
- The head of infrastructure at the government organization shared how modern digital transformation could help position their organization for success when done right, but they noted the inherent risks related to the environment’s complexity and how incorrect configurations due to this complexity could drive higher costs.
- Interviewees remarked how the complex technology environments described above contributed to a lack of visibility. Workloads scattered across multiple clouds and distributed sites left infrastructure teams with blind spots that often left their organizations vulnerable to threat actors and unplanned system downtime (see below). This lack of visibility led to lengthy disruptions to troubleshoot and resolve incidents, pulling valuable resources away from key business objectives.
- Excessive unplanned system downtime. Whether caused by misconfiguration or malicious actors, interviewees described how unplanned downtime, including massively disruptive bot attacks, impacted their organizations (see below).
- Mounting security concerns in a dynamic and growing threat landscape. Interviewees’ organizations shared significant challenges related to malicious actors, including malware attacks, increasing onslaughts of bot traffic, and frequently recurring bouts of credential stuffing. Furthermore, the complexity of the prior environment often resulted in inconsistent security policies applied across applications deployed in different environments. Interviewees told Forrester how their organizations faced increasing requirements and scrutiny related to their compliance posture, leading to added costs, complexity, and risk.
- Increasing volumes of credential stuffing from bots. The network operations manager in the financial services industry shared how the excessive traffic introduced by bots impacted their organization’s core network services: “The problem with that [credential stuffing from bots is] it essentially creates a DDoS type of attack, so it can overwhelm your web servers. We had to keep ‘black-holing’ the traffic, which gets complicated because if they keep changing IP addresses, it [becomes] difficult to mitigate that.”
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Limited agility and slow time to market. Interviewees reported that their organizations were experiencing a large growth in transaction volumes but that their systems were not designed to handle these increased levels, which created a significant amount of waste in the prior environment.
- The IT infrastructure manager in the retail industry shared how their organization’s infrastructure could not keep pace with business growth. They shared: “[Our retail organization] has become an entity that transacts more than any bank in the country. That was one of our main challenges because our ecosystem, our infrastructure, and our operating model were designed to be a retail company, not a bank.”
- The head of infrastructure in education shared how their organization’s prior infrastructure stack was not built in a way that allowed it to grow with the company.
Solution Requirements
The interviewees’ organizations searched for a solution that could:
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Centralize, simplify, and optimize network architecture for multicloud environments. Digital transformation was top of mind for many leaders, as interviewees discussed with Forrester. Interviewees sought a solution that would leverage the power of automation to enable their organizations to scale with agility.
- The head of infrastructure in education described the variety of end user types serviced by their infrastructure: “We ended up looking for a solution like F5’s initially [because] we have to deliver products to internal and external end users. The complexity of having a large hybrid infrastructure means that we need a way to centralize the delivery of applications and services, whether web services, applications, ERP, CRM or whatever. So, [we sought] to unify all our clouds and all our on-premises infrastructures from a single channel.”
- The head of infrastructure at the government organization noted that their organization sought to lean more heavily into multicloud networking capabilities. They said: “We were very keen to explore a multicloud environment. Multicloud was kind of deemed as a negative over the last few years because it’s difficult enough to consume services from one cloud provider, let alone have two, and the rest that comes with that, but then also have people with those skills available. But fast forward to today. Multicloud is a very pertinent, a key piece of technology. There’s no hyperscale cloud provider that does the best of everything, and I would rather have the ability to be able to consume or to connect another hyperscale cloud provider or be able to pivot with ease.”
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Increase visibility, portability and scalability. Interviewees described how their organizations sought to enable scalability and grow capabilities to develop products, service offerings, and new lines of engagement.
- The head of infrastructure in education noted that their organization was in need of a multicloud solution that, above all, would intuitively scale to meet the needs of a variety of end user personae across technologies: “The obstacle was that the right solution for us has to be the least intrusive, both technologically and at the user level. At the technological level, we manage a very broad environment where we have different technologies, we have many legacy developments that we do not know exactly how they work.”
Why F5?
The interviewees’ organizations selected F5 as their multicloud solution because it could:
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Centralize application security enforcement. Interviewees discussed F5’s ability to deploy any application within an organization’s cloud environment as a key factor in their organization’s decision to invest in F5’s solution for multiple cloud environments.
- The head of infrastructure in education shared: “[There is an] economic advantage [of having] everything go through one place. All the security parameters are configured within F5, so by having one person to handle that, I can eliminate all that operational burden of securing in the cloud, securing On-Premises, securing wherever it is being published.”
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Deliver on its reputation and relationships. Multiple interviewees indicated that their organizations had preexisting relationships with F5, allowing them to building on a trusted relationship with a proven partner. Furthermore, interviewees noted how their organizations’ partner ecosystem generally ran on F5 technology, serving as external validation of their investment in F5.
- The IT infrastructure manager in the retail industry told Forrester how their organization was able to validate the investment in F5 by conferring with their ecosystem partners. The interviewee noted that it was highly utilized and trusted by its partners in the Latin American financial services industry.”
- The head of infrastructure at the government organization shared that their team had a long-standing relationship with F5 spanning decades. They said: “For me, when engaging with a vendor, it’s all about relationship…there’s that kind of empirical trust that I have with the account team that, I know they understand my landscape, they understand their product, they understand who we are. It’s the nature of the world that we live in, but that vendor-relationship is quite key.”
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Enable functionality at scale. Interviewees discussed how F5 stood out compared with other solutions in terms of scale and capacity.
- The IT infrastructure manager in the retail industry recounted how their previous networking provider admitted that it would not be able to accommodate the increased transactional volume that their organization required, and recommended F5.
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the four interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite is a retail organization headquartered in North America with a complex operational footprint that also extends to Latin America. From its $1 billion in revenues, it dedicates 2% of annual revenue to IT. Of this, 41% of its IT spend is dedicated to infrastructure, with 20% of that budget carved out for networking solutions.
In the prior environment, the composite faced increasing complexity with legacy environments. Applications and workloads scattered across multiple clouds and distributed environments limited visibility and scalability. Inadequate visibility into their environment caused significant labor inefficiencies while prolonging troubleshooting and remediation times.
The composite organization experienced increasing transactional volumes and network traffic that exceeded its legacy architecture’s ability to support. A large part of this traffic came from malicious actors deploying bots for nefarious purposes, such as infecting the SDLC environment with malware and attacking private corporate apps and financial services with bot-driven credential stuffing attacks on a cyclical basis.
This caused frequent and increasing amounts of FTE time across NetOps and SecOps teams to manually manage responses to these incidents across their infrastructure, causing unwanted downtime and labor inefficiencies. Furthermore, apps deployed across the multicloud environment were protected by inconsistent security policies depending on which cloud they were using, driving up the complexity of their environments and making it increasingly difficult to defend against evolving threats.
The organization is expanding, both organically and via mergers and acquisitions, and has established digital transformation and business objectives to provide a more seamless experience for its customers. As part of this goal, it seeks the ability to connect and pivot with ease among hyperscale cloud providers. To meet these objectives, it must redouble its efforts to develop software that improves agility and availability of critical services, as well as scale and improve digital customer experiences.
Deployment characteristics. In the prior environment, the composite had 10 public-facing and private internal apps that were targeted for support on the Distributed Cloud Services platform, with workloads distributed as follows:
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Fifteen percent of the environment was delivered through its on-premises data center:
- One-third comprises highly sensitive workloads that will remain on-premises.
- Two-thirds comprises workloads that are targeted to migrate to one or more clouds.
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Eighty-five percent of the workloads are in the cloud and distributed as follows:
- Forty percent are in one public cloud, including enterprise apps for collaboration, the ERP, and corporate apps.
- Sixty percent are in another public cloud, including complex workloads, virtualizations, advanced developer tools, and customer-facing financial transaction apps.
Throughout the three-year investment, the composite organization supports most of its digital infrastructure with Distributed Cloud Services in a phased approach. Public and private apps are either serviced locally by deploying lightweight software extensions on-premises or in the cloud depending on business and security requirements. At the same time, the composite organization increases its transactional bandwidth consumption year over year in line with its anticipated transactional volume growth.
The composite organization phases its deployment across three years as follows:
- In the initial period through the end of Year 1, the composite organization connects workloads in its on-premises data center to the cloud. This requires the organization to deploy App Connect for multicloud networking purposes. Bot Defense, Web App Firewall (with Threat Campaigns for enhanced signature detection), and API Security are also introduced to provide additional security for its ERP and public-facing applications. At this point, 25% of the target application environment is supported on the Distributed Cloud Services platform.
- In Year 2, the composite organization expands its implementation to include additional apps across its hybrid cloud environment. This expanded configuration includes customer-facing applications that facilitate financial transactions across public and private apps that require high availability, low latency, and consistent security enforcement across API endpoints. The organization increases its investments to account for the increased bandwidth and transactional volume across its sites. The composite organization now supports 45% of its target application catalog on the Distributed Cloud Platform.
- In Year 3, the composite organization expands its coverage to include support for workloads at an additional cloud provider. These include advanced developer tooling, virtualization, and other complex workloads. The investments in App Connect for multicloud networking between workloads increase, as do bandwidth and application security coverage. This brings the coverage for the composite’s target application catalog on the platform to 95%.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Cloud infrastructure optimization | $55,350 | $166,050 | $420,660 | $642,060 | $503,598 |
| Btr | Improved availability | $38,500 | $300,900 | $657,900 | $997,300 | $777,968 |
| Ctr | Security operations productivity improvement | $48,735 | $157,901 | $370,386 | $577,022 | $453,078 |
| Dtr | Networking operations productivity improvement | $32,490 | $105,268 | $246,924 | $384,682 | $302,052 |
| Etr | SDLC security optimization | $0 | $0 | $348,000 | $348,000 | $261,458 |
| Total benefits (risk-adjusted) | $175,075 | $730,119 | $2,043,870 | $2,949,064 | $2,298,154 | |
Cloud Infrastructure Optimization
Evidence and data. Interviewees discussed how their organizations transformed their infrastructure environments with F5. This optimization of the environment manifested in many ways, with all interviewees reporting notable cost savings and benefits like:
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Decommissioned legacy hardware, data center space, and vendor tools. Interviewees described how moving to Distributed Cloud Services reengineered many aspects of their organization for efficiency and agility.
- The IT infrastructure manager in the retail industry shared how their organization decommissioned its VPN and redundant Firewall Cloud systems, as well as static routing functionalities. Distributed Cloud Services helped their organization save over $5 million compared with their legacy networking environment in terms of maintenance contracts, licensing, and reduction in computer equipment. They said: “What we are looking for, for example, with our cloud strategy is to precisely optimize CPU loads in the number of servers we have. And that’s implicitly something that F5’s solution is helping us execute. [This results] in a reduction in operating costs like the amount of hardware, licensing, data center space. … In the last year, we have reduced nearly [$18 million] in terms of maintenance contracts, licensing, and reduction in computer equipment … [with 30% of these savings] thanks to the fact that we have F5.”
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Optimized tech stack. Interviewees detailed ways in which F5 facilitated a more agile tech stack that could leverage best-of-breed infrastructure and containerization tools.
- The IT infrastructure manager in the retail industry recounted how F5 offered valuable integrations: “It was a fairly open integration from a technological point of view. Today, that allows us to play with many brands in the same way. My ecosystem is multibrand, and F5 helps me manage any type of brand, any type of solution.”
- Streamlined cloud spend. The technology manager in education indicated that their organization was able to further translate that heightened infrastructure visibility reduced cloud sprawl and wasteful spend beyond their networking cost optimizations.
Modeling and assumptions. For the composite organization, Forrester assumes:
- The organization’s prior annual networking spend was $1.6 million.
- In Year 1, the composite delivers 25% of its environment by F5 Distributed Cloud Services, increasing to 45% in Year 2 and 95% in Year 3.
- As the composite organization delivers more of its environment through F5, it is able to decommission various other components of its legacy infrastructure environment.
- This serves to optimize the composite organization’s networking spend by 15% in Year 1, 25% in Year 2, and 30% in Year 3.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this benefit:
- The number of apps and the nature of the workloads migrated to Distributed Cloud Services.
- The total reduction in usage of managed service providers or third-party cloud networking tools.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $504,000.
Cloud Infrastructure Optimization
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Networking annual spend in the prior environment (rounded) | Composite | $1,640,000 | $1,640,000 | $1,640,000 | |
| A2 | Percentage of environment delivered by F5 Distributed Cloud Services | Composite | 25% | 45% | 95% | |
| A3 | Percentage of networking spend optimized with F5 | Interviews | 15% | 25% | 30% | |
| At | Cloud infrastructure optimization | A1*A2*A3 | $61,500 | $184,500 | $467,400 | |
| Risk adjustment | ↓10% | |||||
| Atr | Cloud infrastructure optimization (risk-adjusted) | $55,350 | $166,050 | $420,660 | ||
| Three-year total: $642,060 | Three-year present value: $503,598 | |||||
Improved Availability
Evidence and data. With a simplified distributed cloud environment, the interviewees shared how their organizations eliminated several points of failure and improved latency and overall speed, leading to measurable improvements to the availability of critical, consumer-facing apps as well as apps the workers relied on for their day-to-day responsibilities. (Labor savings related to remediating downtime incidents are described in Benefit C, Security Operations Productivity Improvement).
- The IT infrastructure manager in the retail industry noted how F5 is growing the availability of their organization’s services. They said, “The availability of our services grew 2 percentage points, and that’s largely what this high-availability solution is [delivering].”
- The head of infrastructure in education described how Distributed Cloud Services eliminated several points of failure, including the VPN client and firewall, which marred the prior environment with network disruptions. The interviewee told Forrester, “I would say that we were able to lighten around 50% of the problems related to the connection with services [that are now delivered in the F5 environment].”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- In Year 1, the composite delivers 25% of its environment by F5 Distributed Cloud Services, increasing to 45% in Year 2 and 95% in Year 3.
- With F5, the composite organization is able to reduce the unplanned system downtime and stabilize the environment for both critical, consumer-facing apps and for employees during work hours.
- In Year 1, availability improves by 0.5%. This increases to 1.5% and 1.55% in Years 2 and 3, respectively.
Avoided lost revenue with improved availability with Distributed Cloud Services:
- In the prior environment, there was a 0.01% likelihood that unplanned downtime of critical apps would cause revenue loss in the prior environment.
- Due to redundancies built into revenue operations, an hour of downtime has a 20% chance of causing complete revenue stoppage. For each hour of unplanned downtime of critical apps in the prior environment, the composite organization risked losing up to $200 million in annual revenue.
- For critical, consumer-facing apps with 24/7 availability requirements, improved availability with F5 helps the composite organization avoid 11 hours of unplanned downtime of critical apps, increasing to 59 hours recouped in Year 2 and 129 hours in Year 3.
- This benefit impacts 10% of all revenue starting in Year 2, when the composite organization onboards its consumer-facing financial transaction app workflows.
Avoided end-user downtime with improved availability in Distributed Cloud Services:
- The composite organization’s 5,000 total employees had a 5% likelihood that unplanned downtime of critical apps impacted them during work hours in the prior environment, resulting in up to 50,000 hours of unplanned employee downtime over a three-year period.
- Improved availability results in significant reductions in employee downtime. Forrester applies a 50% productivity recapture on these results, reflecting that not all hours recouped will be reattributed to productive work. As a result, the composite organization avoids approximately 25,000 hours of employee downtime, or about 5 hours per employee over the three-year period.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this benefit:
- The number of apps and the nature of the workloads migrated to Distributed Cloud Services.
- The fully burdened rate of troubleshooting resources.
- The total reduction in unplanned downtime with F5.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $778,000.
Improved Availability
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
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| B1 | Cumulative percentage of critical apps delivered by F5 Distributed Cloud Services | A2 | 25% | 45% | 95% | |
| B2 | Cumulative incremental improvement in availability of critical apps | Interviews | 0.50% | 1.50% | 1.55% | |
| B3 | Avoided unplanned downtime of critical apps (hours) | (B1*B2)*8,765 | 11 | 59 | 129 | |
| B4 | Likelihood that unplanned downtime of critical apps impacted revenue in the prior environment | Composite | 0.01% | 0.01% | 0.01% | |
| B5 | Total revenue impacted by unplanned downtime of critical apps in the prior environment with 20% chance of revenue stoppage | Composite | $200,000,000 | $200,000,000 | $200,000,000 | |
| B6 | Percentage of total revenue impacted by improved availability with F5 | Composite | 0% | 10% | 10% | |
| B7 | Subtotal: Avoided lost revenue with improved availability | B3*B4*B5*B6 | $0 | $118,000 | $258,000 | |
| B8 | Total employees | Composite | 5,000 | 5,000 | 5,000 | |
| B9 | Likelihood that unplanned downtime of critical apps impacted employees in work hours in the prior environment | Composite | 5% | 5% | 5% | |
| B10 | Avoided unplanned employee downtime with F5 (hours) | B3*B8*B9 | 2,750 | 14,750 | 32,250 | |
| B11 | Productivity recapture | TEI standard | 50% | 50% | 50% | |
| B12 | Total avoided unplanned employees downtime with F5 (hours) | B10*B11 | 1,375 | 7,375 | 16,125 | |
| B13 | Average fully burdened hourly rate of an end user | Composite | $35 | $35 | $35 | |
| B14 | Subtotal: Avoided employee downtime | B12*B13 | $48,125 | $258,125 | $564,375 | |
| Bt | Improved availability | B7+B14 | $48,125 | $376,125 | $822,375 | |
| Risk adjustment | ↓20% | |||||
| Btr | Improved availability (risk-adjusted) | $38,500 | $300,900 | $657,900 | ||
| Three-year total: $997,300 | Three-year present value: $777,968 | |||||
Security Operations Productivity Improvement
Evidence and data. Interviewees pointed to several aspects of F5 Distributed Cloud Services that streamlined their organizations’ security operations; centralized security polices; mitigated the impacts of security incidents; and secured their organizations’ scalable, distributed environments.
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Reduced breach remediation costs. The simplified and centralized infrastructure, automated networking operations, and improved visibility described above meant that interviewees’ organizations improved their ability to react and respond to breaches or significant, unauthorized access to company data.
- The IT infrastructure manager in the retail industry explained that, by eliminating legacy solutions (see Benefit A), their organization simplified their environment and improved visibility, resulting in significant security operations labor savings of 66% to 75% compared with their previous environment. They told Forrester: “We measure visibility based on the success of the [financial] transaction. Nowadays, when faced with an operational situation, we can realize more quickly where we have the problem and reduce the number of team tasks. [With F5 Distributed Cloud Services, we gained] the ability to realize the problem more quickly. I estimate that before, it took us between 6 and 8 hours, and today, we do it in 2 hours. They are a team of 10 people across security, infrastructure, and networks.”
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Reduced in network-related IT support costs and incident remediation. By improving visibility, reducing complexity, and improving the availability of core network services, interviewees reported cascading impacts across their network support function. By preventing these problems from arising, interviewees reported significant decreases in incidents and related ticket volumes, support times, and the number of resources need to troubleshoot incidents when they arose.
- The IT infrastructure manager in the retail industry shared how improving their organization’s services by 2 points (see Benefit B) led to cascading impacts throughout the IT organization. The interviewee reported that their organization decreased network-related ticket volumes by 25%, shortened the time to resolve an incident, and reduced the number of FTEs involved in the remediation process from 30 down to 10.
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Avoided effort to mitigate and combat bots and credential stuffing. In addition to managing traffic from normal business operations, interviewees recounted how their organizations’ networking professionals were increasingly left to defend their organizations against bots. With growing frequency and severity, these bot attacks delivered recurring waves of malicious traffic, overwhelmed interviewees’ organizations’ capacity to deal with threats, and gained access to the organizations’ apps through credential stuffing and other means. Interviewees highlighted how Distributed Cloud Services effectively sequestered bot traffic from viable customer transactions, production pipelines, and other critical apps.
- The network operations manager in the financial services industry described how Distributed Cloud Services effectively neutralized threats and reduced the labor required to manage bots. Prior to F5, resources were dedicated to rerouting bot traffic spurts from threat actors on a quarterly basis. The interviewee reported how their team members were pulled away from daily responsibilities: “Towards the end, it was getting worse than before, as it was getting more frequent. Maybe four times a year, each of them were dropping everything else and spending 4 hours on that because, obviously, if something like that starts, you have to drop what you’re working on because that takes precedence over everything else. By implementing F5, it was a huge lift off of us not having to constantly try to mitigate these credential-stuffing [incidents], overwhelming our web servers where we had to keep moving traffic. So it was a huge relief that putting this in place stopped all of that.”
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Simplified and centralized security parameter management. Interviewees mentioned that, while F5 provides a more secure environment in general, it also served to unify multicloud security parameters in one place. This further secured the environment while also adding to the SecOps efficiencies detailed in Benefit C.
- The IT infrastructure manager in the retail industry shared how F5 contributed to reducing incidents by decreasing security policy inconsistencies by 30% compared with their organization’s prior environment.
- The head of infrastructure in education discussed how they no longer needed multiple people to deploy consistent security in multiple environments. Policies could be centrally managed and deployed by a single person in a single tool, with potential impacts amplified due to the anticipated significant growth of applications and API endpoints.
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Avoided security patching. Security patching posed a challenge of competing priorities for the organization. While the value of maintaining a secure environment was well understood, the complex, multicloud environment led to significant processes characterized by lengthy testing phases and severe impacts on system availability if conducted improperly.
- The network operations manager in the financial services company described how automation through Distributed Cloud Services helped eliminate the need to manually patch their systems multiple times a month to maintain security, freeing multiple FTEs as well as the associated time.
- The head of infrastructure at the government organization shared how F5 helped their organization to avoid the significant testing and deployment effort for semi-annual and quarterly patching to ensure a secure environment.
Modeling and assumptions. Based on the interviews, Forrester assumes:
- In the prior environment, the composite organization dedicated 12 FTEs to security operations.
- In Year 1, the composite delivers 25% of its environment by F5 Distributed Cloud Services, increasing to 45% in Year 2, and 95% in Year 3.
- The composite organization’s security operations FTEs experience productivity improvements of 10%, 18%, and 20% in the three years under analysis, respectively.
- The average fully burdened annual salary for a security operations resource is $180,500.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this benefit:
- The number of apps and nature of the workloads migrated to Distributed Cloud Services.
- The security operations requirements and skill sets available on the security operations team.
- The level to which an organization relied on manual processes prior to F5, the resulting amount of labor required, and the extent to which it automates security operations activities in Distributed Cloud Services.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $453,000.
Security Operations Productivity Improvement
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| C1 | Total security operations FTEs in the prior environment | Composite | 12 | 12 | 12 |
| C2 | Percentage of environment delivered by F5 Distributed Cloud Services | A2 | 25% | 45% | 95% |
| C3 | Security operations productivity improvement with F5 | Interviews | 10% | 18% | 20% |
| C4 | Average fully burdened annual salary for a security operations professional | Composite | $180,500 | $180,500 | $180,500 |
| Ct | Security operations productivity improvement | $54,150 | $175,446 | $411,540 | |
| Risk adjustment | ↓10% | ||||
| Ctr | Security operations productivity improvement (risk-adjusted) | $48,735 | $157,901 | $370,386 | |
| Three-year total: $577,022 | Three-year present value: $453,078 | ||||
Networking Operations Productivity Improvement
Evidence and data. Interviewees discussed how Distributed Cloud Services helped their organizations streamline deployment with added flexibility, including reducing the time to connect applications and APIs between clouds and infrastructure providers.
Interviewees described how automation introduced task-based efficiencies and vastly reduced manual processes. They offered further insights into how the accumulation of these efficiencies led to broad-based improvements in productivity, upskilling, and even the maturity of their security approaches and ability to scale. The following drivers resulted in significant productivity improvements for the interviewees’ organizations:
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Broad-based labor efficiencies from centralized multicloud management. Interviewees indicated that the optimization efforts described in Benefit A simplified their organizations’ people, process, and technology management requirements. This is above and beyond any avoided labor related to basic maintenance of physical infrastructure decommissioned with F5.
- The IT infrastructure manager in the retail industry noted that Distributed Cloud Services aided deployment flexibility, eliminating manual processes and reducing the time to connect applications and APIs for patching among clouds, providers, and security domains by 25%. They also pointed out how the shortened time and reduced number of resources to resolve a network incident allowed FTEs to focus on more productive efforts.
- The head of infrastructure at the government organization described how the F5 Distributed Cloud environment simplified their organization’s complexity via management through a single platform.
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Shortened SLAs and increased scalability. Interviewees discussed how their organizations vastly improved their ability to serve their customer base.
- In addition to reducing SLAs, the IT infrastructure manager in the retail industry shared how their networking operations teams were able to do more with the same resources as in the prior environment. They reported, “What has [further] changed is our service base, whereas today, with that same number of people [on the team], we are serving 25% more [customers].”
- The IT infrastructure manager in the retail industry shared how F5 impacted their 10-person team: “Our SLA went from 24 hours down to 6, and that is key with [respect to] time to market. [Compared with] the manual work that was done previously, today we can do it through this solution.”
Modeling and assumptions. Based on the interviews, Forrester assumes:
- In the prior environment, the composite organization dedicated 8 FTEs to networking operations.
- In Year 1, the composite delivers 25% of its environment by F5 Distributed Cloud Services, increasing to 45% in Year 2 and 95% in Year 3.
- The composite organizations’ networking operations FTEs experience productivity improvements of 10%, 18% and 20% in the three years under analysis, respectively.
- The average fully burdened annual salary for a networking operations resource is $180,500.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this benefit:
- The number of apps and nature of the workloads migrated to Distributed Cloud Services.
- The networking operations requirements and skill sets available on the networking operations team.
- The level to which an organization relied on manual processes prior to F5, the resulting amount of labor required, and the extent to which it is able to automate its networking operations activities.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $302,000.
Networking Operations Productivity Improvement
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| D1 | Total network operations FTEs in the prior environment | Composite | 8 | 8 | 8 |
| D2 | Percentage of environment delivered by F5 Distributed Cloud Services | A2 | 25% | 45% | 95% |
| D3 | Productivity improvement with F5 | Interviews | 10% | 18% | 20% |
| D4 | Average fully burdened annual salary for a network operations professional | Composite | $180,500 | $180,500 | $180,500 |
| Dt | Networking operations productivity improvement | $36,100 | $116,964 | $274,360 | |
| Risk adjustment | ↓10% | ||||
| Dtr | Networking operations productivity improvement (risk-adjusted) | $32,490 | $105,268 | $246,924 | |
| Three-year total: $384,682 | Three-year present value: $302,052 | ||||
SDLC Security Optimization
Evidence and data. Interviewees discussed ways in which their organizations transformed how their developers securely interacted with complex tooling and workloads. In the prior environment, their developers suffered from a high level of rework due to malware infections in the production environment, as well as high latency levels and limited availability. This slowed down — or even prevented — the release of customer-facing software and services.
With Distributed Cloud Services, developers were able to access complex tooling and advanced workloads more securely and with less latency. In most cases, this led to a more secure production environment with less rework. For some organizations, that improvement permitted their developers to accelerate release schedules and improve time to market for customer-facing services. Other organizations maintained their SDLC schedules while scaling the amount of software developed with the same number of resources as in the prior environment. These security improvements to the SDLC environment resulted in valuable optimizations.
- The head of infrastructure in education shared how Distributed Cloud Services eliminated development inefficiencies, prevented production website malware attacks, and ensured that any application was safeguarded from bots. With security policies managed centrally, delivery times improved and the number of potential points of failure decreased.
- The IT infrastructure manager in the retail industry indicated that their developer teams were able to optimize their staffing by 30% for the last three years, thus allowing for more productivity within the SDLC and improving time to market. Their developers were able to focus on supporting more initiatives and getting new solutions into the market months earlier than they could have before adopting Distributed Cloud Services.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization dedicates 50 of its 500 developers to highly sophisticated projects using advanced developer tools.
- In the prior environment, these developers operated on a biannual SDLC, with two 50-week cycles, for a total of 100,000 developer hours per cycle.
- In Year 3, the composite organization migrates its advanced developer tooling and workloads to Distributed Cloud Services, reducing latency in addition to the improved availability noted in Benefit B.
- Furthermore, with a more secure development environment, the composite organization experiences fewer malware infections and bot attacks during the production process, resulting in far less rework for developers. This optimizes SDLC security workflows with F5 by 5% in Year 3, resulting in 5,000 total developer hours reattributed to the SDLC to deliver more software to customers. This represents an avoided labor cost of $435,000.
- The average fully burdened hourly rate for a developer is $87.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this benefit:
- The number of apps and the nature of the workloads migrated to Distributed Cloud Services.
- The nature of software being developed, and skill sets available on the team.
- The latency, availability, and sophistication of developer tools and processes in Distributed Cloud Services.
- The fully burdened rate of developer resources.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $261,000.
SDLC Security Optimization
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| E1 | Total developers | Composite | 50 | 50 | 50 |
| E2 | Annual SDLC weeks in the prior environment (two 25-week cycles) | Composite | 50 | 50 | 50 |
| E3 | Total SDLC hours annually | E1*E2*40 | 100,000 | 100,000 | 100,000 |
| E4 | Security optimization of SDLC workflows with F5 | Interviews | 0.0% | 0.0% | 5.0% |
| E5 | Total developer hours reattributed to the SDLC | E3*E4 | 0 | 0 | 5,000 |
| E6 | Average fully burdened developer hourly rate | Composite | $87 | $87 | $87 |
| Et | SDLC security optimization | E5*E6 | $0 | $0 | $435,000 |
| Risk adjustment | ↓20% | ||||
| Etr | SDLC security optimization (risk-adjusted) | $0 | $0 | $348,000 | |
| Three-year total: $348,000 | Three-year present value: $261,458 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but that were not quantified for the study:
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Lower infrastructure support costs. Interviewees described how F5’s simplified environment reduced pressure on internal infrastructure support teams.
- The head of infrastructure in education noted that their organization’s IT support requirements were mitigated, resulting in a 50% reduction in infrastructure-related support ticket.
- The head of infrastructure in education reported that their organization reduced the potential number of failure points throughout their organization by over 80%, from 12 to two.
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Better monitoring and reporting. Interviewees credited the newfound abilities to better monitor their traffic and report vital metrics to key audiences in a timely manner to the visibility conferred by the F5 distributed cloud.
- The network operations manager in the financial services company noted that F5 also helped their organization improve its traffic monitoring, troubleshooting, and reporting ability, in addition to security.
- The head of infrastructure in education noted that the increased visibility and simplicity of Distributed Cloud Services improved their organization’s processes for monitoring the networking environment. Prior to F5, they indicated that maintaining traffic without observability had both operational costs and large potential risks.
- Improved employee experience for networking and security operations teams. In addition to the efficiencies described in Benefit C and Benefit D, interviewees discussed how their teams were able to improve their daily experience. Distributed Cloud Services allowed organizations to right-skill their employees. For higher-skilled FTEs, eliminating manual processes meant that these valuable resources were able to dedicate their talents to furthering business goals rather than maintaining rote processes.
Quantified cost data as applied to the composite
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Gtr | F5 Distributed Cloud Services | $0 | $226,010 | $303,851 | $377,256 | $907,117 | $740,018 |
| Htr | Implementation | $128,216 | $61,811 | $33,681 | $15,740 | $239,448 | $224,069 |
| Itr | Administration | $0 | $19,906 | $29,858 | $44,788 | $94,552 | $76,422 |
| Total costs (risk-adjusted) | $128,216 | $307,727 | $367,390 | $437,784 | $1,241,117 | $1,040,509 | |
F5 Distributed Cloud Services
Evidence and data. Interviewees offered insight into how their organizations configured their F5 Distributed Cloud Services to meet various business objectives with combinations of the following products:
- F5 Distributed Cloud Services base subscription that includes one public load balancer and unlimited internal load balancers.
- Deployable multicloud customer edge software nodes.
- Additional application security subscriptions to include bot mitigation and API security.
Vectors that ramped costs for interviewees’ organizations included consumption- and application-based models:
- Consumption-based, or the number of transactions and bandwidth consumed for bot mitigation.
- The number of load balancers (per app) deployed to account for new applications and the number of supported sites that grow over time to support new applications in private cloud and edge sites.
- The number of customer edge software nodes to support additional clouds and edge sites.
Modeling and assumptions. The composite experiences the following F5 costs:
- The F5 Distributed Cloud Services base subscription costs the composite organization $24,720 a year.
- Clustered multicloud edge node costs start at under $49,000 in Years 1 and 2, increasing to just over $71,000 in Year 3 as a second cloud environment is added.
- Bot mitigation costs total $37,000 in Year 1 and $68,000 in Years 2 and 3 due to increases in transactional volume and bandwidth.
- Additional application security costs that include API Security total $97,000 in Year 1, increasing to approximately $180,000 by Year 3 for the composite.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this cost:
- The number of public and private apps, the number of cloud and on-premises instances integrated into Distributed Cloud Services, and the nature of the workloads migrated to Distributed Cloud Services.
- The level to which an organization needs application security and bot defense.
- An organization’s availability requirements for core network services.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $740,000.
F5 Distributed Cloud Services
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| G1 | F5 Distributed Cloud Services base package subscription | Composite | $0 | $24,720 | $24,720 | $24,720 | |
| G2 | Multicloud Networking | Composite | $0 | $46,704 | $48,552 | $71,904 | |
| G3 | Bot Defense | Composite | $0 | $37,080 | $67,980 | $67,980 | |
| G4 | Application Security | Composite | $0 | $96,960 | $134,976 | $178,356 | |
| Gt | F5 Distributed Cloud Services | G1*G2*G3+G4 | $0 | $205,464 | $276,228 | $342,960 | |
| Risk adjustment | ↑10% | ||||||
| Gtr | F5 Distributed Cloud Services (risk-adjusted) | $0 | $226,010 | $303,851 | $377,256 | ||
| Three-year total: $907,117 | Three-year present value: $740,018 | ||||||
Implementation
Evidence and data. Interviewees charted the deployment arc for Forrester, describing multiyear approaches that closely aligned with their respective organizations’ business objectives. These phases typically included an initial, pre-procurement proof-of-value phase in which a segment of the deployment process is completed. From there, several successive testing and technical implementation phases of various apps involved progressively fewer resources thanks to efficiencies enabled through both the streamlined infrastructure itself and iterative labor processes.
POC/testing:
- The IT infrastructure manager in the retail industry discussed setting up a simulated ecosystem to test Distributed Cloud Services and ensure it would be successful.
Phased technical implementations:
- The network operations manager in the financial services industry discussed their organization’s swift initial implementation with Forrester. Their organization deployed base web application firewall (WAF) capabilities first, then implemented credential-stuffing and bot detection functions. This was a two-month process in which a network administrator was assigned to get it configured. That person dedicated 50% of their time to this work for 30 days. The interviewee noted that Distributed Cloud Services stood up quickly, with most of the six-month initial implementation period spent on configuration and testing.
- The IT infrastructure manager in the retail industry detailed how their organization’s initial implementation lasted six months. During that time, they dedicated four resources from security, network, financial services, and central computing. In the years following the initial implementation, the interviewee noted that their organization continually launched new integrations.
Ongoing implementations and adoption:
- The head of infrastructure in education shared that the implementation involved three internal infrastructure staff members as well as representatives from F5 and from a third-party systems integrator. The effort spanned approximately three months, and they noted how smooth it was, with F5 easily integrating routing parameters used in the prior environment.
Modeling and assumptions. The composite organization experiences implementation and maintenance costs as follows:
Internal implementation costs:
- The composite organization dedicates three FTEs to implementation in the initial period lasting three months. During this time, the implementation resources are each fully dedicated to F5 implementation, amounting to 260 hours each.
- As the composite organization expands its usage, the average number of hours dedicated to implementation per FTE decreases by half to 130 hours in Year 1, 65 hours in Year 2, and 33 hours in Year 3.
- The average fully burdened hourly rate for an implementation resource is $87.
External implementation costs:
- The composite organization engages a third-party implementation partner throughout the phased, multiyear deployments. Costs decrease by 50% each year, totaling $40,000 in the initial periods, $20,000 in Year 1, $10,000 in Year 2, and $5,000 in Year 3.
Testing costs:
- The composite organization dedicates 25 FTEs to testing the various apps as they are onboarded to the F5 environment. It dedicates 25 FTEs to testing in the initial period, 13 FTEs in Year 1, 7 FTEs in Year 2, and 4 FTEs in Year 3.
- The number of hours of testing varies according to the app being tested, ranging from 2 to 6 hours per FTE per phase.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this cost:
- The number of apps and the nature of the workloads migrated to Distributed Cloud Services.
- The degree to which an organization would need third-party implementation support, if at all.
- The total internal FTE effort required for implementation.
- The implementation and testing requirements and skill sets available.
- The fully burdened rate of implementation resources.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $224,000.
Implementation
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| H1 | Total FTEs dedicated to implementation | Composite | 3 | 3 | 3 | 3 | |
| H2 | Average number of hours dedicated to implementation per FTE | Composite | 260 | 130 | 65 | 33 | |
| H3 | Average fully burdened hourly rate for an implementation resource | Composite | $87 | $87 | $87 | $87 | |
| H4 | Subtotal: Internal implementation labor costs | H1*H2*H3 | $67,860 | $33,930 | $16,965 | $8,613 | |
| H5 | Subtotal: Third-party implementation costs | Interviews | $40,000 | $20,000 | $10,000 | $5,000 | |
| H6 | Total FTEs dedicated to testing | Composite | 25 | 13 | 7 | 4 | |
| H7 | Average hours of testing per FTE | Composite | 4 | 2 | 6 | 2 | |
| H8 | Average fully burdened hourly rate for an implementation resource | H3 | $87 | $87 | $87 | $87 | |
| H9 | Subtotal: Testing costs | H6*H7*H8 | $8,700 | $2,262 | $3,654 | $696 | |
| Ht | Implementation | H4+H5+H9 | $116,560 | $56,192 | $30,619 | $14,309 | |
| Risk adjustment | ↑10% | ||||||
| Htr | Implementation (risk-adjusted) | $128,216 | $61,811 | $33,681 | $15,740 | ||
| Three-year total: $239,448 | Three-year present value: $224,069 | ||||||
Administration
Evidence and data. Interviewees shared how their organizations experienced minimal ongoing labor effort once Distributed Cloud Services was established.
- The network operations manager in the financial services company indicated that the ongoing administration for their organization’s configuration of distributed cloud WAF with bot protection as effectively zero.
Modeling and assumptions. The composite organization experiences administration costs as follows:
- Total annual hours of product administration scale lightly year over year as more workloads are migrated to the F5 environment. In Year 1, the composite organization dedicates 208 hours to administering the F5 environment, increasing 50% each subsequent year in the investment period.
- The average fully burdened hourly rate for an administrator is $87.
Risks. Forrester recognizes that these results may not be representative of all experiences. The following factors may impact this cost:
- The number and nature of the workloads migrated to the F5 environment.
- The implementation requirements and skill sets available.
- The total internal FTE effort required for ongoing administration.
- The fully burdened rate of implementation administration resources.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $76,000.
Administration
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| H1 | Total annual hours of product administration | Interviews | 0 | 208 | 312 | 468 | |
| H2 | Average fully burdened hourly rate for an administrator | Composite | $87 | $87 | $87 | $87 | |
| Ht | Administration | H1*H2 | $0 | $18,096 | $27,144 | $40,716 | |
| Risk adjustment | ↑10% | ||||||
| Htr | Administration (risk-adjusted) | $0 | $19,906 | $29,858 | $44,788 | ||
| Three-year total: $94,552 | Three-year present value: $76,422 | ||||||
Consolidated Three-Year Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits-
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($128,216) | ($307,727) | ($367,390) | ($437,784) | ($1,241,117) | ($1,040,509) |
| Total benefits | $0 | $175,075 | $730,119 | $2,043,870 | $2,949,064 | $2,298,154 |
| Net benefits | ($128,216) | ($132,652) | $362,729 | $1,606,087 | $1,707,947 | $1,257,645 |
| ROI | 121% | |||||
| Payback | 21 months | |||||
Appendix A: Total Economic Impact
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 their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Total Economic Impact Approach
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Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.
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Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
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Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.
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Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end 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 the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
APPEnDIX B: Endnotes
1 Source: The Top 10 Trends In IT Networking, 2023, Forrester Research, Inc., August 23, 2023.
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 their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
3 The F5 Distributed Cloud Services Base Package includes one public load balancer and unlimited internal load balancers.
4The F5 Distributed Cloud Services Base Package includes one public load balancer and unlimited internal load balancers.
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