The Total Economic Impact™ Of Google Cloud Spanner
Cost Savings And Business Benefits Enabled By Google Cloud Spanner
A Forrester Total Economic Impact ™ Study Commissioned By Google, December 2024
Operational databases are the foundation of intelligent enterprise applications that deliver accurate, relevant, and contextual customer experiences. They are critical for today’s dynamic and ever-evolving digital world, providing centralized storage and management of enterprise data that powers modern applications. Google Cloud Spanner enables organizations to achieve significant cost savings and profit retention, while also increasing reliability and operational efficiencies. It provides greater budget predictability, advanced business features, and system visibility, and also accelerates testing and deployment.
Google Cloud Spanner is an always-on database that provides global consistency and scalability. Spanner powers a variety of modern applications across numerous industries and Google’s billion user products such as, such as Google Search, Gmail, YouTube and Photos. By unifying relational, key-value, graph, and vector search workloads into a single database, Spanner simplifies data architecture and allows development teams to build their applications faster. Moreover, with no maintenance windows or downtime for failover or scaling, Spanner offers seamless operation for mission-critical applications even as requirements change.
Google commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study to examine the potential return on investment (ROI) enterprises may realize by deploying Spanner.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Spanner on their organizations.
Return on investment (ROI)
132%
Net present value (NPV)
$4.40M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed seven representatives from organizations with experience in using Spanner. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a business-to-consumer (B2C) organization with revenue of $1 billion per year.
Interviewees reported that before adopting Spanner, their organizations relied on databases that they managed themselves on their own infrastructure. The cost of maintaining this infrastructure was high in terms of capital expenditure (capex) and labor. Additionally, there were frequent disruptions that compromised business continuity, and the limited scalability of the legacy environment hampered business growth.
After investing in Spanner, the interviewees experienced the benefits of a fully managed database service. Spanner provided the reliability needed to reduce both planned and unplanned downtime. Key results from this investment included higher profit retention, decreased capex and labor costs, along with improved agility to develop new applications.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Decreased legacy database costs. Transitioning to Spanner allows the composite organization to retire legacy on-premises databases, resulting in significant savings. These savings include reduced infrastructure capex, maintenance costs, and system licensing expenses. Additionally, because Spanner is a fully managed service, the composite organization can reallocate its database administrators to higher-value tasks. Over a three-year period, the composite organization saves $3.8 million by retiring the legacy environment.
- Reduced unplanned downtime and increased profit retention and cost savings. Spanner helps eliminate unplanned downtime for the composite organization. The composite now experiences only one incident per quarter during nonpeak usage times and just one incident per year during peak usage times. This allows software development engineers (SDEs) to resolve issues promptly, saving valuable time. Over a three-year period, the composite organization retains $1.2 million in profit and labor cost savings.
- Increased profit and cost savings due to zero-downtime upgrades. With the transition to Spanner, the composite organization no longer worries about database version upgrades or security patches because Google Cloud fully manages these aspects. The absence of planned downtime ensures uninterrupted business operations, preserving profits and reducing labor costs associated with upgrades. Over three years, the composite organization benefits by $692,000.
- Gained efficiencies when onboarding new applications. Spanner accelerates development of new applications by eliminating the need for preplanning resources. Compared to the previous on-premises environment, SDEs can more easily and quickly set up and tear down databases for test and development. This results in a time savings of 80% and cost savings of $981,000 over three years for the composite organization.
- Reduced overprovisioning for peak usage, resulting in cost savings. Previously, the composite organization had to strategize resource allocation and overinvest in hardware to handle peak volumes with on-premises infrastructure. Spanner’s elastic scalability allows systems to grow and shrink on-demand to accommodate peak volumes, significantly reducing planning time and resulting in cost savings of $1.0 million over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Improved budget predictability. Transitioning from on-premises infrastructure to Spanner shifts expenditure from capex to operational expenditure (opex). This change, along with enhanced forecasting of database usage, improves the composite organization’s ability to manage budgetary requirements.
- Facilitated advanced business capabilities and expansion. Spanner’s architecture allows the composite to design and implement advanced business capabilities, such as multiregional configuration, automatic sharding with no downtime, and automated maintenance. Additionally, its scalability ensures there are no constraints on the composite organization’s growth.
- Improved flexibility in testing and deployment. The composite organization appreciates adaptability in testing and deployment processes, reducing development costs and aligning with its existing software development lifecycle. Compared to the previous legacy solution, Spanner offers a higher degree of flexibility.
- Added value due to Google Cloud customer service. The composite works directly with the Google Cloud customer service team, since Spanner is a fully managed service. Their dialogue extends beyond just the product or its current status. The composite can share its vision for Spanner with the Google team, who address any product-related concerns.
- Improved system monitoring visibility. Spanner offers a variety of functions that enhance the composite organization’s visibility. This includes real-time metrics to identify and tune performance and resource usage and integrates into the Google Cloud monitoring stack and third-party tools. This deeper insight provides bolsters decision-making processes.
Costs. Three-year, risk-adjusted present value (PV) costs for the composite organization include:
- Spanner usage cost. The cost of Spanner is based on usage. For the composite organization, this amounts to $2.0 million.
- Planning, migration, and implementation costs. The composite organization requires an internal team to plan, migrate, implement, and modernize workloads to take advantage of Spanner. This process takes eight months and costs $1.1 million.
- Ongoing maintenance costs. Maintaining Spanner requires minimal internal effort. Two database administrators (DBAs) oversee Spanner, dedicating 30% of their time. Over three years, this costs the composite organization $228,000.
The representative interviews and financial analysis found that a composite organization experiences benefits of $7.74 million over three years versus costs of $3.33 million, adding up to a net present value (NPV) of $4.40 million and an ROI of 132%.
Key Statistics
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Return on investment (ROI)
132%
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Benefits PV
$7.74M
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Net present value (NPV)
$4.40M
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Payback
9 months
Benefits (Three-Year)
Costs savings from retiring on-prem legacy database Profit retention and cost savings from reduced unplanned downtime Profit retention and cost savings from zero-downtime upgrades Efficiencies gained in onboarding new applications Costs savings from reduction in overprovisioning for peak usageTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Spanner.
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 Spanner can have on an organization.
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Due Diligence
Interviewed Google stakeholders and Forrester analysts to gather data relative to Spanner.
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Interviews
Interviewed seven representatives at organizations using Spanner 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 Google 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 Spanner.
Google 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.
Google provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Rachna Agarwalla
Chengcheng Dong
Rachel Ballard
Drivers leading to the Spanner investment
Interviews
| Role | Industry | Region | Revenue Range | Number Of Employees |
|---|---|---|---|---|
| Senior director of engineering | Transportation | HQ in the US, global operations | $30B to $40B | 30,000 |
| Head of SRE, DevOps, and infrastructure | Financial services | Brazil and US | $25M to $35M | 250 |
| IT director | Online fashion retail | HQ in the UK, global operations | $300M to $400M | 700 |
| Senior principal architect | Software and technology | HQ in the US, global operations | $2B to $4B | 7,500 |
| Tech lead | Gaming | HQ in Japan, global operations | $1B to $3B | 710 |
|
Tech senior manager
Principal engineer |
Retail | US | $20B to $30B | 95,000 |
| Head of engineering | Financial services | Australia and New Zealand | $20B to $30B | 40,000 |
Key Challenges
Databases are a crucial part of any organization’s IT infrastructure, acting as the backbone that supports business functions and ensures smooth operations. Various types of databases can be deployed based on specific business needs. Before Spanner, the interviewees’ organizations initially used self-managed, on-premises databases. However, as their businesses grew, the interviewees noted how their organizations struggled with common challenges, including:
- High capex and operational overhead. According to the interviewees, on-premises databases required significant upfront investment in hardware, including storage and servers, which typically lasted four to five years. This resulted in substantial capex every few years. Additionally, the interviewees’ organizations’ self-managed databases demanded considerable human resources for administrative tasks. A senior principal architect from a software and technology organization noted: “The mainframe was extremely expensive. We strategically decided to stop using it and are currently in the process of transitioning.” A senior director of engineering from a transportation organization added: “We had a core unit leveraged across all teams. Any standard engineering team is eight to 12 people with at least five involved in keeping our on-prem database up and running.”
- Disruptions due to planned and unplanned downtime. Interviewees noted their organizations frequently experienced incidents causing unplanned downtime, leading to business disruptions. A senior director of engineering from a transportation organization shared that their organization experienced roughly one incident a quarter. These incidents could sometimes last for up to 1 hour, resulting in business degradation. Managing the database internally required taking servers down for upgrades or maintenance, resulting in planned downtime and potential business loss. A tech lead from a gaming organization explained: “The number of users increased rapidly so we needed to raise the server specs. If you try to do something like that, you’ll have to cut off users’ ability to continue playing the game and perform maintenance.”
- Scalability constraints. The interviewees reported that the scalability constraints of on-premises databases hindered their organizations’ business expansion. Scaling required additional planning and significant investment in hardware, consuming time and resources. A principal engineer at a retail company illustrated this challenge: “To scale up with a mainframe, we needed new hardware, DB2 licenses, and a standby server configured identically to the primary server. With our infrastructure size, it could cost several million dollars, especially during holidays when we aimed for peak performance.”
- Performance constraints. For the interviewees’ organizations, maintaining the availability of on-premises databases was challenging. The head of SRE, DevOps, and infrastructure from a financial services organization noted their organization’s database availability did not meet regulatory requirements. They revealed: “Our main limitation with the legacy database was not achieving the performance and availability level required by the central bank. We faced issues during transaction peak times.”
Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Reduce capex and rely less on highly skilled labor.
- Increase reliability and eliminate downtime, ensure business continuity.
- Provide scalability and advanced capabilities to support business growth without extensive replatforming.
After a request for proposal (RFP) and business case process evaluating multiple vendors, the interviewees’ organizations chose Spanner and began deployment. Most of the interviewees’ organizations chose to take a phased approach to deployment. Business-critical workloads were migrated to Spanner first, and new business applications would be developed leveraging Spanner.
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 seven 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. Operating on a global scale, this B2C company excels in high-volume sales, customer support, and services for its consumer products. With a robust brand, worldwide operations, a substantial customer base, and a significant online presence, the composite organization is a market leader. It boasts an annual revenue of $1 billion, which grows by 4% per year, and sees its data growing at 10% per annum. On average, hourly revenue is $110,000, which escalates to $1.2 million during peak usage times.
Deployment characteristics. Prior to implementing Spanner, the composite organization relied on an on-premises, self-managed database. It began deploying Spanner in Year 1 following an eight-month implementation period. The initial launch targeted business-critical applications. Moving forward, Spanner will be used for developing all future applications.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Costs savings from retiring on-prem legacy database | $845,500 | $2,794,330 | $946,865 | $4,586,695 | $3,789,394 |
| Btr | Profit retention and cost savings from reduced unplanned downtime | $478,440 | $495,158 | $512,387 | $1,485,986 | $1,229,131 |
| Ctr | Profit retention and cost savings from zero-downtime upgrades | $268,200 | $278,755 | $289,764 | $836,719 | $691,898 |
| Dtr | Efficiencies gained in onboarding new applications | $349,920 | $396,554 | $445,565 | $1,192,039 | $980,599 |
| Etr | Costs savings from reduction in overprovisioning for peak usage | $373,825 | $422,623 | $474,905 | $1,271,353 | $1,045,919 |
| Total benefits (risk-adjusted) | $2,315,885 | $4,387,421 | $2,669,486 | $9,372,792 | $7,736,941 | |
Costs Savings From Retiring On-Prem Legacy Database
Evidence and data. Previously, most of the interviewees’ organizations relied on on-premises, self-managed databases, which required routine maintenance, significant initial capex and a dedicated IT team. However, as their businesses expanded and new technologies emerged, these organizations considered moving to a different database. Spanner became their preferred choice for this transition.
- Interviewees noted that on-premises databases required a significant upfront investment in servers, storage units, and other infrastructure, resulting in substantial capex for most of their organizations. The senior principal architect of a software and technology organization shared their experience regarding the cost of the previous solution: “The system before migration was more expensive. It was the cost of the entire system including the application, database, monitoring, and everything. We paid within the $5 million to $10 million range for a mainframe, and I expect that the cost of it would almost double within the next few years. Currently, we pay 90% less for Spanner.”
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Labor costs were a significant burden for the interviewees’ organizations. They had to maintain an in-house IT team specifically for managing the on-premises database. Typically, DBAs dedicated their time to upgrades, patching, incident handling, and performance management. The interviewees reported that their organizations had to constantly ensure they had a competent team in place for the database to function effectively and support the business. However, by transitioning to Spanner, their organizations experienced labor cost savings, as Spanner is a fully managed service. Some of the interviewees’ experiences included the following:
- The senior director of engineering at a transportation organization shared: “I would say that any company switching from on-prem to Spanner should anticipate redeploying six to eight people. Of course, we’ll still have a few people working on database operations but a lot less than before.”
- The head of engineering at a financial service organization said: “We wanted a database where engineers could pick it up, learn it, use it effectively, and it will scale without any extra overhead or thought. Spanner is the closest we have ever seen to that. We have zero DBAs. Can you imagine that we have zero DBAs on our team?”
- The head of SRE, DevOps, and infrastructure at a financial service organization said: “Since Spanner is more managed than our previous solution, we don’t need to have specialized DBAs on the team. As a result, Spanner saved us two or three positions.”
- The tech senior manager at a retail organization said: “Since we transitioned to Spanner, our database administration work has come down by at least 40%. We didn’t need to eliminate the positions but transferred the resources to our SRE DevOps team as well as some other areas.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization transitions part of its on-premises database to Spanner. It typically renews its on-premises infrastructure equipment every four years and the transition plan is synchronized with this renewal cycle. By Year 2, the composite organization avoids an additional $2 million in equipment renewal costs.
- The composite organization allocates $150,000 annually for managing and maintaining its on-premises infrastructure. This maintenance and support cost increases by 10% each year.
- The composite organization incurs an annual licensing fee of $200,000 for its on-premises database management systems, which grows by 10% each year. By moving to Spanner, it can eliminate these costs.
- Due to the database size, four DBAs can be reassigned to other roles after moving to Spanner. The fully burdened annual salary for a DBA is $135,000 in Year 1, increasing 3% annually.
Risks. Risks that could impact the realization of this benefit include:
- The size of the on-premises infrastructure and the implementation schedule.
- The legacy infrastructure and management structure in place.
- The skill level of DBAs and their compensation.
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 $3.8 million.
Costs Savings From Retiring On-Prem Legacy Database
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | On-premises infrastructure servers and storage units costs | Composite | $0 | $2,000,000 | $0 |
| A2 | On-premises infrastructure equipment maintenance and support costs | Composite | $150,000 | $165,000 | $181,500 |
| A3 | Previous database management systems licensing fee | Composite | $200,000 | $220,000 | $242,000 |
| A4 | Number of in-house DBAs saved | Composite | 4 | 4 | 4 |
| A5 | Fully burdened annual salary for a DBA | TEI standard | $135,000 | $139,100 | $143,300 |
| A6 | DBA savings | A4*A5 | $540,000 | $556,400 | $573,200 |
| At | Costs savings from retiring on-prem legacy database | A1+A2+A3+A6 | $890,000 | $2,941,400 | $996,700 |
| Risk adjustment | ↓5% | ||||
| Atr | Costs savings from retiring on-prem legacy database (risk-adjusted) | $845,500 | $2,794,330 | $946,865 | |
| Three-year total: $4,586,695 | Three-year present value: $3,789,394 | ||||
Profit Retention And Cost Savings From Reduced Unplanned Downtime
Evidence and data. Interviewees noted that technical malfunctions, human errors, data integration issues, or natural disasters often triggered their organizations’ unplanned database downtime. The interviewees’ organizations were actively working to prevent these incidents to minimize business disruption.
- The interviewees’ organizations experienced a significant reduction in the number of unplanned downtime incidents due to Spanner. The senior director of engineering at a transportation organization shared their experience: “We had incidents roughly around once a quarter. These incidents would last anywhere between 10 minutes to an hour, where we would see significant degradation to the business. Post-Spanner, we haven’t seen any major incidents in the past six to nine months.” The senior principal architect at a software and technology firm also shared, “We have been using Spanner on production for probably a year and a half and we haven’t had any outages or downtime during this time.” The tech lead at a gaming organization said: “In the last seven years since we migrated to Spanner, the total number of failures caused by Spanner is zero. Prior to Spanner, some sort of problem would occur about once a month including a major problem once a year.”
- The incidents at the interviewees’ organizations caused downtime, which led to loss of business. The senior director of engineering at a transportation organization shared: “I think in our last quarter, we had $32 billion in gross bookings. If you amortize it by the minute, it’s a lot of revenue. During downtime, some people were still able to place orders but not everyone, resulting in a 30% to 40% decrease in orders which would last for 30 minutes to an hour.” The tech lead from a gaming organization also shared that the loss of downtime not only led to a decline in revenue but also increased costs due to the labor needed to resolve the downtime.
- Interviewees noted that addressing incidents required the IT and development teams to invest significant time and effort. However, by transitioning to Spanner, the reduction in incidents allowed these teams to concentrate on strategic tasks instead. The head of SRE, DevOps, and infrastructure at a financial service organization shared, “The amount of time engineers would put in trying to figure out what should be done to resolve an incident has been eliminated completely with Spanner.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization experiences four incidents per year during nonpeak usage times, each resulting in 1 hour of downtime. Additionally, there is one incident during peak usage times causing 1 hour of downtime annually.
- The average hourly revenue is $110,000 during nonpeak usage times and $1.2 million during peak usage times. Given that the downtime is unplanned, 70% of the revenue is irretrievably lost.
- To rectify the downtime caused by on-prem databases, SDEs collectively invest a total of 2,400 working hours.
Risks. Risks that could impact the realization of this benefit include:
- The reliability of the former database.
- Tactics employed to recover lost revenue.
- The level of competence and expertise of IT and developer teams.
- The organization’s profit margin.
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 $1.2 million.
Profit Retention And Cost Savings From Reduced Unplanned Downtime
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| B1 | Number of incidents cause unplanned downtime prior to Spanner in nonpeak usage each year | Interviews | 4 | 4 | 4 |
| B2 | Average unplanned downtime of each nonpeak usage incident (hours) | Interviews | 1 | 1 | 1 |
| B3 | Average hourly revenue in nonpeak usage | Composite | $110,000 | $114,400 | $119,000 |
| B4 | Number of incidents cause unplanned downtime prior to Spanner in peak usage each year | Interviews | 1 | 1 | 1 |
| B5 | Average unplanned downtime of each peak usage incident (hours) | Interviews | 1 | 1 | 1 |
| B6 | Average hourly revenue in peak usage | Composite | $1,200,000 | $1,248,000 | $1,297,900 |
| B7 | Percentage of revenue lost due to downtime | Composite | 70% | 70% | 70% |
| B8 | Total revenue affected by unplanned downtime | (B1*B2*B3+B4*B5*B6)*B7 | $1,148,000 | $1,193,920 | $1,241,730 |
| B9 | Profit margin | Composite | 30% | 30% | 30% |
| B10 | Total profit loss due to incidents | B8*B9 | $344,400 | $358,176 | $372,519 |
| B11 | Total SDE time to resolve downtime (hours) | Interviews | 2,400 | 2,400 | 2,400 |
| B12 | Fully burdened hourly rate for an SDE | TEI standard | $78 | $80 | $82 |
| B13 | Total SDE cost to resolve downtime | B11*B12 | $187,200 | $192,000 | $196,800 |
| Bt | Profit retention and cost savings from reduced unplanned downtime | B10+B13 | $531,600 | $550,176 | $569,319 |
| Risk adjustment | ↓10% | ||||
| Btr | Profit retention and cost savings from reduced unplanned downtime (risk-adjusted) | $478,440 | $495,158 | $512,387 | |
| Three-year total: $1,485,986 | Three-year present value: $1,229,131 | ||||
Profit Retention And Cost Savings From Zero-Downtime Upgrades
Evidence and data. Interviewees reported that in the past, their organizations had to periodically upgrade their databases to address security concerns, introduce new features, or fix bugs. For their on-premises, self-managed databases, a well-structured and periodically tested upgrade strategy was crucial to maintain performance and ensure uninterrupted business operations. However, these upgrades required planned system downtime and increased in frequency due to emerging vulnerabilities. By transitioning to Spanner, the interviewees’ organizations eliminated the need for planning and executing upgrades, while still benefiting from the latest features and updated security patches.
- The interviewees’ organizations had to plan several upgrades per year to ensure the performance of their prior environment. The principal engineer from a retail organization said: “We would have usually one major upgrade at most during the year. However, we had a lot of smaller, minor upgrades, especially for security reasons. These smaller upgrades have become more frequent in recent years because there is a lot of hacking going on. We can’t afford to wait for the next major version release.”
- Interviewees praised the way Spanner handled upgrade tasks post-migration. The senior director of engineering at a transportation organization said: “Spanner has saved us time because we no longer have to do maintenance for things like containers, library upgrades, hot patches, security vulnerability patches, etc. We haven’t spent any time on these things since we moved to Spanner.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- In its previous environment, the composite organization planned for four upgrades annually, with each upgrade resulting in an average of 3 hours of planned downtime.
- During the downtime, a loss of 70% of the revenue is expected.
- DBAs dedicate 80 hours of work to planning and executing each upgrade.
Risks. Factors that could potentially influence the attainment of these benefits include:
- The organization’s approach to executing database upgrades.
- The nature of the legacy database environment and its internal management practices.
- The strategy employed for revenue recovery.
- The proficiency level of the in-house DBA team.
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 $692,000.
Profit Retention And Cost Savings From Zero-Downtime Upgrades
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| C1 | Number of database upgrades per year prior to Spanner | Interviews | 4 | 4 | 4 |
| C2 | Average planned downtime during the upgrades (hours) | Interviews | 3 | 3 | 3 |
| C3 | Total planned downtime during database upgrades in the previous environment | C1*C2 | 12 | 12 | 12 |
| C4 | Average hourly revenue in nonpeak time | Composite | $110,000 | $114,400 | $119,000 |
| C5 | Percentage of revenue lost due to downtime | Composite | 70% | 70% | 70% |
| C6 | Total revenue loss due to database upgrades in the previous environment | C3*C4*C5 | $924,000 | $960,960 | $999,600 |
| C7 | Profit margin | Composite | 30% | 30% | 30% |
| C8 | Total profit loss due to database upgrades in the previous environment | C6*C7 | $277,200 | $288,288 | $299,880 |
| C9 | Total DBAs working hours input for each upgrade | Composite | 80 | 80 | 80 |
| C10 | Fully burdened hourly rate for a DBA | TEI standard | $65 | $67 | $69 |
| C11 | Total DBA labor costs for database upgrades in the previous environment | C1*C9*C10 | $20,800 | $21,440 | $22,080 |
| Ct | Profit retention and cost savings from zero-downtime upgrades | C8+C11 | $298,000 | $309,728 | $321,960 |
| Risk adjustment | ↓10% | ||||
| Ctr | Profit retention and cost savings from zero-downtime upgrades (risk-adjusted) | $268,200 | $278,755 | $289,764 | |
| Three-year total: $836,719 | Three-year present value: $691,898 | ||||
Efficiencies Gained In Onboarding New Applications
Evidence and data. According to interviewees, the design, structure, and performance of a database significantly influenced the time required for application design and development. The interviewees’ organizations faced challenges with their legacy databases, which struggled to support the design of powerful applications.
- To onboard an application with an on-premises database, the interviewees’ organizations had to go through an extensive process of planning, designing, testing, and deploying. A tech senior manager at a retail organization explained: “With on-prem, you need to have a three-month plan, determine a budget plan, buy the hardware as well as the racks on the data center, and set up network connections. People do not realize all the steps required to bring a new application onto a server.” By migrating to Spanner, this interviewee’s organization was able to streamline application development. The same interviewee shared: “With Spanner, that time became negligible, and provisioning came down to a day or so. That is the biggest advantage for the development teams — the dollar cost of people and also the ability to deliver fast. This allows us to reach our customers faster.”
- Interviewees reported that Spanner offered a more flexible environment for their organizations to enhance design efficiency. The head of engineering at a financial services organization noted that they built internal automation around Spanner. Since Spanner is fully managed, they could demonstrate compliance with controls such as backups, restores, identity and access management (IAM) controls, and encryption. This enabled them to onboard new applications or functions within weeks.
- Regarding the budget for application development, the tech senior manager at a retail organization mentioned that 60% of their budget was allocated to IT team members due to higher personnel costs. Reducing development time would lead to significant budget savings for their organization.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization develops eight new applications per year. With the legacy database environment, each application requires a team of three SDEs to work for three months with 50% effort.
- By migrating to Spanner, development time is reduced by 80%.
Risks. Risks that could impact the realization of this benefit include:
- The number of new applications developed internally.
- The skill set and expertise of the internal SDEs.
- The level of Spanner adoption.
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 $981,000.
Efficiencies Gained In Onboarding New Applications
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| D1 | Number of new applications onboarded per year | Composite | 8 | 8 | 8 |
| D2 | Application onboarding time in the previous environment (months) | Interviews | 3 | 3 | 3 |
| D3 | Number of SDEs working on the application development | Composite | 3 | 3 | 3 |
| D4 | Percentage of SDE effort | Composite | 50% | 55% | 60% |
| D5 | Fully burdened annual salary for an SDE | TEI standard | $162,000 | $166,900 | $171,900 |
| D6 | Total SDE cost on application onboarding in the previous environment | D1*D2/12*D3*D4*D5 | $486,000 | $550,770 | $618,840 |
| D7 | Application onboarding time reduction with Spanner environment | Interviews | 80% | 80% | 80% |
| Dt | Efficiencies gained in onboarding new applications | D6*D7 | $388,800 | $440,616 | $495,072 |
| Risk adjustment | ↓10% | ||||
| Dtr | Efficiencies gained in onboarding new applications (risk-adjusted) | $349,920 | $396,554 | $445,565 | |
| Three-year total: $1,192,039 | Three-year present value: $980,599 | ||||
Costs Savings From Reduction In Overprovisioning For Peak Usage
Evidence and data. Interviewees noted that scalability was a critical aspect of their databases and essential for ensuring growth and performance. Previously, the interviewees’ organizations had to invest heavily and spend considerable time planning to scale their on-premises database by adding hardware.
- Before moving to Spanner, the interviewees’ organizations lacked the ability to continuously scale their on-premises database up and down. The senior director of engineering at a transportation company explained, “Previously, since we were using our own hardware, we were not able to scale up and down on a continuous basis.” Spanner provided this interviewee’s organization flexibility to safely scale up and down throughout the day, something vital for most businesses. The interviewee added: “Spanner allows us to understand the actual cost allowing us to pay for what we only need. Unexpected costs driven by increases or decreases in traffic has gone away, because traffic patterns are managed by Spanner.”
- With on-demand scalability, the interviewees’ organizations were better equipped to handle traffic spikes. The senior principal architect with the software and technology organization shared: “Spanner is better for us because it reacts promptly to unpredicted transaction spikes. Previously, if someone prepared for a workload, it worked fine but now Spanner does it automatically so no one needs to prepare. For example, if we have hotspots somewhere, we notice that Spanner automatically removes them within 15 minutes to 1 hour.”
- The interviewees from retail organizations explained that scalability was even more critical for their organizations. The principal engineer at a retailer shared: “The nature of retail business is we make 70% of our annual sales over a very short period of time. Our peak days are nearly 13 times the average day, making it challenging to stress test things in advance and to ramp up for all components, i.e., the full spectrum of the code.” In the previous environment, the interviewee’s retail organization took six months to plan and deploy resources for the peak season. Now with Spanner, there was a reduction in time.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- To prepare for peak usage traffic volume, the composite organization spends four months planning, utilizing resources, and deploying resources.
- In terms of human capital, the composite organization needs five DBAs spending 50% of their time and five SDEs spending 30% of their time. The fully burdened annual salary for a DBA is $135,000 in Year 1, increasing 3% annually.
- In anticipation of peak usage, the composite organization adds hardware, which is an additional $200,000 investment in infrastructure in Year 1, growing 10% annually due to an increase in total data.
Risks. Risks that could impact the realization of this benefit include:
- The volume during the peak season.
- The skill sets and expertise of the IT team.
- The capacity of the previous data center.
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 $1.0 million.
Costs Savings From Reduction In Overprovisioning For Peak Usage
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| E1 | Time to prepare peak season per year (months) | Interviews | 4 | 4 | 4 |
| E2 | Number of DBAs work on preparation | Composite | 5 | 5 | 5 |
| E3 | Percentage of DBA effort for preparation | Composite | 50% | 55% | 60% |
| E4 | Total DBAs cost to prepare peak season | E1*E2/12*E3*A5 | $112,500 | $127,508 | $143,300 |
| E5 | Number of SDEs work on preparation | Composite | 5 | 5 | 5 |
| E6 | Percentage of SDE effort for preparation | Composite | 30% | 35% | 40% |
| E7 | Total SDEs cost to prepare peak season | E1/12*E5*E6*D5 | $81,000 | $97,358 | $114,600 |
| E8 | Total additional server and storage unit costs | Composite | $200,000 | $220,000 | $242,000 |
| Et | Costs savings from reduction in overprovisioning for peak usage | E4+E7+E8 | $393,500 | $444,866 | $499,900 |
| Risk adjustment | ↓5% | ||||
| Etr | Costs savings from reduction in overprovisioning for peak usage (risk-adjusted) | $373,825 | $422,623 | $474,905 | |
| Three-year total: $1,271,353 | Three-year present value: $1,045,919 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Improved budget predictability. Interviewees noted that one goal of transitioning to Spanner was reducing capex. With Spanner, interviewees’ organizations could adjust to changes in real-world conditions. Interviewees also noted that on-premises databases can be very expensive and hard to predict with long procurement cycles. The senior director of engineering at the transportation organization shared: “If you just talk about the budget of Spanner, it’s fairly deterministic for us. We now have a pretty good system to determine what Spanner will cost in the future.”
- Facilitated advanced business capabilities and expansion. According to interviewees, the design of databases at their organizations significantly influenced application development and, as business innovation demands grew, the complexity of self-managed IT infrastructure increased. The interviewees’ organizations’ on-premises databases struggled to accommodate new requirements. Spanner provided the flexibility and scalability needed for advanced business capabilities and expansion. The IT director at an online fashion retail organization said: “We need to grow our capacity to accept more currencies, to offer a greater breadth of products, and to have language-specific content. This will all be done using Spanner because using an alternative SQL [structured query language] database would have been too expensive and tedious.”
- Improved flexibility in code testing and deployment. The interviewees reported that their organizations’ databases influenced how code was tested and deployed. Because of this, robust testing and management strategies were essential to ensuring the quality and reliability of their organizations’ software applications. Compared to their organizations’ previous database solutions, interviewees noted that Spanner provided more flexibility in setting up testing and deployment environments for SDEs. The senior principal architect at a software and technology organization commented: “With Spanner, we are able to scale up our development environment to production scale, do proper load tests, and shut it down within days. That’s big! We had few cases where some not so effective code deployed in a specific release. Instead of not going production, we just added capacity to Spanner and optimized the code later. This is one option we haven’t had before.”
- Added value due to Google Cloud customer service. Since Spanner is fully managed, the interviewees’ organizations expected good service from Google Cloud. Interviewees spoke highly of Google Cloud’s services, noting that they always went the extra mile. The head of engineering at a financial services organization provided an example. Their team experienced a performance degradation issue with a critical query in Spanner, causing a slight increase in response time from 6 to 12 milliseconds. The Google Cloud team was highly responsive and provided a detailed explanation instead of dismissing the concern because the system was still functional. The interviewee noted: “The Spanner team are experts. They have a deep understanding of the product they’ve built with deep insights on how we’re using the product if we ask them.”
- Improved system monitoring visibility. Previously, interviewees noted their organizations relied on various third-party tools to monitor performance and resource usage, which was costly and posed integration challenges. Spanner’s embedded tools offered improved visibility, allowing the interviewees’ organizations to be fully aware of the situation. The senior principal architect at a software and technology organization shared: “We have gained a much better way of monitoring with Spanner. We are able to capture everything that happens and keep it on file. So, if there are any specific inquiries, for example, ‘Why does that passenger not have a seat on that plane?’ we know exactly why.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Spanner and later realize additional uses and business opportunities, including:
- Utilizing Spanner’s Autoscaler to further boost performance. Interviewees noted that Spanner allowed automatic adjustment of compute capacity in one or more Spanner instances based on capacity usage. This was beneficial for managing the utilization and performance of Spanner deployments. Several interviewees anticipated the deployment of autoscaling in the near future to enhance performance. The head of SRE, DevOps, and infrastructure at a financial services organization said: “We are planning to use the built-in autoscaler in the next few months. It has improved the performance of other companies, so it will be good for us as well.”
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A ).
Quantified cost data as applied to the composite
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Ftr | Spanner usage costs | $0 | $750,750 | $825,825 | $908,408 | $2,484,983 | $2,047,500 |
| Gtr | Internal implementation efforts | $1,058,400 | $0 | $0 | $0 | $1,058,400 | $1,058,400 |
| Htr | Ongoing operational costs | $0 | $89,100 | $91,806 | $94,578 | $275,484 | $227,931 |
| Total costs (risk-adjusted) | $1,058,400 | $839,850 | $917,631 | $1,002,986 | $3,818,867 | $3,333,831 | |
Spanner Usage Costs
Evidence and data. Interviewees reported that the cost of utilizing Spanner is influenced by several factors, including region, compute capacity, and storage volume.
- While the direct infrastructure costs associated with using Spanner could be higher compared to previous solutions, the overall value it provided the interviewees’ organizations typically outweighed these costs. The senior director of engineering at a transportation organization stated: “For us, on-prem hardware was relatively cheaper than the cloud expense of Spanner. But when taking into account the engineering cost of maintaining a team to build on top of the previous solution and maintaining the dispatch system, Spanner seems to be net effectively positive for us.”
- The price for the interviewees’ organizations also included the costs of managed services, which offered real business value. The head of engineering at a financial services organization said: “When we look at the spectrum of unmanaged to managed, Spanner was at the top end. We did a practical analysis, and the results showed that Spanner was going to be the best in every dimension. Consequently, we picked Spanner. It felt like we took a risk, but we believe that the risk paid off.”
- Pricing may vary. Contact Google Cloud for additional details.
Modeling and assumptions. The cost of Spanner usage is based on factors such as:
- The amount of compute capacity.
- The volume of storage that databases use.
- The volume of storage that backups use.
- The amount of network bandwidth used.
- Based on the size and the business of the composite organization, the annual Spanner usage cost is $715,000 in the first year with a 10% annual growth rate.
Risks. Risks that could impact the cost include:
- The pricing strategy of Spanner.
- The deployment of Spanner within the organization.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.0 million.
Spanner Usage Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Cost of using Spanner | Composite | $715,000 | $786,500 | $865,150 | ||
| Ft | Spanner usage costs | F1 | $715,000 | $786,500 | $865,150 | ||
| Risk adjustment | ↑5% | ||||||
| Ftr | Spanner usage costs (risk-adjusted) | $0 | $750,750 | $825,825 | $908,408 | ||
| Three-year total: $2,484,983 | Three-year present value: $2,047,500 | ||||||
Internal Implementation Effort
Evidence and data. Databases were a critical component of IT infrastructure at the interviewees’ organizations, and any changes to them required careful scrutiny. The interviewees stated that their organizations underwent stages of planning, piloting, and migrating. They had internal teams managing the implementation with support from the Google Cloud team.
The senior director of engineering at a transportation organization shared their implementation experience: “We had a dedicated set of engineers of roughly around eight to 10 who were working for nearly a year. They were building a development framework which did two things: first, they built the interaction with databases like Spanner and second, they built the whole state machine framework.”
Modeling and assumptions. To quantify the internal implementation cost, Forrester assumes the following:
- The composite organization takes eight months to plan, pilot, and deploy Spanner.
- During the implementation phase, four DBAs lead the project with four SDEs providing support.
Risks. Risks that could impact the cost include:
- The structure of the organization and the decision-making process.
- The internal effort required for implementation.
- The expertise and skill set of the team.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV of $1.1 million.
Internal Implementation Effort
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| G1 | Time to fully implement Spanner (months) | Interviews | 8 | |||
| G2 | Number of DBAs involved | Interviews | 4 | |||
| G3 | Number of SDEs involved | Interviews | 4 | |||
| Gt | Internal implementation effort | G1/12*G2*A5+G3*D5 | $1,008,000 | $0 | $0 | $0 |
| Risk adjustment | ↑10% | |||||
| Gtr | Internal implementation effort (risk-adjusted) | $1,058,400 | $0 | $0 | $0 | |
| Three-year total: $1,058,400 | Three-year present value: $1,058,400 | |||||
Ongoing Operational Costs
Evidence and data. As a fully managed service, Spanner required less internal maintenance effort for the interviewees’ organizations. The interviewees reported having significantly smaller teams compared to what they needed in their previous legacy environments.
Modeling and assumptions. To quantify the internal implementation cost, Forrester assumes the composite organization has a team of two DBAs working on Spanner spending 30% of their time on ongoing Spanner management.
Risks. Risks that could impact the cost include:
- The level of deployment of Spanner.
- The complexity of the infrastructure.
- The expertise and the skill set of the DBAs.
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 $228,000.
Ongoing Operational Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| H1 | Number of DBAs needed for ongoing operational | Interviews | 0.6 | 0.6 | 0.6 | ||
| H2 | Fully burdened annual salary for a DBA | TEI standard | $135,000 | $139,100 | $143,300 | ||
| Ht | Ongoing operational costs | H1*H2 | $0 | $81,000 | $83,460 | $85,980 | |
| Risk adjustment | ↑10% | ||||||
| Htr | Ongoing operational costs (risk-adjusted) | $0 | $89,100 | $91,806 | $94,578 | ||
| Three-year total: $275,484 | Three-year present value: $227,931 | ||||||
Consolidated Three-Year, Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits Initial Year 1 Year 2 Year 3-
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 | ($1,058,400) | ($839,850) | ($917,631) | ($1,002,986) | ($3,818,867) | ($3,333,831) |
| Total benefits | $0 | $2,315,885 | $4,387,421 | $2,669,486 | $9,372,792 | $7,736,941 |
| Net benefits | ($1,058,400) | $1,476,035 | $3,469,790 | $1,666,500 | $5,553,925 | $4,403,110 |
| ROI | 132% | |||||
| Payback | 9.0 | |||||
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 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.
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