The Total Economic Impact™ Of Microsoft 365 A5 For Higher Education

Reduced License Costs From Vendor Consolidation

Evidence and data. Transitioning from a point-solution integration model to Microsoft 365 A5 helped interviewees’ and survey respondents’ organizations lower licensing costs. They provided the following examples of how these cost reductions were achieved:

• A chief information officer said their private university had a mix of platforms in place prior to upgrading and consolidating on Microsoft 365 A5. In doing so, this institution eliminated storage costs associated with other solutions, as well as consolidated its security software, leading to cost savings of over $170,000 annually.

• The chief information officer of a public university described the decision to move from Microsoft 365 A3 to A5 as an easy one, noting, “If we purchased all the features we need individually, it would be a lot more cost.”

• The chief information officer of a private university noted that their institution was initially using Microsoft 365 A3, added Defender for Office and Defender for Endpoint, and then performed a mapping exercise to build a business case to move to Microsoft 365 A5. Once their organization identified other tools that could be sunset, the CIO and CTO approved the move to Microsoft 365 A5. The interviewee’s organization also had concerns about storage usage, which were also addressed with the move to Microsoft 365 A5.

• The CIO for a private university explained that they had faced budget cuts with declining student enrollment. However, they were tasked with providing the same level of service for staff and students: “Our strategy used to be all about best-of-breed point solutions, just because I felt like we were able to address those spaces a lot better. But with [declining enrollment], I was constrained to be delivering the same services but with a much smaller budget. Same thing on the people side. I didn’t have the luxury of having my specialist for all these different tools.” The CIO added that they were able to achieve license savings consolidating on A5 and avoid specialist labor by using Microsoft security generalists.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to moving to Microsoft 365 A5, the composite organization’s cost for the prior security, compliance, and privacy solutions was 55% higher than the total Microsoft 365 A5 license cost of $117 per employee per year.

• The institution eliminates this cost after implementing Microsoft 365 A5.

• Only 75% of the benefit is realized in Year 1 as some prior solution license agreements expire.

Risks. The following risks impact the size of this benefit:

• The amount of cost elimination is dependent on the prior state of the organization; this amount varied between the interviewees’ institutions.

• Security needs also impacted the alternate solutions that an organization would need if not using Microsoft 365 A5, which introduces variability in this benefit.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $145,000.

Strengthened Security

Evidence and data. Interviewees noted that Microsoft 365 A5 includes more than 30 security, compliance, and privacy features not included in Microsoft 365 A3. Because they were all from a single vendor, these capabilities offered tight integration and improved the interviewees’ organizations’ security postures in terms of the number and severity of breaches. This improved posture reduced downtime and cost after a cyber event, protected the interviewees’ organizations’ public reputation, and limited the disruption to teaching. Interviewees and survey respondents shared the following examples of how their organizations’ security postures improved:

• The deputy CIO and executive director of technology operations at a public university described using the advanced audit features to trace potential security incidents and resolve them without extended investigation and remediation, saving the IT security team time and effort. This was particularly useful for events that were determined to be due to user error rather than malicious activity. They shared: “We have compromised accounts all the time. [Microsoft 365 A5’s audit features] help contain the time we spend resolving them.”

• The CIO of a private university described a security incident with an alternate solution in place prior to Microsoft 365 A5. They cited the user fatigue with the multiple tools as driving these kinds of incidents, adding, “They just kept clicking the button when they shouldn’t have.”

• The CISO at a public university highlighted the difficulty of managing identity and access at a large university with multiple schools and departments. They added that A5 was a critical tool for them in preventing exposure of sensitive information: “We’re depending on with these A5 features like conditional access policies and the ability to gate and limit and scope the authorization of access layers for our applications. It’s reducing the attack surface of our applications exposed to the internet. It’s also limiting access to our data and applications to a need to know or minimal set.”

• Among survey respondents, 78% cited improved threat protection and security (including identity) posture as a key outcome of adopting Microsoft 365 A5.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The total annual risk exposure for the composite organization is approximately $1.4 million based on Forrester security survey data and scaled to the size of the institution.² 

• There are two parts to the benefit calculation: 1) the benefit associated with reduction in the overall number of breaches and 2) the benefit associated with reduced cost of the remaining breaches, including improved remediation.

• The reduction in the overall number of breaches is 20% by Year 3, and the reduction in cost of remaining breaches is 30% by Year 3.This represents an incremental improvement over the prior state, including the tools and processes that were previously in place to maintain security.

Risks. The following risks impact the size of this benefit:

• The total risk exposure is highly variable between organizations.

• Variability in improvement in both breach avoidance and breach cost.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.2 million.

Avoided Additional IT Security Team Member Hires

Evidence and data. According to interviewees, compared to a multivendor security stack, Microsoft 365 A5 improved IT security team efficiency and effectiveness through integrated solutions, centralized visibility, and built-in automation. This streamlined breach prevention, detection, and remediation; reduced management effort; and enabled teams to handle greater workloads without adding headcount. Interviewees and survey respondents shared examples of these gains:

• The CTO at a public community college said: “It’s valuable to have everything monitored under one platform; it’s better for our stretched IT department. It’s having one platform vs. different systems, looking at different alerts.”

• Multiple interviewees described the additional staff they would have needed if not using Microsoft 365 A5, indicating increased need for training and specialization. All specified that they would need additional IT security staff, while some identified additional resources that would be required in systems, reporting, and integration.

• The CIO at a private university said: “The systems team really likes having one pane of glass; it’s one tool that they understand and know. It’s improving job satisfaction.”

• The CISO for a public university explained that a key consideration when considering the step up from A3 to A5 is the additional labor they avoided: “If I were trying to make the jump up to A5 [now], I would look at it in terms of the number of bodies I have to hire in order to do this extra work that these automations and telemetry and extra data could do for me. We could do more with less people if we had this extra set of capabilities.”

• Among survey respondents, 72% said that they were able to lower internal IT costs due to less security and IT team efforts. The figure below shows the IT groups whose efficiency was most improved by the adoption of Microsoft 365 A5.

Modeling and assumptions. Based on the interviews and survey, Forrester assumes the following about the composite organization:

• The composite organization avoids adding incremental headcount to the IT security team due to the efficiencies gained through the use of Microsoft 365 A5.

• The institution avoids an additional 50% of the IT security team, or two FTEs.

Risks. The risk that applies to the size of this benefit is that rather than keeping to the same level of responsibility, some organizations increased the tasks that the security team were able to cover. This reflects the increased efficiency gain with Microsoft 365 A5, as well as improved security practices, but introduces variability in the amount of staff headcount that can be avoided.

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 $514,000.

Reduced Employee Downtime 

Evidence and data. Faculty and staff at interviewees’ and survey respondents’ organizations experienced less downtime due to fewer successful breaches and faster remediation of those that did occur. Additionally, security tools like SSO and MFA saved users’ time. For the interviewees whose organizations moved from on-premises applications to a cloud-based platform, Microsoft 365 A5 also helped reduce downtime associated with on-premise solutions. Interviewees and survey respondents shared the following examples of reduced downtime:

• Interviewees agreed that the improved security associated with the move to Microsoft 365 A5 reduced the impact of security incidents on faculty and staff.

• Several interviewees mentioned the advantage of moving away from an on-premises solution in reducing downtime. The CTO at a public community college said, “We don’t have to worry about hardware, patching, or constant updates.” The CIO at a private university cited power problems leading to regular outages up to once a month for hours at a time.

• The chief information officer of a public university reported: “The ability to remain functional during a cyber incident is really important. The alternative is to be down for 10 to 14 days.”

• Survey respondents indicated that non-IT employees saved over 300 hours a year due to the adoption of Microsoft 365 A5; this impact was split between self-service time savings and less downtime.  

Modeling and assumptions. Based on the interviews and survey, Forrester assumes the following about the composite organization:

• The composite organization saves approximately 20 minutes per week for both faculty and staff.

• In Year 1, 50% of the benefit is realized as the solution is deployed and users become accustomed to it.

• Forrester assumes a conservative 25% of the time saved is redirected into productive work.

Risks. The following risks impact the size of this benefit:

• Productivity gains are very dependent on the use of the time saved, which is variable based on both the organization and the individual.

• The hourly rates for both faculty and staff vary widely between institutions as well as across regions.

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 $414,000.

Eliminated Costs Due To Power BI And Microsoft Teams Phone

Evidence and data. In addition to the cost savings achieved through the consolidation and elimination of duplicative security solutions, interviewees mentioned both Power BI and Microsoft Teams Phone as applications where the move to Microsoft 365 A5 yielded additional opportunities for cost savings. Both solutions are included in Microsoft 365 A5, allowing the interviewees’ organizations to eliminate prior costs in both areas.

• Most of the interviewees specifically cited Power BI as a driver to adopt Microsoft 365 A5. For those whose institutions provided the application for a sizable group of users, it was a significant cost elimination.

• Two of the interviewees said their organizations were planning to retire their legacy phone systems after implementing Microsoft Teams Phone as part of their Microsoft 365 A5 deployment. The CTO of a public community college estimated this legacy cost between $50,000 and $60,000, while the deputy CIO and executive director of technology operations projected a number of related costs that could potentially be eliminated, which would reach over $2 million over time.

• Nearly three-quarters (74%) of survey respondents indicated that their organization had better data analysis following the adoption of Microsoft 365 A5.

Modeling and assumptions. Based on the interviews and survey, Forrester assumes the following about the composite organization:

• For the composite organization, the number of Power BI users is set at 10% of the total employee user population. While this is higher than average for corporate settings, it is representative of the academic community.

• The annual cost per user is $14 per month.

• The Microsoft Teams Phone deployment and retirement of the legacy phone system is expected to start in Year 2 of the analysis. The cost elimination for the legacy phone system replaced by Microsoft Teams Phone is estimated at $60,000 annually, with 50% of this total accruing in the Year 2 and reaching 100% in Year 3.

Risks. The following risks impact the size of this benefit:

• The cost savings associated with eliminating Power BI licenses is entirely dependent on the proportion of the users who need this application.

• Not every organization is able to replace legacy phones with Microsoft Teams Phone, and for those that do, they may not be able to completely eliminate the legacy costs associated with the prior system.

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 $113,000.

Unquantified Benefits

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

• Productivity gains through the use of Copilot Chat. All interviewees discussed the impact of having Copilot Chat available to all users within their organizations. For faculty, interviewees cited the use of Copilot Chat in creating lesson plans, quizzes, and reports; for staff, use cases included summarizing long documents and understanding legislation, among others. The deputy CIO and executive director of technology operations at a public university said, “We’re just starting to see the innovation people are creating.” The CIO at a private university shared, “Copilot is enhancing output overall and it’s much faster.” Most interviewees’ institutions also had a subset of Microsoft 365 Copilot users; this benefit is discussed below under Flexibility.

• Improved security and compliance efforts with Purview. Several interviewees mentioned that the use of Purview was instrumental in their improved security processes, particularly in investigating compromised accounts. Additionally, Purview was used in tandem with Microsoft 365 A5 to support AI initiatives and pilot programs. The deputy CIO of a large university said that “Purview paid off right away.”

• Additional opportunities through flexible learning models. The CTO of a public community college said: “Microsoft 365 A5 is lowering the hurdle for students to get online. They are familiar with the tools, and the barrier to entry is much lower. They’re better organized with their schoolwork.” Faculty experienced similar benefits; Microsoft 365 A5 also facilitated online teaching. The same interviewee shared, “We’re able to extend a lot of the tools we use beyond our four walls.”

• Protecting reputation. The CISO for a public university explained: “But the broader thing that we’re doing when we’re using the general cloud DLP [is making] sure we’re not exposing data [or] incorrectly watching regulated research data. That has that secondary function of protecting the university’s reputation.” They added that protecting their university’s reputation was a key component of maintaining public/private and government research grants.

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Microsoft 365 A5 and later realize additional uses and business opportunities, which would yield additional benefit after incremental investment. For the purposes of this analysis, we have quantified the benefit of implementing Microsoft 365 Copilot for a select group of users.

Evidence and data. Several of the interviewees said their organizations established pilot programs to explore the use of Microsoft 365 Copilot. These selected groups held paid licenses which allowed them to use the more robust AI functionality associated with this solution. As part of the pilot program, users were instrumental in driving innovation across campus to boost efficiency, streamline processes, and lead institutional change.  

• The CIO at a private university provided survey results for their pilot group, in which 81% of users confirmed that Microsoft 365 Copilot had increased their productivity; 83% estimated time savings at 1 to 5 hours per week, while an additional 5% estimated a higher number of hours, between 6 to 10 hours per week.

• The deputy CIO and executive director of technology operations said their public university also surveyed Microsoft 365 Copilot users: 98% of users reported that “they feel having fully funded access to M365 Copilot empowers them to support our commitment to excellence and innovation.” Users at this interviewee’s university reported that top tasks where users save the most time are writing emails/communication (65%) and creating documents or content (56%).

• The chief information officer at another public university reported that Microsoft 365 Copilot users were able to decrease time on routine tasks, and that the time savings were “alleviating the strain of vacant positions,” allowing their organization to avoid additional hiring.

• Survey results from the deputy CIO and executive director of technology operations’s public university also captured the categories of improvement due to the use of Microsoft 365 Copilot, including:

  • Higher-quality outputs (documents, lesson plans, etc.) (78%).
  • Reduction in errors (51%).
  • Faster decision-making (49%).
  • Project acceleration (45%).
  • Better customer/student interactions (39%).

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The number of users in the Microsoft 365 Copilot pilot group is initially 15% of the total users in Year 1 and grows to 23% in Year 2 and 30% in Year 3.

• Users save approximately 1.5 hours per week; as in the previous productivity benefit calculation, 25% of this time savings is expected to be redirected into productive work.

Costs. The additional investment required for this benefit is the cost of the Microsoft 365 Copilot licenses, which is $30 per user per month, as well as time spent on training as well as user discovery and experimentation.

Risks. The risks that impact the size of this benefit include the use of AI in the organization, which is very dependent on specific use cases and user adoption. Therefore, this benefit has inherent variability depending on the specifics of the institution.

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 $543,000. This benefit is calculated to demonstrate the value of the additional investment in Microsoft 365 Copilot; it is not included in the core model results.

Flexibility quantification when evaluated as part of a specific project is described in more detail in Total Economic Impact Approach.