The Total Economic Impact™ Of Microsoft Azure Virtual Desktop
Cost Savings And Business Benefits Enabled By Azure Virtual Desktop
A Forrester Total Economic Impact™ Study Commissioned By Microsoft, March 2024
As the global workforce continues to be comprised of distributed organizations and a sizeable percentage of remote and hybrid workers, companies are invested in ensuring employees can work securely from anywhere. Organizations that migrate to Microsoft Azure Virtual Desktop may experience improved productivity, faster onboarding, improved security postures, and reduced costs of licensing and IT infrastructure compared with their legacy environments.
Azure Virtual Desktop is a cloud-based virtual desktop solution. Using Azure Virtual Desktop, companies can grant employees and third-party contractors secure access to desktops and applications from anywhere in the world without requiring investment in on-premises infrastructure. Microsoft offers Azure Virtual Desktop as an entitlement under a set of eligible licenses to businesses running Microsoft 365.
Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Azure Virtual Desktop.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Azure Virtual Desktop on their organizations.
Return on investment (ROI)
212%
Net present value (NPV)
$4.55M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives of four organizations with experience using Azure Virtual Desktop. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization.
Interviewees said that prior to using Azure Virtual Desktop, their organizations’ virtual desktop infrastructure (VDI) environments ran on-premises. The interviewees’ organizations experienced escalating infrastructure costs, capacity limitations, inflated IT workloads, and persistent vulnerabilities. These issues often resulted in poor end-user experiences that were prone to disruption from connectivity issues, and they hindered the organizations’ ability to respond to business demands.
After investing in Azure Virtual Desktop, the organizations reduced licensing costs and IT infrastructure investments while improving security postures. Key impacts of the investment include accelerated end-user onboarding, increased productivity from reduced outages and latency, decreased help desk tickets, and reduced IT admin time spent on application and software deployment, security, and patching.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- 12 hours of outages avoided per year worth $3.9 million. Before using Azure Virtual Desktop, 60% of the composite organization’s end users experienced hour-long outages per month during peak hours, and 30% experienced persistent latency issues with virtual machines delivered by on-premises servers. With Azure Virtual Desktop, the composite organization reduces latency and major outages. Over three years, the resulting end-user productivity lift amounts to savings of $3.9 million for the composite organization.
- 75% reduction in end-user onboarding time worth $750,000. By adding new users to Azure Virtual Desktop or moving existing users from legacy platforms to Azure Virtual Desktop, the composite organization reduces the time its end users spend waiting for applications necessary to begin working. The composite’s end users also experience fewer connectivity issues, which leads to a 70% reduction in help desk tickets filed and reduces disruptions to end-user workflows. Over three years, accelerated onboarding and savings from reduced help desk tickets are worth $750,000 to the composite organization.
- 50% reduction in IT time spent on deployment, security, and help desk support worth $652,000. With Azure Virtual Desktop, the composite organization’s IT team experiences faster application, software, and operating system (OS) deployment, as well as a reduction in time spent on security, patching, and addressing help desk tickets. Over three years, the IT productivity savings are worth $652,000 to the composite organization.
- Reduced costs of licensing and IT infrastructure worth $1.4 million. By migrating from its prior virtual desktop infrastructure running on-premises to a cloud-only or hybrid environment with Azure Virtual Desktop, the composite organization eliminates the licensing costs associated with the previous solution and reduces its infrastructure and maintenance costs. As a result, the composite organization experiences savings of $1.4 million over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Efficiency of cross-team collaboration due to device flexibility and role-based access. With role-based access controls on Azure Virtual Desktop, the composite’s teams are equipped to lend workers to each other in order to cross-train, relieve workloads, or collaborate across departments.
- Speed to value with increased agility. Interviewees from agile organizations said that rather than waiting for a complete setup and incurring associated costs, their companies experienced shorter sprints than they did before with the ability to shift resources depending on workload needs.
- Improved resiliency. Scalability capabilities available to organizations using Azure Virtual Desktop enable the composite organization to maintain productivity on its teams even when faced with unexpected costs from other vendors, increases to business demands, or unforeseen crises.
- Better provisioning for mergers and acquisitions. Interviewees from organizations undergoing mergers and acquisitions attributed their companies’ ability to quickly provision its new teams to Azure Virtual Desktop.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Compute, storage, and networking costs of $1.8 million. The composite organization is eligible for Azure Virtual Desktop at no additional licensing costs. It experiences a decrease of compute costs with improved efficiency and an increase of storage costs due to expected growth over the course of three years. The compute, storage, and networking costs total $1.8 million over three years for the composite organization.
- Migration costs of $229,000. The composite organization requires five FTEs who dedicate 100% of their time over three months for the migration to Azure Virtual Desktop. Migration costs total $229,000 over three years for the composite organization.
- Ongoing management costs of $137,000. The composite organization requires one FTE who dedicates 30% of their time to ongoing management. This cost totals $137,000 over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $6.70 million over three years versus costs of $2.15 million, adding up to a net present value (NPV) of $4.55 million and an ROI of 212%.
Key Statistics
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Return on investment (ROI)
212%
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Benefits PV
$6.70M
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Net present value (NPV)
$4.55M
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Payback
<6 months
Benefits (Three-Year)
End-user productivity lift from reduced outages, login time, and latency End-user savings from faster onboarding and reduced helpdesk tickets Accelerated deployment, imrpoved security, and reduced ongoing management savings Reduced costs of licensing and IT infrastructureTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Azure Virtual Desktop.
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 Azure Virtual Desktop can have on an organization.
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Due Diligence
Interviewed Microsoft stakeholders and Forrester analysts to gather data relative to Azure Virtual Desktop.
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Interviews
Interviewed five representatives at four organizations using Azure Virtual Desktop 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 Microsoft 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 Azure Virtual Desktop.
Microsoft 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.
Microsoft provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Chengcheng Dong
Nahida Nisa
Drivers leading to the Azure Virtual Desktop investment
Interviews
| Role | Industry | Headquarters | Employees | Azure Virtual Desktop Users |
|---|---|---|---|---|
| Product owner of team device services | Education | Netherlands | 3,500 | 3,500 faculty employees 35,000 students |
| Head of platform infrastructure | Fast-moving consumer goods | Switzerland | 80,000 | 6,500 external partners |
| IT system engineers (2) | Cable broadband | Belgium | 3,400 | 2,200 partners working offshore |
| Client engineering lead | Financial services | United Kingdom | 1,700 | 1,400 employees 50 external partners |
Key Challenges
Before investing in Azure Virtual Desktop, interviewees’ organizations ran on-premises virtual desktop infrastructure solutions with high administrative costs. Each interviewee noted that their organization’s prior environment was slow, which incited elevated volumes of end-user tickets and degraded the organization’s ability to adapt to business demands.
The interviewees noted that their organizations struggled with common challenges, including:
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Aging on-premises infrastructure resulted in workflow inefficiencies that stalled onboarding of new and existing users. The client engineering lead at a financial services organization said their organization needed to retire aging infrastructure — including a prior 2008 server — and explained that this introduced an opportunity to explore Azure Virtual Desktop.
As a result of the organization’s reliance on old servers, teams experienced a decelerated onboarding experience, which presented a challenge particularly when the organization needed to hire quickly. The interviewee said: “When we had large amounts of new joiners, we weren’t able to accommodate them from an infrastructure perspective very easily. It would often take too long to spin up new resources — and that’s if we could spin them up, because we were fairly limited.”
Each interviewee said their organization was interested in a solution compatible with cloud-first strategies. The head of platform infrastructure at a fast-moving consumer goods company said: “One of the pain points was that [the prior environment] was such a large estate. It’s very cumbersome to manage the amount of infrastructure — to continually patch, maintain, and replace those servers and extend the infrastructure. That was part of our decision. All that infrastructure kept growing and growing and growing. Our company strategy for a number of years has been to move to cloud anyway.”
Interviewees said it was difficult to scale on-premises infrastructure, especially when their organizations underwent mergers and acquisitions. -
Capacity limitations, software stack incompatibility, and escalating maintenance costs hindered business operations. An IT system engineer at a cable broadband organization described using obsolescent platforms that were unable to run newer applications: “[The previous] platform was at its end of life, but the maintenance of the [infrastructure] layer was also a challenge. With that, there were capacity limitations, and the high administrative cost against work and incompatibility sometimes from the software stack — which could also be hardware-related — or newer applications that weren’t a fit for the older platform.”
For the organization, the capacity limitations meant slowed business operations with escalated costs associated with additional hardware and workloads. The interviewee said: “We had to buy hardware and wait on delivery time for hardware to arrive. Then we needed to rack and stack within our environment before we could onboard extra capacity, meaning other workloads or additional users.” The interviewee also said hardware would often take weeks to arrive, impacting productivity.
The head of platform infrastructure at the fast-moving consumer goods company also described struggling with meeting business demands: “The primary reason [my organization switched to Azure Virtual Desktop] was not being able to respond to business demand in a timely fashion. There were times where we actually ran out of infrastructure. So, we literally had no more infrastructure to provide to our customers and third parties, which hampered business operations.” -
Systems slowed down or crashed, which created frustrating end-user experiences and inflated IT workloads. Interviewees described prior environments plagued with latency or outages. The product owner of team device services at an educational institution said: “We had a VDI environment, mostly for faculty. Students did have access, but it was quite slow and ran internally on our own servers because it was always running in our campus and not in the cloud.”
The client engineering lead at the financial services organization said, “We had lots of user tickets just complaining that [the previous solution] would just throw them out, crash, etc.”
In response, the service desk IT team responded to increased volumes of help desk tickets compared to help desk tickets for Azure Virtual Desktop. -
Poor security posture posed risks in the prior solutions. The product owner of team device services at the educational institution said a lack of security updates was a concern: “[With our previous solution,] we didn’t get hacks, but there were a lot of security holes. It was very weak security. We didn’t get updates anymore. A lot of applications were vulnerable for security hacks, so it was a bad security system to use.”
The head of platform infrastructure at the fast-moving consumer goods company said that in their organization’s prior environment, employees had admin rights on their local machines, which wasn’t ideal for the organization: “We tried to police it as much as possible, of course. But it was always the case over a successive number of years that you had a number of security issues: people with unregulated local admin access, apps being installed that weren’t authorized, [and] a lack of multifactor authentication or conditional access.”
Solution Requirements/Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Provide ease of implementation and control.
- Offer better cost per user, scalability, and flexibility.
- Support cloud-first strategies.
- Support multisession.
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 five interviewees across four organizations, 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 global, multibillion-dollar business-to-business organization employs employees and contractors across five branches, and 3,500 of these end users use Azure Virtual Desktop for remote or hybrid work. Of the 3,500 end users, 2,500 are employees and 1,000 are offshore independent contractors who provide skills in finance, IT, and customer service. Approximately 60% of the 3,500 remote or hybrid end users experience outages, and 30% experience latency and login issues stemming from the organization’s environment prior to deploying Azure Virtual Desktop.
Deployment characteristics. The composite organization begins by rolling out Azure Virtual Desktop to a small group of developers in the first month. The organization then releases Azure Virtual Desktop team-by-team and fully deploys Azure Virtual Desktop to end users based in all five of its branches within three months. All 3,500 Azure Virtual Desktop users are equipped by Year 1 when the organization begins realizing the full benefits of the Azure Virtual Desktop deployment.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | End-user productivity lift from reduced outages, login time, and latency | $1,573,425 | $1,573,425 | $1,573,425 | $4,720,275 | $3,912,875 |
| Btr | End-user savings from faster onboarding and fewer help desk tickets | $544,320 | $161,595 | $161,595 | $867,510 | $749,795 |
| Ctr | Cost savings from accelerated deployment, improved security, and reduced ongoing management | $262,080 | $262,080 | $262,080 | $786,240 | $651,754 |
| Dtr | Reduced costs of licensing and IT infrastructure | $558,000 | $558,000 | $558,000 | $1,674,000 | $1,387,663 |
| Total benefits (risk-adjusted) | $2,937,825 | $2,555,100 | $2,555,100 | $8,048,025 | $6,702,087 | |
End-User Productivity Lift From Reduced Outages, Login Time, And Latency
Evidence and data. Each interviewee noted that the latency and login issues their organizations experienced in their prior environments improved after switching to Azure Virtual Desktop, and that this boosted the productivity of end users. Several interviewees described impacts of connectivity issues to both productivity and overall user experiences.
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Both the head of platform infrastructure in the fast-moving consumer goods industry and the client engineering lead in the financial services industry remarked about how their organizations’ prior environments had slow response times to user commands.
The head of platform infrastructure described that outages and latency were triggers to move to Azure Virtual Desktop: “People would use a mouse click, and then it would take five seconds. [The user experience] was very, very poor. The teams couldn’t troubleshoot. They couldn’t figure out why that was happening. That happened on multiple occasions [before Azure Virtual Desktop and] that hasn’t happened since.”
The client engineering lead described slow start times specifically in the context of logging in to begin work: “[The user] would click on something, for example, and it might take them two or three attempts. We had some people who would have to start work at 6 a.m. to log in properly when they didn’t start to actually work until 7:30 a.m.”
The interviewee said these incidents affected the productivity of a group of 30 people at their organization and that Azure Virtual Desktop eliminated the issue. -
The product owner of team device services in education said the single sign-on feature with Azure Virtual Desktop was an improvement for their organization. In its prior environment, the organization had used multifactor authentication that was separate from Microsoft and the identity management system, which created an extra step.
The interviewee said: “[With Azure Virtual Desktop,] your employee laptop is ready and fully integrated with Microsoft 365. If you log in to your laptop with your Microsoft account, it’s already logged in to Azure Virtual Desktop with multifactor authentication. So, technically, [users] do not need to login. It’s just a click on the link or desktop, and you can start.”
The product owner said this saved users 3 to 4 minutes per login. -
Interviewees’ teams also suffered from significant outages in their organizations’ prior environments. The head of platform infrastructure in the fast-moving consumer goods industry said: “Before [using] Azure Virtual Desktop, we had probably three significant outages. One was due to running out of infrastructure. The other two were performance problems, which took the teams a long time to troubleshoot. [With Azure Virtual Desktop,] we haven’t had an outage since.”
The interviewee explained that the three outages which occurred roughly two to six months apart affected the entire user base at the time, which was approximately 2,500 users. For three days, they were unable to use the service during the outages.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization’s VDI in the prior environment experienced 1 hour of outage per month each year, and this affected 60% of its 3,500 end users.
- The composite avoids these outages with Azure Virtual Desktop.
- In the previous environment, 30% of the composite organization’s end users were affected by login and latency-related disruptions.
- With Azure Virtual Desktop, users save 6 minutes per day on login attempts.
- The average hourly burdened rate of an end user is $45.
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The amount of time the organization spends on security-, latency-, and connectivity-related downtime per end user in its prior environment.
- The average fully burdened hourly rate of Azure Virtual Desktop end users.
- External factors that may affect latency and connectivity after the Azure Virtual Desktop implementation, such as continental distance between users and the organization’s infrastructure.
- The amount of productivity recaptured per end user.
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 $3.9 million.
End-User Productivity Lift From Reduced Outages, Login Time, And Latency
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Total Azure Virtual Desktop end users | Composite | 3,500 | 3,500 | 3,500 |
| A2 | Average burdened hourly rate of an end user | Assumption | $45 | $45 | $45 |
| A3 | Percentage of end users affected by outages before Azure Virtual Desktop | Interviews | 60% | 60% | 60% |
| A4 | Outage time during peak hours before Azure Virtual Desktop (hours) | Interviews | 12 | 12 | 12 |
| A5 | Subtotal: End-user cost savings from reduced outages with Azure Virtual Desktop | A1*A2*A3*A4 | $1,134,000 | $1,134,000 | $1,134,000 |
| A6 | Percentage of end users affected by login time and latency-related disruptions | Interviews | 30% | 30% | 30% |
| A7 | End-user time saved with faster login and reduced latency (hours) | Interviews | 0.10 | 0.10 | 0.10 |
| A8 | Productivity recapture | Assumption | 50% | 50% | 50% |
| A9 | Subtotal: End-user savings from faster login time and reduced latency | A1*A6*A7*A8* | $614,250 | $614,250 | $614,250 |
| At | End-user productivity lift from reduced outages, login time, and latency | A6+A9 | $1,748,250 | $1,748,250 | $1,748,250 |
| Risk adjustment | ↓10% | ||||
| Atr | End-user productivity lift from reduced outages, login time, and latency (risk-adjusted) | $1,573,425 | $1,573,425 | $1,573,425 | |
| Three-year total: $4,720,275 | Three-year present value: $3,912,875 | ||||
End-User Savings From Faster Onboarding And Reduced Help Desk Tickets
Evidence and data. Interviewees reported faster onboarding time of users with Azure Virtual Desktop. They said end users’ productivity also accelerated because they no longer need to wait for applications.
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The client engineering lead in financial services noted that their organization had an onboarding goal of two weeks that it did not meet in its prior environment. Frequently, onboarding was delayed an additional week. The interviewee explained: “And that’s if we didn’t have to build any new servers. If we had to build new servers in the cloud, we’d then have to have a team working on scrum, so we’d need two weeks [for] scrum and two weeks [for] planning. Quite often in that case, it could be probably six weeks or more before something could get into the pipeline to get built.”
With Azure Virtual Desktop, the organization no longer misses its two-week onboarding goal. - In addition to speed, interviewees also spoke about the ease of onboarding with Azure Virtual Desktop. An IT system engineer at the cable broadband company said: “Onboarding now is just installing software and using it. That’s now 5 to 10 minutes. [In the prior environment,] it involved certificate management and lots of other things. So, you would spend at least half a day before someone could get started. … So, there’s at least four times reduction in the time that it was ready for someone to get started.”
- The same interviewee noted that application delivery is faster for end users with Azure Virtual Desktop: “People [previously] had to wait for their applications to come in. Now, everything is just there. Whatever someone needs on a particular team, they can just sign in and have their apps. So, you could say that it’s reduced at least four times.”
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Interviewees also said onboarded end users also learned their environments better with Azure Virtual Desktop. Interviewees reported a noticeable reduction in IT help desk tickets after switching to Azure Virtual Desktop:
- The client engineering lead in financial services said their organization experienced an 83% reduction in help desk support tickets.
- The IT system engineers at the cable broadband company said their organization experienced a 75% reduction in help desk support tickets.
- The product owner of team device services in educational said their institution experienced a 90% reduction in help desk support tickets.
- The head of platform infrastructure at the fast-moving consumer goods company said their organization experienced a 30% reduction in help desk support tickets.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- In Year 1, the composite organization onboards 3,500 FTEs onto Azure Virtual Desktop. In Years 2 and 3, the composite organization experiences a standard 10% turnover rate and onboards 350 users each year.
- With Azure Virtual Desktop, the composite organization saves 75% of the 4 hours previously spent onboarding in the prior environment.
- End users at the composite organization lose 30% of an hour (i.e., 18 minutes) to each help desk ticket filed.
- Because the composite’s users are more comfortable with and knowledgeable of Azure Virtual Desktop, this results in a 70% decrease of the previous 14,000 help desk tickets per year in the prior environment.
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The organization’s onboarding process and the time required to onboard users in the prior environment.
- The complexity of the organization’s prior environment and the number of help desk tickets filed.
- The time and productivity lost to each help desk ticket.
- The number of end users who switch to Azure Virtual Desktop.
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 $750,000.
End-User Savings From Faster Onboarding And Reduced Help Desk Tickets
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| B1 | FTEs onboarded | Composite | 3,500 | 350 | 350 |
| B2 | Onboarding time per end user before Azure Virtual Desktop (hours) | Interviews | 4 | 4 | 4 |
| B3 | Reduction in onboarding time of end users with Azure Virtual Desktop | Interviews | 75% | 75% | 75% |
| B4 | Subtotal: End-user cost savings with faster onboarding with Azure Virtual Desktop | A2*B1*B2*B3 | $472,500 | $47,250 | $47,250 |
| B5 | Support tickets per year in previous environment | Composite | 14,000 | 14,000 | 14,000 |
| B6 | End-user time lost per ticket before Azure Virtual Desktop (hours) | Interviews | 0.30 | 0.30 | 0.30 |
| B7 | Support ticket reduction with Azure Virtual Desktop | Interviews | 70% | 70% | 70% |
| B8 | Subtotal: End-user cost savings with support ticket reduction with Azure Virtual Desktop | A2*B5*B6*B7 | $132,300 | $132,300 | $132,300 |
| Bt | End-user savings from faster onboarding and reduced help desk tickets | B4+B8 | $604,800 | $179,550 | $179,550 |
| Risk adjustment | ↓10% | ||||
| Btr | End-user savings from faster onboarding and reduced help desk tickets (risk-adjusted) | $544,320 | $161,595 | $161,595 | |
| Three-year total: $867,510 | Three-year present value: $749,795 | ||||
Accelerated Deployment, Improved Security, And Cost Savings From Reduced Ongoing Management
Evidence and data. Interviewees said their organizations experienced cost reductions from decreased time spent on IT workloads including application, OS, and software deployment and maintenance as well as security, patching, and general help desk support.
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Regarding accelerated application and software deployment, the client engineering lead at the financial services organization said: “It’s definitely faster. The reason is that we’re able to use [a partner] tool with Azure Virtual Desktop to do quite a bit of scripting. We build the image and then roll out some of the applications by script on top of or after the image is provided. It’s probably 45 minutes maximum, whereas, before it could take up to 8 hours to push out to somebody.”
With Azure Virtual Desktop, the organization also automated the deployment and patching process: “Within half a day, we can patch all of our Azure Virtual Desktop machines, as opposed to a week patching window on desktops.” -
An IT system engineer at the cable broadband company noted that on application and software deployment and maintenance, the team experienced 50% of time saved.
The interviewee explained that the team is using a different method of deployment with Azure Virtual Desktop and that with the prior solution, the team deployed applications and software on static servers. They packaged, tested, and deployed with no set schedule. The IT system engineer said: “Now, we are putting all of the applications in the image itself. So, there’s a set schedule that you have for when all the applications must be in the image to become available to the users. Then, for the rest of the month, we’re not actually deploying to the image. The packaging team does its own thing for testing. The amount of effort saved is quite huge in this case.” - An IT system engineer at the cable broadband company also explained that maintenance is mostly related to patching and configuration: “Now, configuration is set and done. You do it via GPOs (Group Policy Objects) instead of putting in the image itself. Earlier, we had to do patching on each server. If there was anything to troubleshoot, it was very difficult because we had a set amount of servers and a large number of users. If you put one in drain mode, the load increased on the rest, and we couldn’t do much. There’s definitely a 50% reduction there in maintenance.”
- In addition, several interviewees remarked about the improved security with Azure Virtual Desktop. The product owner of team device services in the education sector noted: “[Azure Virtual Desktop] is completely safe because the security is so tight that it’s almost impossible to hack it. We had an audit six months ago, and they’d never seen such a secure environment as the Azure Virtual Desktop environment because you cannot access it. If you don’t have an administrator account, it’s impossible to get in.”
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Interviewees also reported that, once set up, security postures became much easier to manage. The head of platform infrastructure in the fast-moving consumer goods industry noted that one of the byproducts of a multisession approach is having strict security rules in a shared environment: “Basically, nobody is allowed access or has any administrative privilege to the machine because, if they do something, it will compromise other people using that host, for example. So, the byproduct is that we get a better security posture because no one can do anything that’s unauthorized. So, we keep them within a very tight security boundary. … The setup was actually not very difficult at all. I remember when we set up the multifactor authentication, for example, it’s literally a couple of tick boxes.”
The interviewee added, “We use 50% fewer resources for the IT team to manage Azure Virtual Desktop.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- Two IT admin FTEs dedicate 50% of their time to application, software, and OS deployment, which amounts to 50% savings in effort for this IT workload.
- Two IT admin FTEs dedicate 50% of their time to security, patching, and help desk support, which amounts to 50% savings in effort for this IT workload.
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The amount of time the organization spent on application, software, OS deployment, and ongoing maintenance in the prior environment.
- The amount of time the organization spent on security, patching, and help desk support in the prior environment.
- The number of deployed Azure Virtual Desktop end users.
- The fully burdened hourly rate of IT employees.
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 $652,000.
Accelerated Deployment, Improved Security, And Cost Savings From Reduced Ongoing Management
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| C1 | IT admin FTEs dedicated to application, software, and OS deployment | Composite | 2 | 2 | 2 |
| C2 | Reduction in IT admin time spent on deployment with Azure Virtual Desktop | Interviews | 50% | 50% | 50% |
| C3 | Average hourly burdened salary of an IT admin FTE | Assumption | $80 | $80 | $80 |
| C4 | Subtotal: IT admin application, software, and OS deployment savings | C1*C2*C3*2,080 | $166,400 | $166,400 | $166,400 |
| C5 | IT admin FTEs dedicated to security, patching, and help desk support in prior environment | Composite | 2 | 2 | 2 |
| C6 | Reduction in IT admin time spent on security, patching, and help desk support with Azure Virtual Desktop | Interviews | 50% | 50% | 50% |
| C7 | Average hourly burdened salary of an IT admin FTE | Assumption | $60 | $60 | $60 |
| C8 | Subtotal: IT admin ongoing management savings | C5*C6*C7*2,080 | $124,800 | $124,800 | $124,800 |
| Ct | Accelerated deployment, improved security, and cost savings from reduced ongoing management | C4+C8 | $291,200 | $291,200 | $291,200 |
| Risk adjustment | ↓10% | ||||
| Ctr | Accelerated deployment, improved security, and cost savings from reduced ongoing management (risk-adjusted) | $262,080 | $262,080 | $262,080 | |
| Three-year total: $786,240 | Three-year present value: $651,754 | ||||
Reduced Costs Of Licensing And IT Infrastructure
Evidence and data. Each interviewee reported their organization reduced or avoided costs of infrastructure and licensing with Azure Virtual Desktop. They mentioned saving in the following ways:
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Flexibility with multisession. The product owner of team device services in the education sector said their organization’s Azure Virtual Desktop environment has 10 to 14 employees per server and 20 to 25 students per server. The interviewee remarked about the ability to scale and noted it is fully automated and built with infrastructure as a code: “The strength of that is reusable code for everything built with flexibility. The servers that are up and running scale up and scale down. So, the more users, the more servers. The fewer users, the fewer servers in use. So, on the weekends, it’s only one server. And during peak [times], like on a Thursday afternoon, there are around 10 to 20 servers running. But it’s completely automated.”
The IT system engineers at the cable broadband company said: “We have 110 pooled session hosts and 25 persistent ones at the moment. So, shared or multisession is the main cause of having Azure Virtual Desktop in place. We have different numbers per virtual machine, so we are keeping smaller numbers of users because that gives better flexibility and performance due to CPU scheduling. So, that scenario works out in favor of Azure Virtual Desktop, too.”
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Retiring servers and saving on licenses. The client engineering lead in financial services said that when their organization switched to Azure Virtual Desktop, it was able to retire three out of four Microsoft System Center Configuration Manager (SCCM) servers.
The head of platform infrastructure in the fast-moving consumer goods industry noted that the cost of their organization’s previous licensing and IT infrastructure was about $750,000 per year.
An IT system engineer at the cable broadband organization noted, “We don’t need any hardware service infrastructure anymore.”
The product owner of team device services in education said that with use of infrastructure as a code service to automate, their institution’s total licensing and infrastructure costs decreased by 70%: “You don’t need a lot of extra server time than you already have for the reserve instances in your servers. So, that’s a really big cost reduction.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite saves $200,000 per year in reduced costs of retiring management of its previous server.
- The composite eliminates the prior solution’s licensing costs of $420,000 per year (i.e., $10 per user per month).
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The costs per server and the organization’s ability to reduce server and maintenance expenses.
- The number of users.
- Licensing costs for the prior solution.
- The rate of deployment of Azure Virtual Desktop.
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 $1.4 million.
Reduced Costs Of Licensing And IT Infrastructure
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| D1 | Reduced costs of managing servers | Interviews | $200,000 | $200,000 | $200,000 |
| D2 | Reduced costs of licensing | Composite | $420,000 | $420,000 | $420,000 |
| Dt | Reduced costs of licensing and IT infrastructure | D1+D2 | $620,000 | $620,000 | $620,000 |
| Risk adjustment | ↓10% | ||||
| Dtr | Reduced costs of licensing and IT infrastructure (risk-adjusted) | $558,000 | $558,000 | $558,000 | |
| Three-year total: $1,674,000 | Three-year present value: $1,387,663 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify for the study:
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Efficiency of cross-team collaboration due to device flexibility and role-based access. The client engineering lead at the financial services organization provided details about how role-based access with Azure Virtual Desktop equipped teams for cross departmental collaboration: “Before, you might have one desktop for quality and another for customer service. If customer service wanted to lend some people to quality because there was a shortage or the teams wanted to cross-skill, it was very difficult. That was a delayed process because we had to spin up new servers for that particular employee’s desktop. Whereas now, with role-based access, we just put [the team] in a dynamic security group in Azure, and they get that desktop.”
The interviewee explained that in the prior environment, the request for access would have sat in a queue for three weeks, but it now takes just a few days and is a 5-minute job. -
Speed to value with increased agility. Interviewees mentioned faster delivery enabled with Azure Virtual Desktop, particularly for agile teams.
The IT system engineer at the cable broadband company said: “We are an agile organization. Our teams work agile, and then that work gets handed over to our offshore teams. So, there is cross-departmental communication that Azure Virtual Desktop has enabled. It has, of course, increased the productivity to deliver things quicker.”
The client engineering lead in financial services described cost savings associated with hiring temporary contractors with the skills the team needed more quickly: “We needed to stand up a set of engineering squads to do some development in the cloud space where we didn’t necessarily have the skills internally. We skilled up about 200 temporary contractors, and we’re probably left with about 40 now.”
The interviewee said that with Azure Virtual Desktop, the temporary workers start quickly on project delivery without a disruption in business operations or impact to employee workload. -
Improved resiliency. Interviewees said the productivity protection and flexible response that Azure Virtual Desktop enabled included auto-scaling, which contributed to organizational resiliency.
In a notable example, client engineering lead in financial services said their organization was able to maintain productivity when costs increased for a platform that teams used regularly. They explained: “Recently, our contract with [a partner tool] increased from £3 to £7 per user per month. I thought, ‘How are we going to afford this considering we purchased it with 200 users at the beginning?’ I thought the impact would be massive. But the cost was offset by its autoscaling features, which reduced the Azure compute costs. We look at that data and scale it. Through those cost savings, the vendor license cost paid for itself.”
With auto-scaling, the organization saved £23,000 per month that it would not have saved if the tool had not been managed via the Azure portal.
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Better provisioning for mergers and acquisitions. Interviewees noted that with Azure Virtual Desktop, teams can be provisioned quickly during mergers and acquisitions.
The client engineering lead in financial services said their organization also avoided the costs of additional laptops during a merger: “If we had wanted to become one big company three years ago, you’d have had to have three different laptops. With Azure Virtual Desktop, you use one laptop and login using your credentials from that domain. So, that’s improved definitely. There are easily 100 people, at least, [or] maybe 200 in roles that now sit across the whole group rather than just in one business. So, that’s 200 laptops at least we would have saved.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Azure Virtual Desktop and later realize additional uses and business opportunities, including:
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Business continuity and disaster recovery. Azure Virtual Desktop enables users to replicate virtual machines to secondary locations, so users can still access applications and connect during a regional outage.
The client engineering lead in financial services noted the importance of business continuity for their organization: “If we’re unable to take customer contact, then that is a problem because we’re regulated, and we have to be there X amount of hours for our customers. Additionally, there will fees or penalties for not keeping up with regulations.” -
Improved environmental sustainability with reduced hardware and commute costs. Companies may find that reduced hardware with Azure Virtual Desktop contributes to organizational sustainability metrics.
The client engineering lead in financial services noted: “The knock-on effect with Azure Virtual Desktop is that now we can work from home, and employees know it is possible, so we do stay at home. I save every month just not commuting to London.”
Companies with sustainability goals (e.g., reducing real estate and carbon footprints, extending end-user computing hardware lifecycles, retiring hardware) can leverage Azure Virtual Desktop to achieve those goals. - Unlocking agile. The product owner of team devices services at the educational institution remarked about how the migration to Azure Virtual Desktop demonstrated the value of agile to the team and revealed new opportunities to deliver more quickly in the future: “We started to work agile. That showed us how powerful agile was because, normally, a project that [would] take a one-and-a-half years to build and to run and maintain now can be done within six weeks.”
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 |
|---|---|---|---|---|---|---|---|
| Etr | Compute, storage, and networking costs | $0 | $792,000 | $685,300 | $664,400 | $2,141,700 | $1,785,537 |
| Ftr | Cost of migration | $228,800 | $0 | $0 | $0 | $228,800 | $228,800 |
| Gtr | Ongoing management | $0 | $54,912 | $54,912 | $54,912 | $164,736 | $136,558 |
| Total costs (risk-adjusted) | $228,800 | $846,912 | $740,212 | $719,312 | $2,535,236 | $2,150,895 | |
Compute, Storage, And Networking Costs
Evidence and data. Interviewees’ organizations were each Microsoft 365 subscribers and eligible to transition to Azure Virtual Desktop without incurring additional licensing costs. However, the organizations did incur costs from compute, storage, and networking related to their Azure Virtual Desktop investments. These costs varied depending on the environments and use cases.
Compute, storage, and networking costs are calculated at an average monthly rate and vary based on the number of end users and their total usage.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- Over the course of three years, the composite organization experiences a ramp down on compute costs as it becomes optimized and more efficient in its usage. In Year 1, its compute costs are $13.50 per user per month. By Year 3, these costs are $10 per user per month.
- Over the course of three years, the composite organization experiences a ramp up in storage costs with growth. This compensates for variability introduced by nonpersistent instances as well as additional complexity of workloads brought into the environment (e.g., computer-aided design software applications, industrial design, or even simple cases of users preferring to save sizable files such as videos or impressive presentations on-prem).
- The composite’s annual networking costs are $30,000.
- The composite’s external user costs are $60,000 from external users who qualify for the additional costs to access work and collaborate with the organization.
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The total number of users to which Azure Virtual Desktop is deployed.
- The various compute, storage, and networking requirements of the users.
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 $1.8 million.
Compute, Storage, And Networking Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | Compute costs | Interviews | $0 | $567,000 | $462,000 | $420,000 | |
| E2 | Storage costs | Interviews | $0 | $63,000 | $71,000 | $94,000 | |
| E3 | Networking costs | Interviews | $0 | $30,000 | $30,000 | $30,000 | |
| E4 | External user costs | Composite | $0 | $60,000 | $60,000 | $60,000 | |
| Et | Compute, storage, and networking costs | E1+E2+E3+E4 | $0 | $720,000 | $623,000 | $604,000 | |
| Risk adjustment | ↑10% | ||||||
| Etr | Compute, storage, and networking costs (risk-adjusted) | $0 | $792,000 | $685,300 | $664,400 | ||
| Three-year total: $2,141,700 | Three-year present value: $1,785,537 | ||||||
Cost Of Migration
Evidence and data. Interviewees described efforts and costs associated with migrating from their organizations’ prior environments to Azure Virtual Desktop. Variable use cases (e.g., whether Azure Virtual Desktop was deployed to independent contractors, remote employees, or all employees) influenced details of the migrations, including lengths and the number of FTEs involved.
- The product owner of team device services in the education sector said their institution deployed Azure Virtual Desktop to all staff and students: “[For adoption,] we had two administrators who were 100% dedicated to Azure Virtual Desktop to build it, test it, run it, and pilot it. The administrators also implemented all the applications and the network. Everything from A to Z was completely built in six weeks.”
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The client engineering lead in financial services said their organization began with offshore developers who could install their own software and applications for testing before expanding to the rest of organization. The interviewee said: “We deployed in sections. The first piece we did was a proof of concept that turned into a live solution for 200 offshore developers. We had a need for them to very quickly get access to our systems and services. They could use their own devices to log into our Azure Virtual Desktop. … Then, with budget approval, we started to release it team by team.”
After budget approval, the deployment period to all users was about eight months. -
An IT system engineer at the cable broadband company said: “To get everything up and running took about one quarter or three months to really set everything in place and make sure it was ready. We were working closely together with Microsoft. We had other projects, so it was not 100% of our time for those three months.”
The organization then deployed Azure Virtual Desktop to its partners.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization begins with offshore contractors and releases Azure Virtual Desktop team-by-team over the course of three months.
- Five IT admins who each work at a different branch or location of the organization spend 100% of their time on the migration of Azure Virtual Desktop.
- The fully burdened hourly rate of an IT admin who assists with the migration is $80.
- The composite organization’s devices are new enough to last the full investment period and its older devices are able to run Azure Virtual Desktop. The composite experiences no performance obsolescence in the three-year period because Azure Virtual Desktop can use the latest hardware.
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The extent of the Azure Virtual Desktop deployment to contractors, remote or hybrid employees, all employees, or other end-user groups.
- The amount of testing required and the pace of the Azure Virtual Desktop deployment to these workers.
- The number of FTEs needed to complete migration.
- The average burdened hourly rate of FTEs involved with migration.
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 $229,000.
Cost Of Migration
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| F1 | Migration length (months) | Interviews | 3 | |||
| F2 | FTEs required for migration | Composite | 5 | |||
| F3 | Percent time spent on migration | Interviews | 100% | |||
| F4 | Fully burdened hourly rate of an FTE involved in migration | Assumption | $80 | |||
| Ft | Cost of migration | 2,080/12*F1* F2*F3*F4 | $208,000 | $0 | $0 | $0 |
| Risk adjustment | ↑10% | |||||
| Ftr | Cost of migration (risk-adjusted) | $228,800 | $0 | $0 | $0 | |
| Three-year total: $228,800 | Three-year present value: $228,800 | |||||
Ongoing Management
Evidence and data. Interviewees described costs associated with the ongoing management of Azure Virtual Desktop, including opportunities to innovate with Azure Virtual Desktop.
- An IT system engineer at the cable broadband company said: “Azure Virtual Desktop is also evolving. So, Microsoft keeps releasing new features, and we want to be on top of it. So, we spent a considerable amount of time on service improvements. I would say I spend at least an hour every day on seeing how we can improve things. So, overall, at least 5 hours a week is spent on service improvements on Azure Virtual Desktop.” The interviewee went on to say that in the organization’s prior environment, it could not improve the service and consistently ran into difficulties.
- The product owner of team device services in education said: “Ongoing management in the last year is completely automated. The same applications are also used for the laptop. So, if they are updated, it’s automatically updated in the Azure Virtual Desktop environment.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- One FTE dedicates 30% of their time to managing Azure Virtual Desktop.
- The fully burdened hourly rate of this FTE is $80.
Risks. Results may not be representative of all experiences and the benefit will vary based on the following variables:
- The number of FTEs and percentage of time needed to manage, support, and troubleshoot Azure Virtual Desktop.
- The fully burdened hourly rate of these FTEs.
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 $137,000.
Ongoing Management
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| G1 | FTEs dedicated to managing Azure Virtual Desktop | Interviews | 1 | 1 | 1 | ||
| G2 | Percent of time FTEs dedicate to managing Azure Virtual Desktop | Interviews | 30% | 30% | 30% | ||
| G3 | Average fully burdened hourly rate of an FTE dedicated to managing Azure Virtual Desktop | Assumption | $80 | $80 | $80 | ||
| Gt | Ongoing management | G1*G2*G3* | $49,920 | $49,920 | $49,920 | ||
| Risk adjustment | ↑10% | ||||||
| Gtr | Ongoing management (risk-adjusted) | $54,912 | $54,912 | $54,912 | |||
| Three-year total: $164,736 | Three-year present value: $136,558 | ||||||
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 | ($228,800) | ($846,912) | ($740,212) | ($719,312) | ($2,535,236) | ($2,150,895) |
| Total benefits | $0 | $2,937,825 | $2,555,100 | $2,555,100 | $8,048,025 | $6,702,087 |
| Net benefits | ($228,800) | $2,090,913 | $1,814,888 | $1,835,788 | $5,512,789 | $4,551,192 |
| ROI | 212% | |||||
| Payback | <6 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 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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