New Technology: The Projected Total Economic Impact™ Of Microsoft Mesh
Cost Savings And Business Benefits Enabled By Mesh
A Forrester New Technology Projected Total Economic Impact™ Study Commissioned By Microsoft, December 2024
As organizations look to provide transformational virtual employee collaboration and participation experience, they seek tools that enable real-life immersive environments in which productivity, cost savings, and knowledge retention deliver tangible impact. Mixed-reality collaboration platforms like Microsoft Mesh provide organizations with improved learning experiences, allowing them to significantly reduce travel costs related to onboarding and training, improve user turnover, gain efficiencies across teams, and decrease the need for physical training centers.
Microsoft Mesh is a collaboration tool included in the Teams Premium offering that provides an enhanced mixed-reality experience for participants. With the creation of immersive 3D environments and avatars, users experience a more hands-on, inclusive approach to meetings and events to connect participants in different physical locations and allow them to participate together. Enabled with a secure learning environment using a headset or PC, Mesh users are presented with material that can improve the onboarding and technical training processes while organizations can improve efficiency and retention rates. Mesh users can move around virtual worlds in a natural fashion that is more like real life than a videoconference.
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 Mesh.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Mesh on their organizations.
Projected return on investment (ROI)
23% - 104%
Projected net present value (NPV)
$509K - $2.2M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed 14 representatives of eight organizations with experience using Microsoft Mesh and surveyed 275 respondents from organizations considering the use of Mesh. For the purposes of this study, Forrester aggregated the experiences of the interviewees and survey respondents and combined the results into a single composite organization that is a technology-forward organization with 5,000 employees, 500 Mesh users, and revenue of $1 billion per year.
Interviewees said that prior to using Mesh, their organizations had decentralized, inconsistent onboarding programs for new recruits and sent technical employees to hazardous locations for training. Additionally, previous communication platforms (e.g., videoconferencing solutions) lacked necessary security features and did not encourage full-team engagement and participation, leading to unnecessary follow-up meetings.
After the investment in Mesh, the organizations reduced travel costs by being able to standardize the onboarding experience remotely while still imparting organizational culture to offer training in safe, virtual learning environments and promote community-building, brainstorming, and knowledge retention. These improvements led to increases in employee satisfaction, reduced turnover, and gains in user productivity.
“Which areas of outcomes have you seen/do you expect to benefit most from Microsoft Mesh?”
Increased employee satisfaction Increased employee effectiveness Improved security/governance Cost avoidance or savings Increased revenue impact Others
Base: 275 decision-makers from organizations considering the use of Microsoft Mesh
Source: A commissioned study conducted by Forrester Consulting on behalf of Microsoft, September 2024
Key Findings
Quantified projected benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Travel cost savings related to onboarding and training. Microsoft Mesh allows the composite organization to conduct employee onboarding and training sessions in an immersive, mixed-reality environment that enables employees to fully engage with their colleagues, tour virtual office spaces, and complete required technical training without the need to travel to a physical location. This significantly reduces travel costs associated with in-person onboarding and training and is worth $1.3 million to the composite organization over three years.
- Increase in employee productivity due to increased engagement and participation. Microsoft Mesh enables the composite organization to create immersive environments that engage users more effectively than traditional collaboration tools or in-person meetings. The use of mixed reality to simulate real-life interactions ensures employees are more participatory during training sessions, team meetings, and collaborative projects, thereby reducing the need for follow-up calls and meetings. Additionally, increased engagement leads to better understanding, retention of information, and higher productivity. The increase in employee productivity totals nearly $1 million over three years for the composite organization.
- Reduction in physical space for training centers. Because the composite organization gains the ability to create immersive training environments that simulate its physical training environments, it not only avoids travel costs and hazard-related expenses, but it also reduces its need for physical training space. This results in real estate cost savings of approximately $600,000 over three years.
- Improvement in turnover rate for Mesh users. With the ability to create immersive and interactive experiences, Microsoft Mesh keeps the composite organization’s users more engaged and invested in their work. Engaged employees are generally happier, more satisfied, and less likely to leave their jobs, which allows the organization to avoid thousands of dollars in recruitment costs for new employees. This benefit is worth $684,000 to the composite organization over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Increased security, governance, and compliance. Unlike the composite organization’s legacy collaboration tools, Mesh offers embedded security features. So, the composite is confident that its Mesh session data meets internal security and governance requirements as well as regulatory mandates (e.g., GDPR, HIPAA).
- Improved learning experience and knowledge retention. With the creation of realistic, 3D, or simulated mixed reality environments, participants from different physical locations engage with presented material in different virtual formats and interact directly with colleagues in a hands-on manner. This leads to an enhanced learning experience, which is directly correlated to knowledge retention.
- Improved carbon footprint. By facilitating immersive virtual collaboration and interaction, Microsoft Mesh helps the composite organization with sustainability and reduces its carbon footprint through direct effects on travel, infrastructure, and resource utilization.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Total annual license fees for Microsoft Teams Premium. The composite organization incurs a monthly fee of $4 per user for Teams Premium, which is required to access Mesh. For 500 Mesh users at the composite, this cost totals $72,000 over three years.
- Total adoption, hardware, and training costs. The composite organization dedicates four FTEs for six months to adopt and implement Mesh. It also requests 10% of its users to use VR headsets and expects each Mesh user to undergo 2 hours of initial training and then 4 hours of ongoing training per year. These costs total $943,000 over three years.
- Cost of ongoing management and creating experiences. The composite’s ongoing management costs include the internal resources required to manage the implementation process and adoption of Microsoft Mesh. The organization also dedicates FTEs from the immersive experience team to create new environments as leadership demands. These costs total nearly $1.2 million over three years for the composite organization.
Forrester modeled a range of projected low-, medium-, and high-impact outcomes based on evaluated risk. This financial analysis projects that the composite organization accrues the following three-year net present value (NPV) for each scenario by enabling Microsoft Mesh:
- Projected high impact of a $2.2 million NPV and projected ROI of 104%.
- Projected medium impact of a $1.4 million NPV and projected ROI of 65%.
- Projected low impact of a $509,000 NPV and projected ROI of 23%.
Key Statistics
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Projected return on investment (PROI):
23% to 104%
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Projected benefits PV:
$2.7M to $4.4M
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Projected net present value (PNPV):
$509K to $2.2M
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Total costs:
$2.2M
Three-Year Projected Financial Analysis For The Composite Organization
New Tech TEI Framework And Methodology
From the information provided in the interviews and survey, Forrester constructed a New Technology: Projected Total Economic Impact™ (New Tech TEI) framework for those organizations considering an investment in Mesh.
The objective of the framework is to identify the potential cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the projected impact that Mesh can have on an organization.
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Due Diligence
Interviewed Microsoft stakeholders and Forrester analysts to gather data relative to Mesh.
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Early-Implementation Interviews And Survey
Interviewed 14 representatives at eight organizations using Mesh in a pilot or beta stage and surveyed 275 respondents at organizations considering the use of Mesh to obtain data about projected 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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Projected Financial Model Framework
Constructed a projected financial model representative of the interviews and survey using the New Tech TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees and survey respondents.
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Case Study
Employed four fundamental elements of New Tech TEI in modeling the investment’s potential 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 Mesh.
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.
Forrester fielded the double-blind survey using a third-party survey partner.
Consulting Team:
Rachel Ballard
Drivers leading to the Mesh investment
Key Challenges
The interviewees mentioned that with their organizations’ previous environments, they were using disparate and fragmented immersive technologies that did not meet their security needs. This limited the ability to achieve their goals of reducing travel costs, centralizing their onboarding and training processes, downsizing real estate investments, realizing productivity gains, and improving overall learning experiences.
The interviewees noted how their organizations struggled with common challenges, including:
- Decentralized onboarding experiences. Interviewees’ organizations conducted their onboarding processes across different locations, and this required additional, costly resources. Lacking standardization, the organizations were also unable to properly share their common core values with new recruits, resulting in fragmented knowledge of the organizations and a lack of cohesive culture and community.
- Training sessions in hazardous locations. The interviewees said it was concerning to send people from different locations to one site that involved hazardous training. It was expensive not only from a travel perspective, but also from insurance and infrastructure perspectives, as well.
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Inadequate internal engagement and participation. In their previous environments using disparate collaboration solutions, interviewees’ organizations lacked adequate learning environments and struggled with participant attendance and engagement. This resulted in a lack of knowledge retention, follow-up communication time, and lost productivity.
Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Enhance collaboration, brainstorming, and community.
- Reduce travel costs associated with onboarding and training.
- Standardize the onboarding experience.
- Reduce physical training space.
- Lead to productivity gains for users.
- Improve employee retention.
Composite Organization
Based on the interviews and survey, 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 14 interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The US-based, $1 billion organization has 5,000 employees, and 500 are Mesh users. Additionally, the composite organization invests in a small number of headsets to reap additional value of Mesh. Replacing its legacy collaboration solutions, the technology-focused company seeks to standardize and centralize its onboarding and training processes while increasing employee engagement and interaction. Achieving this would reduce travel costs, improve efficiencies, communicate consistent core values, and provide necessary learning in safe and secure environments.
Quantified benefit data as applied to the composite
Total Projected Benefits
| Projected Benefits | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|
| Total projected benefits (low) | $1,075,000 | $1,075,000 | $1,075,000 | $3,225,000 | $2,673,366 |
| Total projected benefits (mid) | $1,439,500 | $1,439,500 | $1,439,500 | $4,318,500 | $3,579,823 |
| Total projected benefits (high) | $1,774,500 | $1,774,500 | $1,774,500 | $5,323,500 | $4,412,918 |
Travel Cost Savings Related To Onboarding And Training
Evidence and data. Interviewees told Forrester they expect the adoption of Mesh to significantly reduce travel costs associated with their organizations’ onboarding and training. They noted that in their previous environments, this was impossible due to the lack of standardization in processes, and they noted their digital workplace/collaboration tools were limited, less engaging, and lacked the security and levels of adoption required to achieve the desired travel cost savings.
- Of the 275 survey respondents, 49 said they expect their organization’s travel costs to decrease by nearly 28%.2
- Thirty-nine respondents said they expect to reduce onboarding expenses for new employees by an average of 18.1%, while 63 said they expect to reduce training costs by an average of 26.9%.3
- A global onboarding lead at a consulting organization commented: “Our onboarding for new employees was 100% in-person [before the COVID-19 pandemic]. With Mesh, we are now at 100% virtual [onboarding], and with the creation of our HQ environment, we can share the culture of our organization across all new recruits regardless of location.”
- A global lead for metaverse labs at a professional services firm added: “Our previous tools were okay, but Mesh tells the full story of our organization in a more comprehensive way to our new employees. It enhances the onboarding experience and augments the ability for these new employees to prepare for their new roles.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite previously spent $2 million per year for travel associated with onboarding and training.
- The composite reduces travel costs between 21% and 30% with the adoption of Mesh.
Results. This yields a three-year projected PV ranging from $1 million (low) to $1.5 million (high).
Travel Cost Savings Related To Onboarding And Training Module: Range Of Three-Year Cumulative Impact, PV
High projection Mid projection Low projection
Travel Cost Savings Related To Onboarding And Training
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |||
|---|---|---|---|---|---|---|---|---|
| A1 | Travel costs related to onboarding and training before the adoption of Mesh | Composite | $2,000,000 | $2,000,000 | $2,000,000 | |||
| A2 | Percent reduction in annual travel costs related to onboarding and training |
Survey | 21% 26% 30% |
21% 26% 30% |
21% 26% 30% |
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| AtLow AtMid AtHigh |
Travel cost savings related to onboarding and training | Interviews | $420,000 $520,000 $600,000 |
$420,000 $520,000 $600,000 |
$420,000 $520,000 $600,000 |
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Three-year projected total: $1,260,000 to $1,800,000 |
Three-year projected present value: $1,044,478 to $1,492,111 |
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Increase In Employee Productivity Due To Increased Engagement And Participation
Evidence and data. Interviewees noted that adopting Mesh afforded employees the opportunity to engage more meaningfully and interact with colleagues in a group or individually within the same immersive environment. They explained that moving around a virtual space allows employees to break into sub-groups, write on digital whiteboards, conduct sticky-note exercises, or visualize products. Interviewees said that by combining the best of in-person and digital formats, Mesh enhances both engagement and collaboration. They believe this level of communication and participation will lead to faster learning and improved decision-making, resulting in increased employee productivity.
- Of 275 survey respondents, 106 stated they expect Mesh to improve employee productivity by an average of 20.9%.4
- More than 100 said they expect Mesh to improve their organization’s overall FTE productivity.5
- A VP of an energy company relayed: “With Mesh, we are making faster and better decisions, and individual connections are improved. The connection of people is critical to our business.”
- A global head of immersive and emerging experiences at an AI and cloud business services organization said, “We have seen employee attention span and productivity significantly increase with the adoption of Mesh.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite has 500 Mesh users.
- Each user avoids between 2 and 3 hours of follow-up meeting time each month.
- Forrester applied a 50% productivity recapture rate because not all saved time is used productively.
Results. This yields a three-year projected PV ranging from $791,000 (low) to $1.2 million (high).
Increase In Employee Productivity Due To Increased Engagement And Participation Module: Range Of Three-Year Cumulative Impact, PV
High projection Mid projection Low projection
Employee Productivity Due To Increased Engagement And Participation
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |||
|---|---|---|---|---|---|---|---|---|
| B1 | Total Mesh users | Composite | 500 | 500 | 500 | |||
| B2 | Monthly follow-up meeting time saved per user after adopting Mesh (hours) |
Survey | 2.0 2.5 3.0 |
2.0 2.5 3.0 |
2.0 2.5 3.0 |
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| B3 | Average fully burdened hourly rate for a user | TEI standard | $53 | $53 | $53 | |||
| B4 | Productivity recapture rate | TEI standard | 50% | 50% | 50% | |||
| BtLow BtMid BtHigh |
Increase in employee productivity due to increased engagement and participation | B1*B2*B3*B4*12 months | $318,000 $397,500 $477,000 |
$318,000 $397,500 $477,000 |
$318,000 $397,500 $477,000 |
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Three-year projected total: $954,000 to $1,431,000 |
Three-year projected present value: $790,819 to $1,186,228 |
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Reduction In Physical Space For Training Centers
Evidence and data. Interviewees noted that as more technical training becomes viable and reliable in virtual, immersive Mesh environments, their organizations will be able to reduce their annual physical training facility costs.
- Several survey respondents indicated their organization will be able to reduce its physical space with Mesh by an average of approximately 15%.
- A global lead for the cognitive human enterprise at a professional services firm commented: “For one large client, we built a metaverse space instead of an actual physical space. For a fraction of the cost, you can build the same environment. While a physical site might be tens of millions of dollars, we estimated that the virtual space was 0.5% of that.”
- A global head of design at an energy company shared, “We are looking at saving between $7 million and $10 million every five years in physical training site reduction.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization incurs $950,000 of physical training center costs per year.
- With Mesh, the composite organization reduces this cost by 21% to 30%.
Results. This yields a three-year projected PV ranging from $496,000 (low) to $709,000 (high).
Reduction In Physical Space For Training Centers Module: Range Of Three-Year Cumulative Impact, PV
High projection Mid projection Low projection
Reduction In Physical Space For Training Centers
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |||
|---|---|---|---|---|---|---|---|---|
| C1 | Physical space (real estate) costs for training centers | Composite | $950,000 | $950,000 | $950,000 | |||
| C2 | Percent decrease in physical training center costs |
Survey | 21% 26% 30% |
21% 26% 30% |
21% 26% 30% |
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| CtLow CtMid CtHigh |
Reduction in physical space for training centers | C1*C2 | $199,500 $247,000 $285,000 |
$199,500 $247,000 $285,000 |
$199,500 $247,000 $285,000 |
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Three-year projected total: $598,500 to $855,000 |
Three-year projected present value: $496,127 to $708,753 |
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Improvement In Turnover Rate For Mesh Users
Evidence and data. Interviewees mentioned that by enhancing engagement and interaction through virtual, simulated collaborative experiences, they expect Mesh users to be happier and better integrated within their organizations than non-Mesh adopters. This could result in lower turnover among users.
- Of 164 survey respondents, 61% stated their organization has or will increase employee retention with Mesh.6
- A VP of an energy company stated: “By using Mesh, we expect to ultimately reduce our turnover by 10%. This technology allows us to recruit, train, and retain talent.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization has 500 Mesh users.
- The improvement in turnover among Mesh users is between 0.5% and 1.5%.
- The fully burdened annual salary for a Mesh user is $110,000.
Results. This yields a three-year projected PV ranging from $342,000 (low) to $1 million (high).
Improvement In Turnover Rate For Mesh Users Module: Range Of Three-Year Cumulative Impact, PV
High projection Mid projection Low projection
Improvement In Turnover Rate For Mesh Users
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |||
|---|---|---|---|---|---|---|---|---|
| D1 | Total Mesh users | Composite | 500 | 500 | 500 | |||
| D2 | Reduction in turnover rate for users after adopting Mesh |
Survey | 0.5% 1.0% 1.5% |
0.5% 1.0% 1.5% |
0.5% 1.0% 1.5% |
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| D3 | Avoided cost to recruit, onboard, and train a new employee (not including travel) | Composite | $55,000 | $55,000 | $55,000 | |||
| DtLow DtMid DtHigh |
Improvement in turnover rate for Mesh users | D1*D2*D3 | $137,500 $275,000 $412,500 |
$137,500 $275,000 $412,500 |
$137,500 $275,000 $412,500 |
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Three-year projected total: $412,500 to $1,237,500 |
Three-year projected present value: $341,942 to $1,025,826 |
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Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Increased security, governance, and compliance. Interviewees said that because Microsoft Mesh is part of the Microsoft ecosystem, it emphasizes security and governance to ensure collaborative experiences within Mesh are safe, in line with organizational policies, and compliant with external regulations (e.g., GDPR, HIPAA). A CEO of a consulting firm noted: “Microsoft is already embedded into 99% of our business, so onboarding Mesh is easy. [Microsoft has] the security infrastructure already in place. With a log-in system, the content is hosted on the right server in the right place.”
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Improved learning experience and knowledge retention. Interviewees said Mesh provides immersive learning environments in which participants can engage with 3D objects and simulations and that this multisensory experience has the potential to enhance memory retention beyond what is typically achieved with conventional 2D educational resources. By immersing participants in settings or scenarios that closely mirror real-world training environments, Mesh facilitates practical learning. The global onboarding lead at a consulting firm said that information becomes more memorable when it is acquired in the same context it will be applied, and users develop muscle memory when they simulate actions.
The CEO at a consulting organization said, “You remember 70% of something that you do vs. 20% to 30% of something you watch.” And a global onboarding lead at a consulting firm added: “Immersive learning environments are 33% better with Mesh. It promotes engagement and memorable learning, and we’re more likely to retain that knowledge.” - Reduced carbon footprint. Interviewees said by limiting corporate travel and promoting a general shift to a more flexible work schedule, their organizations are better able to meet environmental sustainability goals and improve their carbon footprints. A VP at an energy company stated, “With Mesh, we expect a 98% improvement to our carbon footprint.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Mesh and later realize additional uses and business opportunities, including:
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Scalability. Interviewees said that because Mesh is a scalable platform, it allows users to create environments to meet a variety of use cases, whether it’s a small, collaborative team meeting or a large, companywide experience. Additionally, as adoption increases and the overall number of users grows, Mesh adjusts to maintain performance, ensuring a uniform user experience across teams.
An extended reality platform lead at a pharmaceutical company shared, “The great thing about Mesh is that it can scale up and down as needed.” And a lead for global onboarding at a consulting firm said: “When we were testing Mesh, we got overwhelmingly positive feedback from small test sessions, which allowed us to shift our onboarding from in-person to virtual. It’s a great example of local innovation and bringing it to scale.” - Potential revenue increase due to improved customer experience. Interviewees mentioned that when external functionality is released within Mesh, they expect an improved customer experience that will result in higher customer retention and acquisition rates that directly correlate to an increase in revenue. A CEO at a consulting firm noted: “We talked to our clients about this, and they believe that an improved customer experience will definitely impact their sales pipelines. For example, you can invite customers and prospects to go in and explore new products and lines. Opportunities are endless if you can bring customers into virtual spaces that are literally showrooms.”
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 | Total annual license fees for Teams premium | $12,000 | $24,000 | $24,000 | $24,000 | $84,000 | $71,684 |
| Ftr | Total adoption, hardware, and training costs | $620,130 | $129,780 | $129,780 | $129,780 | $1,009,470 | $942,874 |
| Gtr | Cost of ongoing management and creating experiences | $590,625 | $328,125 | $196,875 | $131,250 | $1,246,875 | $1,150,237 |
| Total costs (risk adjusted) |
$1,222,755 | $481,905 | $350,655 | $285,030 | $2,340,345 | $2,164,795 | |
Total Annual License Fees For Teams Premium
Evidence and data. Interviewees said their organizations pay Microsoft a fee of $4 per user per month for Mesh of $4. This represents the difference in price between Teams and Teams Premium.
Pricing may vary. Contact Microsoft for additional details.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization has 500 users.
- The cost for Teams Premium is $4 per user per month.
- The initial period represents six months of use.
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact of this benefit will vary depending on:
- Number of Mesh users within an organization.
- Pricing changes or discounts.
Results. As pricing is standard, Forrester did not adjust this cost upward and calculated a three-year, risk-adjusted total PV (discounted at 10%) of $72,000.
Total Annual License Fees For Teams Premium
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Total Mesh users | Composite | 500 | 500 | 500 | 500 |
| E2 | Monthly Teams Premium license fee per user | Microsoft | $2 | $4 | $4 | $4 |
| Et | Total annual license fees for Teams Premium | E1*E2*12 months | $12,000 | $24,000 | $24,000 | $24,000 |
| Risk adjustment | ↑0% | |||||
| Etr | Total annual license fees for Teams Premium (risk-adjusted) | $12,000 | $24,000 | $24,000 | $24,000 | |
| Three-year total: $84,000 | Three-year present value: $71,684 | |||||
Total Adoption, Hardware, And Training Costs
Evidence and data. Interviewees said the initial costs of Mesh include the resources required for implementation, the investment in headsets (including mobile management subscriptions), and initial training. Ongoing costs include additional headsets purchased due to breakage and attrition and ongoing annual training required per user.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- Four FTEs are dedicated to the adoption and implementation for six months.
- The annual fully burdened cost for an FTE dedicated to adoption and implementation is $250,000.
- The composite initially purchases 50 headsets, and it purchases 10 additional headsets annually in years 1 to 3.
- Each headset costs $500.
- Annual subscription fees for mobile management are $252 per headset.
- The composite has 500 users who require 2 hours of initial training and 4 hours of ongoing training per year in years 1 to 3.
- The fully burdened hourly cost for an FTE is $53.
Results. To allow for underestimation, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV of $943,000.
Total Adoption, Hardware, And Training Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| F1 | Time required for adoption and implementation (months) | Composite | 6 | |||
| F2 | Immersive experience team FTEs dedicated to adoption and implementation | Composite | 4 | |||
| F3 | Annual fully burdened salary for an immersive experience team member | TEI standard | $250,000 | |||
| F4 | Subtotal: Initial adoption and implementation costs | (F1/12)*F2* F3 |
$500,000 | |||
| F5 | Headsets purchased initially and maintained in years 1 to 3 | Composite | 50 | 40 | 40 | 40 |
| F6 | Headsets purchased post-implementation | Composite | 10 | 10 | 10 | |
| F7 | Cost per headset | Composite | $500 | $500 | $500 | $500 |
| F8 | Per-user license costs for mobile management | Composite | $252 | $252 | $252 | $252 |
| F9 | Subtotal: Cost of headsets | Initial: (F5*F7)+(F5*F8) Ongoing: (F6*F7)+((F5+F6)*F8) |
$37,600 | $17,600 | $17,600 | $17,600 |
| F10 | FTEs who require training | Composite | 500 | 500 | 500 | 500 |
| F11 | Time required for training (hours) | Composite | 2 | 4 | 4 | 4 |
| F12 | Fully burdened hourly cost for an FTE | TEI standard | $53 | $53 | $53 | $53 |
| F13 | Subtotal: Training costs | F10*F11*F12 | $53,000 | $106,000 | $106,000 | $106,000 |
| Ft | Total adoption, hardware, and training costs | F4+F9+F13 | $590,600 | $123,600 | $123,600 | $123,600 |
| Risk adjustment | ↑5% | |||||
| Ftr | Total adoption, hardware, and training costs (risk-adjusted) | $620,130 | $129,780 | $129,780 | $129,780 | |
| Three-year total: $1,009,470 | Three-year present value: $942,874 | |||||
Cost Of Ongoing Management And Creating Experiences
Evidence and data. Interviewees said this cost includes the FTEs required to manage the deployment, adoption, training, and creation of immersive experiences across their organizations.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- For ongoing management, the composite organization requires 0.25 FTE.
- The composite initially dedicates two FTEs to creating new environments. By Year 3, this number decreases to 0.25 FTE.
- The fully burdened annual cost of an immersive experience team member is $250,000.
Results. To allow for underestimation, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV of $1.2 million.
Cost Of Ongoing Management And Creating Experiences
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| G1 | IT leads required for ongoing management | Composite | 0.25 | 0.25 | 0.25 | 0.25 |
| G2 | Immersive experience FTEs dedicated to creating experiences | Composite | 2.00 | 1.00 | 0.50 | 0.25 |
| G3 | Annual fully burdened cost for an immersive experience team member | TEI standard | $250,000 | $250,000 | $250,000 | $250,000 |
| Gt | Cost of ongoing management and creating experiences | (G1+G2)*G3 | $562,500 | $312,500 | $187,500 | $125,000 |
| Risk adjustment | ↑5% | |||||
| Gtr | Cost of ongoing management and creating experiences (risk-adjusted) | $590,625 | $328,125 | $196,875 | $131,250 | |
| Three-year total: $1,246,875 | Three-year present value: $1,150,237 | |||||
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 High impact NPV Mid impact NPV Low impact NPV PROI of-
The financial results calculated in the Benefits and Costs sections can be used to determine the PROI and projected NPV for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted PROI and projected NPV values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Cash Flow Analysis (Risk-Adjusted)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($1,222,755) | ($481,905) | ($350,655) | ($285,030) | ($2,340,345) | ($2,164,795) |
| Total benefits (low) | $0 | $1,075,000 | $1,075,000 | $1,075,000 | $3,225,000 | $2,673,366 |
| Total benefits (mid) | $0 | $1,439,500 | $1,439,500 | $1,439,500 | $4,318,500 | $3,579,823 |
| Total benefits (high) | $0 | $1,774,500 | $1,774,500 | $1,774,500 | $5,323,500 | $4,412,918 |
| Net benefits (low) | ($1,222,755) | $593,095 | $724,345 | $789,970 | $884,655 | $508,571 |
| Net benefits (mid) | ($1,222,755) | $957,595 | $1,088,845 | $1,154,470 | $1,978,155 | $1,415,028 |
| Net benefits (high) | ($1,222,755) | $1,292,595 | $1,423,845 | $1,489,470 | $2,983,155 | $2,248,123 |
| PROI (low) | 23% | |||||
| PROI (mid) | 65% | |||||
| PROI (high) | 104% | |||||
Appendix A: New Technology: Projected Total Economic Impact
New Technology: Projected Total Economic Impact (New Tech TEI) 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 New Tech TEI methodology helps companies demonstrate and justify the projected tangible value of IT initiatives to both senior management and other key business stakeholders.
Total Economic Impact Approach
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Projected Benefits represent the projected value to be delivered to the business by the product. The New Tech TEI methodology places equal weight on the measure of projected benefits and the measure of projected costs, allowing for a full examination of the effect of the technology on the entire organization.
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Projected Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The projected cost category within New Tech TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
-
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: INTERVIEW AND SURVEY DEMOGRAPHICS
Interviews
| Role | Industry | Region | Employees |
|---|---|---|---|
| Global onboarding lead Innovation principal director |
Consulting | US | 740,000 |
| VP and global head of design | Energy | UK | 88,000 |
| CEO | Consulting | UK | 60 |
| Global lead for metaverse labs Global lead for cognitive human enterprise |
Professional services | UK | 400,000 |
| Global head of immersive and emerging experiences | AI and cloud business services | US | 60,000 |
| Immersive experiences team | Technology manufacturing | Japan | 105,000 |
| Extended reality platform lead | Pharmaceutical | Japan | `49,000 |
| Project leader, IT innovation management | Technology manufacturing | Germany | 169,000 |
“In which country are you located?”
“Which of the following best describes the industry to which your company belongs?”
“Using your best estimate, what is your organization’s annual revenue (USD)?”
Base: 275 decision-makers from organizations considering the use of Microsoft Mesh
Note: Percentages may not total 100 because of rounding.
Source: A commissioned study conducted by Forrester Consulting on behalf of Microsoft, September 2024
Appendix C: Endnotes
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