The Total Economic Impact™ Of Red Hat Technical Account Managers

A Red Hat Technical Account Manager (TAM) provides a single point of contact to help organizations plan and deploy Red Hat software more successfully. Technical Account Managers specialize in a particular Red Hat software product and work side by side with customer teams to proactively guide their technology strategy, enhance security, and mobilize other Red Hat resources on their behalf.

Red Hat commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying TAMs.¹ The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of TAMs on their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four decision-makers with experience using the TAM service. For the purposes of this study, Forrester aggregated the experiences of the interviewees and combined the results into a single composite organization, which is a global $5 billion organization that deploys RHEL, OpenShift, and Ansible in its technology environment.

Interviewees said that prior to using TAMs, their organizations spent a significant amount of time researching best practices on their own and relying on ad hoc support to develop products and resolve issues related to their Red Hat technology. These approaches proved ineffective and created concern around the potential negative impact that system downtime or a security breach would have on their environment.

After the investment in TAMs, the interviewees said their organizations gained consistent product-level expertise that upskilled their teams, increased overall productivity, and removed development roadblocks. Interviewees explained that Red Hat software supported business-critical, revenue-generating use cases for their organizations, so using TAMs enabled their organizations to enhance the time to market for projects that supported key business objectives and to reduce the impact of both system outages and security breach costs.

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

• Increased IT/developer productivity, amounting to $745,000 in labor savings. With the TAM, the composite organization’s developers and technical engineers save time on both ongoing project development and planning work as well as resolving issues. The TAM’s product knowledge and direct relationships with Red Hat engineers reduce the time spent waiting for support and attempting to resolve issues internally. Over three years, this is worth $745,000 in labor savings to the composite.

• Reduced system outage costs by $1.8 million. The TAM serves as a critical resource during system outages related to Red Hat products: They reduce the impact of major unplanned outages and help the composite avoid additional minor incidents throughout the year. Proactive discussions, such as those around product migration timelines, prove critical for ensuring stability within the composite’s overall environment. Over three years, this is worth $1.8 million in cost savings to the composite.

• Enhanced time to market, accelerating profit realization by $3.0 million. As the composite’s developers gain productivity in their day-to-day project work, they are able to release projects to market faster. A portion of these projects impact customer-facing applications, accelerating the rate at which the composite captures revenue. Over three years, this is worth $3.0 million in accelerated profit to the composite.

• Strengthened security, reducing the risk of incurring breach costs by $196,000. The TAM regularly talks to the composite about product security measures, such as patching and certificate lifecycles; they also advise on existing vulnerabilities. They play an important role in reducing the risk of incurring breach costs related to both internal and external threats. Over three years, this is worth $196,000 in reduced risk exposure.

Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:

• Upskilling developers, system administrators, and infrastructure and platform teams. The TAM provides hands-on workshops to guide and advise team members on their unique architectural environments. These interactive sessions allow a wide range of roles to learn and test new skills critical to their career development.

• Gaining advanced insight into Red Hat’s product roadmap. Regular meetings with the TAM allow the composite’s developers to learn of upcoming product features and gain an early understanding of how the functionality may influence ongoing project work and add additional benefit to the organization.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

• Red Hat fees. The composite pays Red Hat for the services of three TAMs, one for each of the products for which it has a subscription. Over three years, this costs the composite $1.0 million in fees.

• Ongoing management. Five team members meet with each of the TAMs weekly to discuss ongoing project work and future product strategy. Over three years, this costs the composite $128,000 in labor.

The financial analysis that is based on the interviews found that a composite organization experiences benefits of $5.7 million over three years versus costs of $1.1 million, adding up to a net present value (NPV) of $4.5 million and an ROI of 386%.