Office 365 TEI Study from Forrester
Summary of “The Total Economic ImpactTM
Of Microsoft Office 365 – Enterprise Customers”
2014 report by Forrester Consulting, commissioned by Microsoft

Methodology for the study
Forrester Consulting was commissioned by Microsoft to examine the
potential return on investment that enterprises could realize with Office 365.
Identified 63
organizations
with Office 365
experience to either
interview or survey*
1
Interviewed
marketing, sales
and consulting
personnel at
Microsoft
2
Created
composite
organization
based on interview
and survey findings
3
Constructed
financial model
populated with cost
and benefit data
4
Adjusted the
financial model
based on risks
and issues
5
Applied the
risk-adjusted
financial model
to the composite
organization
6
*Surveyed companies identified by Forrester, and interviewed companies provided by Microsoft.

Description of composite organization
6Kemployees
in North America comprising 2,500
knowledge who were moved to
Office 365 and 3,500 operational
workers
300road warriors
who travel four days per week
for 45 weeks out of the year
8offices
between the U.S. and Canada,
plus operations in Europe and Asia
Original component Office 365 upgrade
Office Professional Plus 2010 Office 365 Professional Plus
Exchange 2010 Exchange Online
SharePoint 2010 SharePoint Online
Lync Online
Yammer
OneDrive
A light manufacturing, distribution and sales
company. The study looks at the first phase
migration of North American knowledge
workers.
Acme was interested in Office 365 in order
to reduce the total cost of ownership,
convert costs from CapEx to OpEx, and
improve user productivity and collaboration.

Five benefit areas
Control & ComplianceMobility Business Intelligence Enterprise SocialTechnology

$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
Initial Year 1 Year 2 Year 3
Summary of TEI
($113,361)
$222,799
$1,719,923
$3,819,353
Total Costs Total Benefits Running Total
$5.6Min risk-adjusted net present
value over three years
163%
three-year, risk-adjusted ROI
$1,348
three-year, risk-adjusted NPV/user
7months
for Office 365 payback
468%
Internal Rate of Return
Microsoft Office 365

“We were looking at our five-year IT plan, and the
trends were clear. We knew we had to move to a
subscription model in order to keep up-to-date on the
latest technologies in an effective and efficient way.”
“Moving to Office 365 is part of an overall program to
cut support costs in half. To do that we needed to
move to more of a consumer style support model.”
“We were reaching a tipping point with over half of our
system users being mobile users. All roads lead to mobile
first and we needed to support it through the cloud.”
In the customers’ own words

Technology Cost
Savings
$2.43Min benefits resulting from lower
infrastructure costs, implementation
efforts, licenses, and IT support
$272K
Implementation cost savings
$672K
Server, hardware and hosting cost
savings
$1.43M
IT support savings
$60K
Microsoft server license
savings

“Our employees can now get their data and
apps from anywhere without having to
mess with VPNs. Office 365 is really intuitive
and simple to use.”
“We no longer need to open remote offices
everywhere since people can work from home.
We expect to start savings $2 to $3 million
per year in office costs next year.”
Mobility
$2.81Min savings from a more
productive mobile workforce

6.8%
Reduction in
compliance costs
10.7%
Reduction in the time spent
on eDiscovery efforts
73%
Reduction in number of
data breaches
Control & compliance
$90Kin labor hour savings from
eliminating additional projects for
implementing redundant solutions

8.5%
Decrease in time
to make decisions
Business intelligence
$3.2Min production gains from
better and faster access
to the right information
30
minutes saved
per day

“Additionally, the social aspect of Office 365 has
resulted in direct cost savings by being able to
eliminate other social and collaboration services”
“Integration with Yammer has improved collaboration.
We are seeing knowledge sharing increase.”
Enterprise social
$247Kin benefits from better
communications and eliminating
redundant social tools

“Additionally, the social aspect of Office 365 has
resulted in direct cost savings by being able to
eliminate other social and collaboration services”
“Integration with Yammer has improved collaboration.
We are seeing knowledge sharing increase.”
The cost of implementation

Summary of the value of Office 365
Forrester estimates 7 month payback for Office 365
Control & Compliance Business Intelligence Enterprise SocialMobilityTechnology Cost
Savings
Improve agility, reduce
costs, and provide the
tools to work efficiently
Enable employees to
work from almost
anywhere on any device
Help protect customer
data and ensure
compliance
Provide greater insights
into business
performance
Empower the sales force
with collaborative tools
that increase customer
revenue
163%
three-year, risk-adjusted ROI
$5.6 million
risk-adjusted NPV
468%
Internal Rate of Return

Office 365 TEI Study from Forrester
Summary of “The Total Economic ImpactTM
Of Microsoft Office 365 – Enterprise Customers”
2014 report by Forrester Consulting, commissioned by Microsoft