Sample TCO Study for Application Virtualization
I have done several Application Virtualization TCO studies for my customers and the results are in between 5% to 8% overall TCO reduction depending on the customer's IT maturity and market. Most of the TCO savings comes from the application testing, packaging and PC supporting tasks but also indirectly from the business operations.
Here is a sample Application Virtualization TCO study for a Finance customer from the MEA region (Emerging market - basic IT maturity)
Customer Profile: Emerging subsidiary Finance organization with 6.500 PCs and 150 applications and Software Assurance in place.
TCO Comparison:
|
TCO Comparison Cumulative 3 Year |
Solution A: Current Environment (As Is) Before App-V |
Solution B: Proposed Solution (To Be) with App-V |
Difference (A - B) |
Difference (A - B)% |
|
IT Costs | ||||
|
Help Desk and Deskside Support |
$2,205,938 |
$2,015,869 |
$190,069 |
8.6% |
|
PC Recovery |
$2,238,524 |
$1,732,815 |
$505,709 |
22.6% |
|
Application Error and Exception Management |
$102,451 |
$88,135 |
$14,316 |
14.0% |
|
Advanced Group Policy Management |
$94,119 |
$94,119 |
$0 |
0.0% |
|
PC Software Asset Administration |
$25,483 |
$25,483 |
$0 |
0.0% |
|
PC Software Licensing |
$7,800,000 |
$7,800,000 |
$0 |
0.0% |
|
Compliance and Security Management |
$146,310 |
$142,402 |
$3,908 |
2.7% |
|
Application Deployment Productivity |
$66,370 |
$13,314 |
$53,056 |
79.9% |
|
Application Update Productivity |
$54,388 |
$10,854 |
$43,534 |
80.0% |
|
Application Termination Productivity |
$21,560 |
$4,343 |
$17,217 |
79.9% |
|
Application Management Error Resolutions |
$3,400 |
$0 |
$3,400 |
100.0% |
|
MDOP Investment |
$0 |
$266,991 |
($266,991) |
0.0% |
|
MDOP Implementation Labor |
$0 |
$52,687 |
($52,687) |
0.0% |
|
Total IT Costs |
$12,758,543 |
$12,247,012 |
$511,531 |
4.0% |
|
Business Operating Costs | ||||
|
Software License Violations |
$731,250 |
$731,250 |
$0 |
0.0% |
|
Help Desk Problem Resolution Downtime |
$1,076,684 |
$855,874 |
$220,810 |
20.5% |
|
End User PC Recovery |
$788,105 |
$606,614 |
$181,491 |
23.0% |
|
End User Operating System and Application Errors |
$271,171 |
$231,851 |
$39,320 |
14.5% |
|
Downtime Group Policy Impact |
$342,811 |
$342,811 |
$0 |
0.0% |
|
Security or Compliance Violations |
$195,000 |
$193,050 |
$1,950 |
1.0% |
|
Application Management Related Downtime |
$1,273 |
$27 |
$1,246 |
97.9% |
|
End User Change Costs |
$0 |
$11,185 |
($11,185) |
0.0% |
|
Total Business Operating Costs |
$3,406,294 |
$2,972,662 |
$433,632 |
12.7% |
|
Total |
$16,164,837 |
$15,219,674 |
$945,163 |
5.8% |
Benefits:
In the table you can see application virtualization has benefits in varous IT operations but the biggest impact is that it
reduces the application lifecycle management costs by about 80%, which is a key cost-saving factor. Included is also the reduced help desk and PC recovery savings since they include the most IT labour. End-user downtime is an indirect benefit but has a significant impact on the overall TCO since it touches business productivity.