DisclaimerDisclaimerThe financial metrics presented in this Excel calculator are for example purposes only. These metrics represent estimates used by Microsoft Academy in developing a cash flow and return on investment analysis for purposes of this white paper. The cost categories for calculating total cost of ownership (TCO) metrics conform to commonly used categories for TCO analysis. The direct and indirect cost categories have been modified to meet the specific needs of developing a cash flow model for assessing the financial value of a video podcasting portal such as Microsoft Academy. Users may need to modify the cost categories to meet the specific and unique circumstances of their own organization. Results from using this cash flow and TCO calculator will vary based on the organizations specific and unique circumstance. This calculator is provided as-is, and Microsoft does not make any warranties, express or implied, with respect to the calculator. This calculator is provided for informational purposes only, and nothing contained in this calculator or in the attached white paper is intended to constitute professional, legal or financial advice. Use of the calculator is at the users own risk, and the user is solely responsible for its use of or reliance on any results, estimated, projected or actual, obtained using the calculator. 2010 Microsoft Corporation. All right reserved.

TCO and ROI Direct CostsYear 1PilotYear 2Year 3TCO Life Cycle% of Total Cost

HardwareServer$18,000
mkada: 2 webfront, 1 SQL $6k each$18,000
mkada: adding 2 more webfront and 1 more SQL (total 4 webfront, 2 SQL); $6k each0.0$36,000Peripherals$5,0000.00.0$5,000Network components$4,0000.00.0$4,000Total Hardware Cost$27,000$18,0000.0$45,0001%SoftwareLicense$42,100
mkada: Pricing under Select Contract MVL-A for Win Server2008 , SQL Datacenter, MOSS. ForeFront

Win Server 2008, Data Center Edition (2 servers): 2 x $2896.67(Server Datacenter 2008 R2 License, Processor Select Level A)

SQL Server 2008 Enterprise (1 servers): 1 x $28.802.91(Enterprise License 1 Processor E-certicate)

MS Expression Encoder 3 (1 Licenses): 1 x $600

SharePoint 2007 Enterprise (1 server standalone farm): 1x $5.395.10(MS SharePoint Server 2007 License Single Language E-certificate) $42,100
mkada: adding more to a new total of:

Win Server 2008, Data Center Edition (4 servers): 4 x $2896.67(Server Datacenter 2008 R2 License, Processor Select Level A)

SQL Server 2008 Enterprise (2 servers): 2 x $28.802.91(Enterprise License 1 Processor E-certicate)

MS Expression Encoder 3 (2 Licenses): 2 x $600

SharePoint 2007 Enterprise (2 server standalone farm): 2x $5.395.10(MS SharePoint Server 2007 License Single Language E-certificate) 0.0$84,200SW Maintenance$10,525$21,050
mkada: Gives access to quick fix engineers, service packs, updates, etc.$21,050$52,625SW Development$50,000$50,000$50,000$150,000SW Management $100,000
mkada: 0.5 IT Architect$100,000
mkada: 0.5 IT Architect$100,000
mkada: 0.5 IT Architect $300,000Total Software Cost$202,625$213,150$171,050$586,8259%ManagementArchitect/Admin$200,000
mkada: 1 FTE Architect$300,000
mkada: 1.5 FTE Architect / Admin$400,000
mkada: 2 FTE Architect/Admin$900,000Systems Hosting$100,000$200,000$250,000$550,000Reporting$50,000$50,000$50,000$150,000Total Management Cost$350,000$550,000$650,000$1,550,00025%SupportSupport Staff$50,000
mkada: 0.25 IT Engineer$100,000
mkada: 0.5 IT Engineer$100,000
mkada: 0.5 IT Engineer$250,000Total Support Cost$50,000$100,000$100,000$250,0004%ImplementationDevelopment/Customization/Integration$50,0000.00.0$50,000Total Implementation Cost$50,0000.00.0$50,0001%

Total Direct Costs$679,625$881,150$921,050$2,481,82540%

Managed Service Costs - Program Management(Indirect Costs)Year 1PilotYear 2Year 3TCO Life Cycle% of Total Cost

Academy ProgramProgram Management$200,000
mkada: 1 FTE$400,000
mkada: 2 FTE$600,000
mkada: 2 FTE, 1 Vendor$1,200,000Account Management$200,000
mkada: 1 Vendor$400,000
mkada: 2 Vendors$600,000
mkada: 3 Vendors$1,200,000Business Operations$150,000$250,000$400,000$800,000Marketing / Promotions$120,000
mkada: 0.5 Vendor resource and reward program and Podcasting in a Kit Program$180,000
mkada: 0.75 Vendor and rewards program and Podcast in a Kit program$250,000
mkada: 1 Vendor and rewards program$550,000Total Program Cost$670,000$1,230,000$1,850,000$3,750,00060%

Total Indirect Costs$670,000$1,230,000$1,850,000$3,750,00060%

Total Costs$1,349,625$2,111,150$2,771,050$6,231,825100%

TCO/Year$2,077,275

Cost Avoidance (ROI)
mkada: The cost avoidance is very conservative because it considers only the webcasting part and leaves out the video part. Reason for leaving out the video part is that the ROI is already positive and lots of time would be needed to investigate how many trainings have been substituted by videos.Year 1PilotYear 2Year 3TCO Life Cycle

Substitution of Class Room Trainings# of Webcasts$150$300$350$800Avg # of Participants / Webcast 150$22,500$45,000$52,500$120,000Cost Savings $303 / Participant$(6,817,500)$(13,635,000)$(15,907,500)$(36,360,000)Total Cost Avoidance Webcasting$(6,817,500)$(13,635,000)$(15,907,500)$(36,360,000)Substitution of In-person Conferences - Example Virtual Enterprise Marketing Summit# of Virtual Conferences$1$4$10$15Avg # of Participants / Conference 150$150$600$1,500$2,250Cost Savings $2375 / Participant$(356,250)$(1,425,000)$(3,562,500)$(5,343,750)Total Cost Avoidance Virtual Conferencing$(356,099)$(1,424,396)$(3,560,990)$(5,341,485)

Total Cost Avoidance$(7,173,599)$(15,059,396)$(19,468,490)$(41,701,485)

ROI - $ (negative amount means SAVINGS)$(5,823,974)$(12,948,246)$(16,697,440)$(35,469,660)ROI - %432%613%603%569%

ROI/Year$(13,900,495)

Substitution of Large Scale Events - Based on FY10 Data (Potential Cost Avoidance)
mkada: MGX is the annual Microsoft meeting for pre-dominantly sales and marketing employeesNr of Virtual MS Employees0.00.0$5,109$(17,605,614)Cost Savings $3446 / Participant0.00.0$(17,605,614)$(17,600,505)Total Cost Avoidance Virtual Large Event0.00.0$(17,600,505)$(17,600,505)Total Potential Cost Avoidance (incl. partly substitution of large scale events)$(7,173,599)$(15,059,396)$(37,068,995)$(59,301,990)

Total Potential ROI - $ (negative amount means SAVINGS)$(5,823,974)$(12,948,246)$(34,297,945)$(53,070,165)ROI (Potential) - %432%613%1238%852%

ROI/Year (Potential)$(17,690,055)Potential Cost Avoidance / Participant$(3,446)Potential Avoidance Factor80

Cost Avoidance CalculatorCost Class Room TrainingVirtual Briefing (Live Meeting)

Content Development
mkada: 2 day class room training = 10 hrs of content$10,000Webcast Cost (Academy Live)$1,500SME Time $125/hr 8 hrs$1,000SME Time $125/hr 8 hrs$1,000Course Material Development$15,000Total Cost$2,500Trainer Delivery Cost (2 days)$4,000Total Cost / hr$2,500Total Cost$30,000Total Cost / hr per Participant (150)
mkada: 50 Live Particpants, 100 Participants via download$17Total Cost / hr$3,000T&E 25 Participants$50,000Total Cost incl. Participant T&E$80,000Cost Avoidance / Participant$(303)Total Cost per Participant / hour (25 Participants)$320Avoidance Factor19

Cost In-Person Enterprise Marketing SummitCost Virtual Enterprise Marketing Summit

Conference Cost (Venue, Handouts, Website)
mkada: Conference costs can vary widely and based on this (real) example, the range can be between $150-250k$150,000Videos and Webcasting Costs
mkada: Cost for producing webcasts and videos. $60,000T&E 400 Participants each $2.5k (3 days)$1,000,000Program Management, Website, etc.$140,000Total Cost$1,150,000Total Cost$200,000Total Cost per Participant $2,875Total Cost per Participant (400 participants)$500

Cost Avoidance / Participant$(2,375)Avoidance Factor6

Cost In-Person Large EventVirtual Large Event CostVirtual MGX costVirtual MGX costT&E per Participant$2,000Cost per virtual Session delivery$760Conference Cost per Participant$1,490nr of virtual sessions$264Total Large Event Cost per Participant$3,490Subtotal$200,640Project Mgmt$10,000Vendor Travel Cost$5,000Landing page on Academy Portal$8,000Total$223,640Total avg. Cost per session$847Nr of unique virtual employees5109Cost per virtual employee$44

Potential Cost Avoidance / Participant$(3,446)Potential Avoidance Factor80