The Business of ITRobert BocciaTechnology StrategistMicrosoftSession Code: ISB201

AgendaIT Environment Financials & BudgetFederated IT ModelIT Strategy CIO MindsetBalancing TensionsIT Governance, IT ScorecardModel EnterpriseWhere We AreFutures

500,000+ client devices170,000 end users98 countries441 buildings120,000 Windows 7 clients50,000 Windows Vista Clients170, 000 Office 2007 clients170,000 Exchange 14 mailboxes3000 Windows 2008 servers

46,000,000+ remote connections per month189,000+ SharePoint Sites4 data centers10,000+ production servers

E-mails per day:3,000,000 internal10,000,000 inbound9,000,000 filtered out

33,000,000 IMs per month190,000+ e-mail server accounts

Microsoft IT Environment

Microsoft IT $ Spend

Applications 60%App Development (29%)

App Support (31%)

Infrastructure 40%Network (14%)

Data Center (7%)

Employee Services (5%)

Voice (5%)

Helpdesk (5%)

Security (3%)

Functional ViewFinancial

Breakdown

Cost Element View

People 72%Data & Voice 16%Hardware 5%Facilities 5%Software 2%

Microsoft IT Strategy

Empower – Help our customers, clients and partners drive productivity with great services, guidance and solutions

Simplify – Simplify our technology environment and focus investments in core objectives

Protect – No hacks or impacting attacks and total compliance

Strategy PillarsIT Objectives

Be Microsoft’s First and Best Customer

Run World Class IT

Protect Microsoft Digital Assets

Drive productivity for our customers, clients and partners

Service Level ManagementCapacity MgmtAvailability MgmtFinancial Mgmt

Incident MgmtProblem MgmtService Desk

Service Monitoring and ControlSystem Admin

Security AdminNetwork Admin

Change MgmtConfiguration Mgmt

Release Mgmt

MOF

Project Plans Approved

Scope Complete

Release ReadinessApproved

DeploymentComplete

Vision/Scope Approved

Risk Assessment

Security & Privacy Model

Training Plan Review

User Acceptance

Approval

Security & Privacy Assessment

IT Governance

Microsoft Operations Framework

Software Development Life Cycle

MSFMOFSix Sigma

IT Scorecard

Operational Costs Consume IT Budgets

Need to do more… …with less

Efficient Operations

increase service……to customers

Source: Accenture I.T. Spending Survey

Today’s IT

Desired IT

30%New

Capability

70%Sustaining & RunningExisting

Capability

Effective Operations of Systems Management unlocks New Business Value and Services

Increasing Efficiency in IT

45%New

Capability

55%Existing

Capability

Increases value

Decreases maintenance

delivery

Model Enterprise“Model a continuously optimized Enterprise

Infrastructure utilizing Microsoft products & operations principles”

DriversShowcase (Value) + Cost + Risk

EnablersTechnology + Governance + Telecom

OutputsInfrastructure Consolidation Move to InternetReal GovernanceReduction in “Sustainer” $ IT Spend More Secure; Faster to react

SAN

SAN

N

S

EW

SAN

SAN

SANSAN

SAN

EX2K3 Topology (Goal)

N

S

EW

Microsoft IT Site Consolidation

Topology Data:• 7 regional datacenters• 6 physical sites• < 140 AD servers• 22 mailbox servers• 200mb mailbox size

Topology Data:• 9 regional datacenters• 74 physical sites• 200 AD servers• 120 mailbox servers• 100mb mailbox size

Do More With Less• 2 fewer regional datacenters (22% less)• 175 fewer servers (42% less)• 67 fewer physical sites (90% less)

189

500

1000

2903

1000

3500

4000

5000

0

1000

2000

3000

4000

5000

6000

Exchange 5.5 Exchange 2000 Exchange 2003 2004

Average Users Per Server (Mbx)

Max Users Per Server (Mbx)

110

80

50

7

212

120

80

31

0

50

100

150

200

250

Exchange 5.5 Exchange 2000 Exchange 2003 2004

Locations/Sites

Mailbox Servers

EX2K Topology

SAN

SAN

Exchange Solution: Consolidated Topology

Charlotte2 Servers1 Cluster

5,400 Users*

Tokyo3 Servers1 Cluster

8,100 Users*

Dublin5 Servers1 Cluster

21,600 Users*

Redmond8 Servers1 Cluster

56,000 Users*

* Figures represent user capacity

Singapore2 Servers1 Cluster

5,400 Users*

Data Centers Target Point

Dublin

Singapore

Redmond

Silicon Valley

Business Continuance

Business ValueTotal $23.2 million in savings to date

40% reductionServer and Data Center consolidation

$18.3 million reduction Internet Connected Offices

$4.5 million savingsEnhanced time to market

Infrastructure Server ConsolidationSavings of $4.3 million

Centralized Server and Data Management Incident Management team of 22 supports 10,000 servers worldwide

New Operations Practices and Procedures Infrastructure Server Consolidation

Savings of $4.3 million

Futures

Applications Consolidation & VirtualisationUnified Communications

PresentationVirtualization

User StateVirtualization

ApplicationVirtualization

DesktopVirtualization

Microsoft Virtualization Products From the Datacenter to the Desktop

ServerVirtualization

“Having one vendor for the hypervisor, operating system, and much of our application software was very appealing to us from a support and cost perspective.”

Bert Van Pottelberghe, Sales Director, Hostbasket Document redirection

Offline files

Hyper-V: Production ScalabilityHyper-V Powering Microsoft Internet PropertiesTechNet: 100% Hyper-V

http://technet.microsoft.com~1 million hits a DAY

MSDN: 100% Hyper-Vhttp://msdn.microsoft.com~3 million hits a DAY

Microsoft.com: ~50% Hyper-V and growinghttp://www.microsoft.com>1 billion hits a month

Microsoft Internal70% Virtualised

UNIFIED COMMUNICATIONS Business Value

SituationMeasure the ROI of the following :

IM and presence. 170,000 users enabled for IM and presence. send more than 70 million instant messages per month nearly 2 million peer-to-peer audio conversations per month.

Conferencing. 170,000 users enabled for Web and video conferencing. Conduct about 60,000 meetings per month, totaling 220,000 person-hours each month. Microsoft IT also deployed more than 2,200 Microsoft RoundTable™ video-conferencing devices to offices around the world to support video conferencing.

Voice. 40,000 users at 28 locations globally who use the voice capabilities of OCS 2007. users conduct more than 1 million calls per month through Office Communications Server.

Unified messaging. 75,000 users in 80 offices worldwide use Microsoft Exchange Server 2007 Unified Messaging. These users receive voice-mail messages in their Microsoft Office Outlook® Inbox and can access their e-mail messages and calendar information by telephone.

Solution

Microsoft IT decided to use the business value framework that Forrester Research developed

Payback. The breakeven point for an investment. This is the point in time when the benefits equal the costs.Net present value. The total value to the customer from investing in the solution, expressed in today’s dollars. Internal rate of return. The rate of return that the company expects from investing in a solution.Return on investment. The expected return calculated by dividing net benefits by costs.

Cost Framework

The cost framework includes the categories of software, hardware, deployment and training, and administration and maintenance.

Year one Year two Year threeServer hardware 7,951,850 Not applicable Not applicablePhone devices 6,630,000 Not applicable Not applicableSoftware and services 14,433,343 19,328,527 19,328,527Migration/deployment 1,097,656 Not applicable Not applicableTotal cost 30,112,850 19,328,527 19,328,527

Year one Year two Year three

Server hardware 520,800 Not applicable Not applicable

Software and services 1,850,000 1,850,000 1,850,000

Migration/deployment 260,000 Not applicable Not applicable

Total cost 2,630,800 1,850,000 1,850,000

Table 2. Deployment Costs of Exchange Server Unified Messaging

Table 1. Deployment Costs of Office Communications Server

Improved Business Outcomes

Increased End-User Productivity ($103m Saving)28 mins per day per person/Travel

Shortened Sales Cycles ($10m Saving)Faster Project Completion (NQ)Ability to Retain and Attract Employees (NQ) Faster Resolution of Customer Issues (NQ)

Reduced Costs

Reduced Travel Costs ($93m Saving)Reduced Audio Conferencing Costs ($3m Saving)Reduced IT Infrastructure and Administration Costs ($1.6m Saving)

$22 Saving in move cost Reduced Real-Estate and Facility Costs ($622 Saving)Reduced Voice-Mail Costs (NQ)Environmental Sustainability (17,000 M/Ton Saving)

Conclusion

Produce a three-year internal rate of return of 240 percentPay for itself in two monthsMetrics are based on a total investment of $76 million Annual benefits of $212 million.

In Summary: Where We AreIT Scorecard Enforced standards and policiesCentralized IT operationsRCIO’sare the “Face” of IT in regionsService CatalogService ManagersHigher builder spend, lower sustainer spendClient Satisfaction from 106 to 134

Regional IT Account Management

Ops Center (Monitoring, Tier 1 and Tier 2) MOM and MOF

Windows &Storage

Windows Server

AD Virtual Server

NetworkWindows

NetworkingISA Proxy

MessagingExchange

Office System

Client MgmtWindows Client

SMSWindows CE

Office System

Comm &Collab

SharePointOffice System

LCS

Security and Infrastructure Architecture

© 2004 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Benefits FrameworkTable 3. Summary of Benefits

Benefit area Estimated annual benefit

Metric Equation

Improved business outcomes

Increased end-user productivity (through improved communications)

$86,000,000 28 minutes per day per employee

Hours saved per day × workdays per year × cost per hour × percentage used for other activities

Increased end-user productivity (through avoided travel)

$17,000,000 45,600 trips avoided

Number of trips saved × average hours per trip × cost per hour × percentage used for other activities

Shortened sales cycles

$10,920,000 6.5% increase in proposals

Number of salespeople × revenue per proposal × increased number of proposals × profit margin

Faster project completion

Not quantified Not applicable Number of additional projects completed × revenue per project × profit margin

Ability to retain and attract employees

Not quantified Not applicable Number of employees × change in churn rate × hiring cost per employee

Faster resolution of customer issues

Not quantified Not applicable Change in number of support calls × cost per call

Reduced costs

Reduced travel costs

$93,000,000 10% reduction in trips per employee

Number of trips saved × average cost per trip

Reduced audio conferencing costs

$3,100,000 50% reduction Cost per minute × number of minutes used × percentage of reduction in minutes

Reduced IT infrastructure and administration costs

$1,650,000 $22 per office move

Reduction in cost per move × number of moves per year

Reduced real-estate and facility costs

$644,000

50% reduction in square footage per employee

Cost per square foot × square feet saved per person × number of people

Reduced voice-mail costs

Not quantified $30,000 per new site

Cost to install or maintain per site × number of sites

Environmental sustainability

Reduced carbon dioxide (CO2) emissions

17,000 metric tons 100,000,000 miles in avoided airplane travel

Decreased airplane miles × CO2 per mile + decreased car miles × CO2 per mile

For More Information

Additional content on Microsoft IT deployments and best practices can be found on http://www.microsoft.com

Microsoft TechNet http://www.microsoft.com/technet/itshowcase

Microsoft Case Study Resourceshttp://www.microsoft.com/resources/casestudies

Increase IT Efficiency: Maintain Fewer Servers http://www.microsoft.com/serverconsolidation

E-mail IT Showcaseshowcase@microsoft.com