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TEI of GApps: The Total Economic Impact of Google Apps

posted Jan 7, 2013, 6:58 PM by Faustino Rodriguez   [ updated Jan 8, 2013, 6:32 AM ]
Google has worked with Forrester Consulting to refresh their Total Economic Impact (TEI) study for Google Apps. The objective was to quantify the collaboration benefits in addition to the IT/maintenance cost savings for Google Apps deployments. 

You can access the full report here to discover all the findings, methodology, and profile of businesses surveyed. 

Even though the study refers to enterprises adopting Google Apps after having managed a traditional on-premise messaging and collaboration environment, it also applies to Small Medium Business taking the advantage of this Enterprise-class solution.

The survey and interviews about Google Apps and the subsequent financial analysis identified several key takeaways for organizations migrating to a cloud-based messaging and collaboration environment. Key findings are summarized and commented below:
  1. Apps risk-adjusted ROI: 329%.
  2. NPV: more than 20x the investment in change management, testing, piloting, and initial support.
  3. Payback (break-even) period: 1.4 months
  4. End user productivity gains were 3x larger than IT cost savings.
  5. Internal Collaboration Efficiency had the most significant economic impact out of all benefits.
  6. The switch to Google Apps was usually driven by replacing or augmenting an existing email solution.
  7. End users familiar with cloud-based personal email transitioned more smoothly to using Google Apps at work.
  8. In addition to fixed monthly billing, the majority of IT users noted the key benefit of reduction in maintenance costs for a prior messaging platform.
Cost saving is evident and usually a driver in adoption, however more important in my view are the benefits: see below the end user benefits highlighted from this study:

End user benefits. Migrating an organization’s messaging and collaboration environment to Google Apps
included the following specific end user benefits:
  • Messaging benefits: These included productivity gains around email search and spam filtering.
  • Collaboration benefits: These included improved efficiency of sharing and editing documents across teams and within teams, faster ability to incorporate feedback, more efficient face-to-face and virtual meetings, and pushing more timely and relevant information to distributed teams.
  • Individual productivity benefits: These included a new category focused on synergies and time saved by working with different apps within Google, as opposed to shifting between Google Apps and other software. Mobility benefits like convenience also fall into this group, highlighting the value of bring-your-own-device (BYOD) strategies.


Notes and Acronyms:
TEI: Total Economic Impact, ROI: Return Of Investment, NPV: Net Present Value
* Similar Study from 2010 can be found here

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