A Forrester Total Economic Impact™

Study Commissioned By Microsoft

January 2018

The Total Economic

Impact™ Of Microsoft
365 Education
Improving Student Learning While
Reducing Cost And Effort
 Table Of Contents
Executive Summary 1
Key Findings 1
TEI Framework And Methodology 4
The Microsoft 365 Education Customer Journey 5
Interviewed Organizations 5
Key Challenges 5
Solution Requirements 6
Key Results 6
Composite Organization 7
Financial Analysis 8
Improved Student Outcomes 8
Improved Teacher Experiences 10
Improved IT And Cost Savings 12
Device Savings And Student Use Benefit 14
Flexibility 17
Deployment 18
Microsoft 365 Education Licenses 20
Devices 21
Ongoing Management 22
Financial Summary 24
Microsoft 365 Education: Overview 25
Appendix A: Total Economic Impact 26

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Liz Witherspoon
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 Executive Summary
Benefits And Costs Microsoft provides an education platform that helps school districts provide
better instruction to students while reducing IT and teacher effort.
Microsoft commissioned Forrester Consulting to conduct a Total Economic
Impact™ (TEI) study and examine the potential return on investment (ROI)
school districts may realize by deploying Microsoft 365 Education
(Microsoft 365). The purpose of this study is to provide readers with a
Additional instructional time per framework to evaluate the potential financial and non-financial impacts of
teacher per year: Microsoft 365 on their organizations.
216 hours To better understand the benefits, costs, and risks associated with this
investment, Forrester interviewed five school districts using Microsoft 365.
The benefits they received from moving to the Microsoft 365 cloud-based
solution include lower IT costs and effort, improved student outcomes,
transformative learning experiences, and more satisfied teachers. While
the primary objective was to improve student learning and performance,
cost savings was also a major consideration because of budget limitations.
Prior to using Microsoft 365, the schools typically had on-premises
solutions that were more limited in features and were not made available
Student user benefit per student to all faculty, staff and students. Also, devices were not given to students
per year. on anything approaching a 1 to 1 basis. Moving to Microsoft 365 and
$51 putting more devices into students’ hands helped teachers improve
student engagement and teach the 21st century skills that students need
upon graduation.

Key Findings
Benefits. The following risk-adjusted quantified present value (PV)
benefits are representative of those experienced by the schools
interviewed and applied to a composite organization of 60,000 students
and 5,500 teachers and projected forward for three years:
Reduced device setup time: › Improved student learning and outcomes. The primary reason the
84% interviewed school districts adopted Microsoft 365 was to provide better
educational experiences for their students. All interviewees stated that
the Microsoft 365 solution allows for students to be more engaged in
their studies. Additionally, the anytime/anywhere nature of the cloud-
based solution, means that students can access their coursework from
home or mobile phone as well as at school. Giving students a personal
device, whether it remains on campus or can be taken home, further
engages them in learning and developing the 21st century skills that will
be required upon graduation — either within higher education or the
workplace. This benefit was not quantified in the study.

1 | The Total Economic Impact™ Of Microsoft 365 Education

 › Increased teacher satisfaction and more teaching time. The
Microsoft 365 solution greatly benefits teachers by allowing them to work
with the latest technologies which increases their skills development as
ROI
well as their work satisfaction. Many school districts are also
95% implementing the Microsoft 365 solution for teachers’ professional
development training. It also automates and streamlines many
administrative tasks which means more time can be spent teaching. For
the 5,500 teacher composite organization, this equates to 1.18 million
Payback hours per year. Since associated learning outcomes cannot be
14 months quantified, Forrester included the implied cost savings in the financial
analysis as a proxy. Time saved setting up rosters and classes each
semester (5 minutes per student) and grading tests were included (6
hours per week). After reducing the benefit by 75% because not all
productivity gains translated into financial results, the total savings over
three years was $17.61 million.
› Reduced and more predictable IT costs along with better
performance availability and security. Moving to the Microsoft 365
cloud solution greatly reduces IT costs and effort by shifting
infrastructure out of the school district’s data center. Because the
Microsoft 365 solution is free for students (paid licenses are only
required for faculty and staff), overall Microsoft 365 license costs are
usually lower. Also, the spikes in spend from upgrading hardware and
software are eliminated and replaced with a predictable and stable
“Nothing replaces good software-as-a-service (SaaS) model. The total IT savings over three
teaching, and Microsoft 365 years was $5.38 million. Additionally, moving to the Microsoft 365 cloud-
gives teachers the tools they based solution means better overall solution performance and uptime.
need to be better at their jobs.” Schools benefit from always being up-to-date on software versions and
Executive director, IMS not having to roll out big upgrades every few years. IT security was also
generally viewed as better than what the school district could do given
budget limitation.
› Increased device adoption at a lower cost including student use
benefit. School districts are trying to get as close as possible to a 1 to 1
student/faculty to device ratio. The new devices that run Microsoft 365
are very affordable and may cost less than the other solutions being
considered. Also, with Intune for Education and other automation tools
that are built into Microsoft 365, the time to set up these devices is much
faster. End-user security is also much better than their previous, on-
premises solution, reducing security remediation efforts. Additionally,
students get free use of the Office 365 for Education A1 solution along
with a student use benefit including InTune for Education, Minecraft:
Education Edition, and some security solutions which saves school
districts money; together this is almost comparable to the Microsoft 365
Education A3 solution. For the financial analysis, Forrester included a
one-time $33 per device bundled solutions savings, 2.5 hours per device
setup time savings, 720 fewer security remediation events each year,
and a $4.25 per student per month student use benefit. The savings
over three-years was $13.52 million.
Costs. The interviewed organizations experienced the following risk-
adjusted costs:

2 | The Total Economic Impact™ Of Microsoft 365 Education

 › Initial deployment of Microsoft 365. Setting up Microsoft 365, typically
email, Teams, and SharePoint, is fast and simple process. The ongoing
development of Teams sites for classes and SharePoint sites for other
shared functions becomes part of business as usual for faculty and staff.
For the financial analysis, Forrester included internal resources and
professional services that were specific to the deployment, which
consisted of four FTEs for nine months as well as some professional
services. Many other roles, such as learning development and training,
were involved as part of their ongoing responsibilities and not included
as incremental costs. The total costs were $2.86 million
› Microsoft 365 Education licenses. Faculty and staff are using the
Microsoft 365 A3 licenses. Students are using free Office 365 A1
licenses and receive other student use benefits such as Office 365
ProPlus and InTune for Education (because faculty and staff have paid
Microsoft 365 A3 licenses). For the financial analysis, 7,000 faculty and
staff operate on A3 licenses at a cost of $69 per year. The total cost over
three years was $1.20 million.
› Student and faculty devices. School districts’ ultimate goal is a 1 to 1
student/faculty to device ratio. In all cases, teachers each had their own
device. For students, some school districts were already at 1 to 1 across
all schools and others were still in a phased rollout that was closer to 1.5
to 1. The approach to deploying devices varied greatly depending on
current device penetration rates for faculty and students and budget
availability. This ranged from an initial big bang approach to following
existing device refresh schedules. For the financial analysis, a big bang
approach was included for simplicity. All costs were included in the initial
period even though financing options are often used to spread the costs
out over multiple years. At an average price of $200 per device, the total
cost for 65,500 devices was $13.76 million.
Forrester’s interviews with five school districts using Microsoft 365 and
subsequent financial analysis found that an organization based on these
interviewed organizations experienced present value benefits of $36.5
million over three years versus costs of $18.7 million, adding up to a net
present value (NPV) of $17.8 million and an ROI of 95%.

3 | The Total Economic Impact™ Of Microsoft 365 Education

 TEI Framework And Methodology
From the information provided in the interviews, Forrester has constructed
a Total Economic Impact™ (TEI) framework for those organizations
considering implementing Microsoft 365 Education.
The objective of the framework is to identify the cost, benefit, flexibility, and
risk factors that affect the investment decision. Forrester took a multistep
approach to evaluate the impact that Microsoft 365 Education can have on
an organization:

The TEI methodology DUE DILIGENCE

Interviewed Microsoft stakeholders and Forrester analysts to gather data
helps organizations relative to Microsoft 365 education.
demonstrate, justify, CUSTOMER INTERVIEWS
and realize the Interviewed ten individuals across five school districts using Microsoft 365
Education to obtain data with respect to costs, benefits, and risks.
tangible value of IT
COMPOSITE ORGANIZATION
initiatives to both Designed a composite organization based on characteristics of the
senior management interviewed organizations.

and other key FINANCIAL MODEL FRAMEWORK

Constructed a financial model representative of the interviews using the
business TEI methodology and risk-adjusted the financial model based on issues
stakeholders. and concerns of the interviewed organizations.

CASE STUDY
Employed four fundamental elements of TEI in modeling Microsoft 365
Education’s impact: benefits, costs, flexibility, and risks. Given the
increasing sophistication that enterprises have regarding ROI analyses
related to IT investments, Forrester’s TEI methodology serves to provide a
complete picture of the total economic impact of purchase decisions.
Please see Appendix A for additional information on the TEI methodology.

DISCLOSURES
Readers should be aware of the following:

This study is commissioned by Microsoft and delivered by Forrester Consulting.

It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other

organizations will receive. Forrester strongly advises that readers use their own
estimates within the framework provided in the report to determine the
appropriateness of an investment in Microsoft 365 Education.

Microsoft reviewed and provided feedback to Forrester, but Forrester maintains

editorial control over the study and its findings and does not accept changes to
the study that contradict Forrester’s findings or obscure the meaning of the
study.

Microsoft provided the customer names for the interviews but did not participate
in the interviews.

4 | The Total Economic Impact™ Of Microsoft 365 Education

The Microsoft 365 Education Customer Journey
BEFORE AND AFTER THE MICROSOFT 365 EDUCATION INVESTMENT

Interviewed Organizations
For this study, Forrester conducted 10 interviews across five school
districts using Microsoft 365 Education. Interviewed organizations
include the following:

DISTRICT TYPE INTERVIEWEES STUDENTS EDUCATORS

Public, K-12 • Executive director, Information Management Services (IMS) 52,000 4,500

• Head of digital transformation

Private, K-12 80,000 8,000
• Digital transformation team member
• Manager of institutional technology
Public, K-12 75,000 6,000
• Technology network coordinator
Alternative
• CIO 3,800 330
education campus
• Director of technology
• Sixth grade math teacher
Public, Pre-K–12 • Director of accountability, assessment, and professional 6,100 700
development
• District technology integration specialist

Key Challenges
The interviewed school districts had many challenges that they wanted to
address with Microsoft 365 Education.
› Existing solutions could not deliver the desired learning
experiences. The on-premises and other cloud-based solutions that
were replaced with Microsoft 365 Education did not fully meet the
schools’ needs in terms of providing collaborative learning experiences “Our past solution was not
and teaching 21st century skills, such as computer programming and collaborative. It was extremely
applied creativity. Additionally, providing each student with their own difficult to work on documents
device could not be achieved because of cost and manpower together in real time. It was
limitations. “We needed to figure out how to service our students very important for us to move
better. With Windows computers, we could do everything we needed. in this direction.”
As we uncovered more problems, we solved them with Microsoft 365.”
Executive director, IMS
› There was insufficient security and digital rights management.
Moving to a digitally-driven teaching model requires improved IT
security. Further, digital rights management needs to be solid to avoid
copyright and contract violations. “I inherited a dumpster fire of
infrastructure. There was not enough security and there was no digital
rights management. Digital rights management with file level
permissions needed to be added quickly.”

5 | The Total Economic Impact™ Of Microsoft 365 Education

› Technology costs were outpacing available budget. Technology
costs were increasing significantly because of the move to digital
teaching models and providing modern IT experiences to students and
faculty. Budgets were not increasing fast enough to meet these new
demands. “As the second largest operating expenditure for schools,
(largest after salaries), it is imperative that current and future “Students have a modern
technology needs are managed from a holistic perspective, to ensure computing environment at
that intended outcomes are achieved, budgets respected, and home, and they want to see
timelines met.” the same thing at school.”
Director of technology
Solution Requirements
The interviewed organizations searched for a solution that would provide
many capabilities and address their challenges. Some of what Forrester
heard included:
› “We needed workflow management for all our people processes and to
support coaching visits. We were looking for everything in one platform
along with learning experiences for students.”
“One of the things we continue
› “Better student collaboration was a main objective.” to emphasize is that compared
› “We wanted students and staff to be able to install Microsoft 365 at to other productivity platforms,
home.” many of the applications in
› “Students and staff needed the same access no matter where they Microsoft 365 were developed
were located.” by educational experts.”
› “Data privacy and security were absolutely essential.” Head of digital transformation
› “There needed to be a great user experience.”
› “We had student data in many different databases and apps that didn’t
integrate. With Microsoft 365 we can bring all the data together to
create better learning journeys.”
› “Staying on the latest version of technology is a best practice we
wanted to adopt.”
› “The solution had to help us meet the new state standards which
included more collaboration, critical thinking, and creativity.” “We have seen a 10%
improvement across the board
— test scores, competencies,
Key Results and concurrent enrollment
The interviews revealed that key results from the Microsoft 365 participation. And, it is only our
investment include: second quarter using Microsoft
365.”
› Student learning has improved. Improved student outcomes were
the most important result for school districts. All the interviewed CIO
districts stated that adopting Microsoft 365 Education helps them
deliver better teaching. “We have the highest test scores we’ve ever
had. Our graduation rate is the highest it has ever been.”
› A modern IT environment reduced operating costs and effort.
Moving a lot of the infrastructure and systems to Microsoft’s data
centers freed up IT staff to work on other projects. System
performance and uptime were also improved while ongoing costs were
lowered. “We are saving around $250,000 per year in staff and
hosting. We had to evolve peoples’ roles to tasks, like cloud identity,
from things we just don’t need any more such as backup and disaster
recovery. We avoided growing the IT team.”

6 | The Total Economic Impact™ Of Microsoft 365 Education

› Schools have more flexibility in determining how to best serve
their students. Different schools in the same district have their own
unique needs. And these can vary based on the type of school, “If you are a district that wants
whether a special needs program exists, the area’s socioeconomic to go all in with improved
status, etc. The solutions in Microsoft 365 can be tailored to meet the processes and student
local needs of those students and teachers from both a system and learning, this is the way to go.”
device perspective. “Schools have the autonomy to determine how Executive director, IMS
they use the various solutions and what their device policy and ratio
will be based on type of school and community.”
› Teachers save time and have tools to more effectively teach.
Microsoft 365 includes many educator-designed best practices to
teach more effectively and efficiently. Teachers were using these to
increase student engagement and streamline their own efforts.
“Microsoft 365 simplified the teaching environment. Teachers go to
Teams to find their classes, and everything is associated in one place.
Everyday productivity increases.”

Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a
composite organization, and an associated ROI analysis that illustrates
the areas financially affected. The composite organization is
representative of the five school districts that Forrester interviewed and is
used to present the aggregate financial analysis in the next section. The
composite organization that Forrester synthesized from the customer
interviews has the following characteristics:
› Description of composite. The composite organization is a K through
12 public school district. There are 60,000 students and 5,500
teachers, all of which use Microsoft 365. There are an additional 1,500
staff and administrators using Microsoft 365. The district operates
many different types of schools including traditional elementary,
middle, and high schools, as well as schools for special needs
Key assumptions
students and vocational training. The district is launching an online 60,000 students
only school built on Microsoft 365.
5,500 teachers
› Deployment characteristics. The composite school district rollout
was a big bang approach. (Interviewed school districts varied in how
1,500 additional users
they rolled out Microsoft 365, and Forrester used this approach for
model simplicity and clarity.) Microsoft 365 Education A3, which
includes InTune for Education, was deployed for teachers and staff,
and Exchange, Teams, and SharePoint were made available to
everyone very soon after. New devices were provided to all teachers
and students. There was ongoing work building more SharePoint and
Teams sites, which was part of business as usual operations. Students
had free use of Office 365 Education A1 plus student use benefits such
as InTune for Education, Minecraft: Education Edition, and a range of
other solutions. More details are in the Costs section of the study.

7 | The Total Economic Impact™ Of Microsoft 365 Education

Financial Analysis
BENEFIT AND COST DATA AS APPLIED TO THE COMPOSITE

Total Benefits
PRESENT
REF. BENEFIT YEAR 1 YEAR 2 YEAR 3 TOTAL VALUE
Improved student outcomes (non-quantified)

Atr Teacher time savings $2,439,424 $9,757,696 $9,757,696 $21,954,816 $17,612,971

Btr Improved IT and cost savings $3,863,700 $1,168,650 $1,202,400 $6,234,750 $5,381,662

Device savings and student use

Ctr $10,014,338 $2,800,332 $2,800,332 $15,615,002 $13,522,199
benefit

Total benefits (risk-adjusted) $16,317,462 $13,726,678 $13,760,428 $43,804,569 $36,516,832

Improved Student Outcomes

This first benefit is one that was not quantified but was considered the The table above shows the total of all
most important by all the interviewees. The school districts adopted benefits across the areas listed below,
as well as present values (PVs)
Microsoft 365 to provide better learning experiences to students and to discounted at 10%. Over three years,
help teach them 21st century skills. Student performance and experience the composite organization expects
improved in many ways, and some of what Forrester heard is included risk-adjusted total benefits to be a PV
below. of more than $36.5 million.

Personalized Learning
› “Personalized learning has improved a lot. We started the first virtual
school last year. The students go completely at their own pace and
have face-to-face sessions one time per week. The rest is all virtual.
There is a pacing guide tailored specifically for each student. They can “This year, I am using Microsoft
complete an entire course early and progress on if they choose to. This Teams with each of my
is done with Teams and Office 365.” classes. I post assignments
› “Students with different learning needs have a couple of different within Teams such as
approaches to learning. We have a centralized team that helps the PowerPoint, forms (for
schools figure out how to use the software in different ways. For assessments), Word
example, we are using OneNote learning tools for students with documents, web links for
reading problems.” games or activities, video
links, etc. This has allowed my
Anytime/Anywhere Learning students to be self-motivated
› “Learning experiences have extended outside of the classroom when accessing and
because everything is in the cloud. Learning happens beyond the completing work on the
school borders more often than in the past.” computer. It also gives me the
› “We are using Skype for Business to teach languages in remote areas freedom to work with other
for the second language requirement.” students while some are on
Teams.”
› “Students are using Microsoft 365 from their phones off campus. It
Sixth grade math teacher
makes homework more efficient.”
Student Engagement
› “We’ve seen an increase in student engagement. We send a survey
each year, and 67% of students said this technology helps them be
better engaged.”

8 | The Total Economic Impact™ Of Microsoft 365 Education

› “My students love creating presentations and sharing their work with
others to collaborate on projects.”
› “This helps a lot with student engagement. You put a device in their
hands every day and teach them about Bing searches and internet
usage.”
› “Teaching them to use internet searches for math has made them a lot
more creative. They want to create things like Sway projects. It’s been
a big positive for us.”
› “Kids are more comfortable so are they taking their studies more
seriously. The same instructions are being read, but because they are
on a computer the students are reading them.”
› “There is more accountability. You can’t say ‘I forgot my flash drive’
because everything is saved automatically to the cloud.”
21st Century Skills
› “Before Microsoft 365, our instructional handbooks did not include 21 st
century skills. We use coaching visits to train teachers on 21st century
skills. Last year alone we did over 32,000 coaching visits in the
classroom. We can do more of them because of Microsoft 365.”
› “There are many opportunities for 21st century learning in Minecraft.
Some classes are using Minecraft to teach coding and as part of the
STEM pathway.”
› “Nationally and locally, schools are interested in going beyond the core
curriculum to include creativity. There are now more ways for students
to demonstrate learning.”
› “This gives students more options to produce and demonstrate what
they learned in the classroom. It makes them more digitally agile.”
› “Our county has the highest number of engineers per capita in the
country. The students are now using in school what they are expected
to use in the workplace.”
› “We have seen an increase in the number of students pursuing STEM
careers. I think it is tied to having better access to these technologies.”
› “The state test is on the computer. So, having kids use a computer
every day helps them when they take the test.”
› “Microsoft is the right platform to make sure students are using the
tools they will need in the real world.” “Because we get telemetry, we
can measure how teachers
Planning And Decision Making and students are using the
› “We make better, well informed decisions because we measure system and their outcomes.
everything and visualize it in Power BI… We are now looking at multi- We provide feedback and best
dimensional relationships for behavior management to reduce practices on what’s working
absences.” well.”
› “We make decisions differently because we relate data to one Head of digital transformation
another.”
› “Because everyone is now on the same platform, secondary schools
use their resources to support the local primary schools. There is a
consortium to get resources and support collectively rather than each
school individually.”

9 | The Total Economic Impact™ Of Microsoft 365 Education

› “The data aggregation opportunity within Microsoft 365 is huge. My
team uses it for pulling data for all of our reports.”

Improved Teacher Experiences

Teachers have benefited greatly from Microsoft 365. In addition to
helping them create more engaging ways to teach, it has freed up time
from administrative tasks and grading, and it has also improved their
professional development and training. Some examples Forrester heard
include:
Time Savings
› “The more devices in the classroom, the more time teachers are
saving. Technology creates efficiency in giving assignments and
autoscoring.”
› “Everyday productivity increases. Teachers don’t have to go in and “I use Microsoft Forms quite a
manually add students to rosters and create groups. In the past, it took bit for assessments. I add a
4 or 5 minutes per student at the start of every semester and for link to the form in Teams.
student transfers.” Forms automatically grades
the students’ exams and
› “I save a lot of time on administrative efforts. When I did not have to sends me an Excel
create rosters at the start of the year it was amazing.” spreadsheet. It saves me 6
› “Teachers with all their students on personal devices are probably hours per week.”
saving 15 minutes per day in classroom management.” Sixth grade math teacher
Professional Development
› “Teachers get their professional growth from the same platform. It is
more time efficient.”
› “We are also using the solution for teacher professional development.
In the past teachers would travel to the city for face-to-face
experiences which meant time was very limited. A lot of schools could
not afford to send teachers as much as they wanted. Now there are a
wider range of professional learning possibilities.”
› “We are providing more online courses and webinars for staff than ever
before using Skype for Business. We also use Skype for Business for
curriculum conference calls.”
Other
› “It is difficult to recruit teachers in remote areas. Now teachers have
better connectivity both for work and personal use, so they don’t feel
so disconnected.”
› “We have 52,000 Teams that have been created. Within and beyond
schools, people are collaborating. It has become a part of how
teachers work together every day. They have definitely gravitated to it.”
› “Teachers loved going back to Microsoft Office. The game changing
product, outside of Intune, was Microsoft Teams. It drove engagement
with students. Teams allow teachers to facilitate quicker video
interactions, which means quicker lessons, which means better
engagement.”
For the financial analysis, Forrester included the time that was saved
scoring tests and setting up class rosters as a proxy for the value
realized from additional in-class instructional time, and assumes that:

10 | The Total Economic Impact™ Of Microsoft 365 Education

› Teachers save 5 minutes per student, setting them up in the class
systems at the start of each semester.
› Teachers save 6 hours per week by not having to manually score tests.
› Twenty-five percent of the total savings was realized in Year 1 to
account for change management and rolling out of devices to all
students.
› These time savings can be used to deliver additional instruction to
students, complete professional development, or accrue less overtime
costs.
› In addition to improved student learning, this productivity gain may
allow for financial benefits in a school district to be implemented in one
or more ways. For example, it can lead to an increase in the teacher
student ratio, and it can reduce staff turnover and the associated costs
of onboarding new teachers.
› Only 25% of the total time and cost savings was included because not
all increases in productivity result in more work being completed or the
Impact risk is the risk that the business
ability to realize quantifiable savings. or technology needs of the
› An average base salary of $45,000 was used. organization may not be met by the
investment, resulting in lower overall
This benefit can vary greatly depending on how teachers are using total benefits. The greater the
Microsoft 365 for tasks like autoscoring. It can also vary based on the uncertainty, the wider the potential
teacher compensation model. To account for these risks, Forrester range of outcomes for benefit
adjusted this benefit downward by 15%, yielding a three-year estimates.
risk-adjusted total PV of $17.61 million.
Teacher Time Savings: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
A1 Number of students 60,000 60,000 60,000

A2 Number of teachers 5,500 5,500 5,500

A1*5 minutes/60*2
A3 Time saved setting up classes (hours) semesters (25% realized 1,250 5,000 5,000
in Year 1)
A2*6 hours*36 weeks
A4 Time saved grading tests 297,000 1,188,000 1,188,000
(25% realized in Year 1)
Average teacher fully burdened cost ($45,000+30%)/(38
A5 $38.49 $38.49 $38.49
(hourly) weeks*40 hours)

A6 Productivity capture adjustment 25% 25% 25%

At Teacher time savings (A3+A4)*A5*A6 $2,869,911 $11,479,643 $11,479,643

Risk adjustment ↓15%

Atr Teacher time savings (risk-adjusted) $2,439,424 $9,757,696 $9,757,696

11 | The Total Economic Impact™ Of Microsoft 365 Education

Improved IT And Cost Savings
Moving to Microsoft 365 Education cloud solution eliminates many costs
associated with an on-premises solution. It also delivers, in many cases,
better performance, availability, and security than what a school district “Once development is
could achieve with their on-premises solution or other cloud-based complete, the results of this
solutions being considered. new transformative digital
Regarding cost savings, interviewees said: platform will see a minimum
20% annual IT savings.”
› “We expect cost recovery within two years and then being able to put
$7 million to $8 million per year [back into the coffers].” Head of digital transformation

› “Having the solution in the cloud makes it easier for us, and our IT
team is stretched thin. Microsoft 365 is also more user friendly and has
better self-service tools, so IT professionals don’t have to be the one to
do everything.”
› “We got rid of other systems for web conferencing and learning
management. That saves us $125,000 per year.”
› “It would have been $4 million to upgrade our on-premises systems.
Instead, we are spending $400,000 per year [for Microsoft 365
Education].”
› “It would have been cost prohibitive to build this out ourselves. We had
20MB mailboxes when on-premises and we’re looking at implementing
1GB or 2GB mailboxes. The storage piece alone was 4x to 5x the
money we would have gotten. I wasn’t going to take on a project we
couldn’t do right.”
› “We would have spent several million dollars up front on windows
licenses plus 6,000 user licenses had we stuck with our past, in-house
solutions.”
› “If we did everything on-premises, at least one more person would
have been needed just to maintain the exchange servers and keep up
with email accounts and security.”
› “To replace the Exchange server and licenses would have been
$50,000 that year. That is more than I wanted to pay when I could
move it to the cloud.”
› “With Microsoft 365 Education licenses, you buy it for employees, and
it is free for the students. Our past solution cost $35 per student.”
› “Microsoft 365 is so easy to manage. It is a force multiplier. It is still me
and one other person managing the tenants, including Azure.”
› “We have removed at least four or five people around system
administration tasks and reassigned them to more valuable activities
[such as instructional learning].”
› “We used to have a disaster recovery solution. Now we don’t need it so
that cost has gone away.”
Interviewees had the following things to say about improved
performance, availability, and security:

12 | The Total Economic Impact™ Of Microsoft 365 Education

› “No matter how much money we would pour into security, Microsoft’s
data centers are more secure than our infrastructure was.” “Anytime you move to a cloud
solution the size of Microsoft,
› “We had a lot of data leaks before and now there’s a strong need for uptime is better. Our users
digital rights management (DRM). Also, student privacy is very demand that.”
important. For example, nurses can now send emails with student
information that only the intended person can read.” Executive director, IMS

› “Microsoft 365 is easily scalable and future ready. No matter how many
users we add, we don’t have to add hardware.”
› “It increased the whole security of the platform. Previously, schools
were struggling with securing their data.”
› “Information rights management is baked into the Microsoft world. We
have Azure rights management turned on, and our default setting is to
have One Drive locked. We also use drive encryption.”
For the financial analysis, Forrester included cost savings described by
interviewees and scaled them for the composite organization size.
Forrester assumes that:
› Upgrading an on-premises solution would have cost $3.5 million
upfront in hardware and licenses. There would be an additional
$250,000 per year spent on increasing storage and compute power as
well as a 15% maintenance contract cost.
› On-premises hosting and cooling would cost $75,000 per year.
› Four FTEs could be redeployed, avoiding future hires. This was lower
in Year 1.
› Other webconferencing and learning management solutions could be
eliminated, creating savings of $125,000 per year. This is less in Year 1
to account for the cutover and contract periods.
The savings from one school district to another can vary greatly
depending on their previous solutions and approaches to IT
management. To account for these risks, Forrester adjusted this benefit
downward by 10%, yielding a three-year risk-adjusted total PV of $5.38
million.

13 | The Total Economic Impact™ Of Microsoft 365 Education

IT Savings: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
B1 Avoided infrastructure uplift $3,500,000 $250,000 $250,000

B1(sum through
B2 Avoided infrastructure maintenance $525,000 $562,500 $600,000
current year)*15%

B3 On premises hosting savings $75,000 $75,000 $75,000

FTE savings (future hires and

B4 2 4 4
reassignments)

B5 IT fully burdened cost $55,000+30% $71,500 $71,500 $71,500

B6 Eliminated other technologies $50,000 $125,000 $125,000

B1+B2+B3+(B4*B5)+
Bt IT savings $4,293,000 $1,298,500 $1,336,000
B6

Risk adjustment ↓10%

Btr IT savings (risk-adjusted) $3,863,700 $1,168,650 $1,202,400

Device Savings And Student Use Benefit

Providing each student with a personal device to access learning content
and tools was a major goal of the interviewed school districts. Because “Previously, device
of the volumes involved the cost to purchase and provision these devices management was entirely
was quite high. Regarding cost and effort savings, interviewees said: manual. That meant we had to
touch all the devices. Now we
› “Purchasing windows computers was $33 less out the door than our
are using Intune for inventory
other options. This includes hardware, licenses, accessories, warranty,
management and pushing out
and the collaboration platform.”
software. It saves us a lot of
› “We manage the entire fleet with Intune including deploying software time. We only have four
and pushing security policies.” technicians to support all
› “It used to take 3 hours to get a computer ready to ship, now it takes students and employees.”
just 21 minutes.” Director of technology
› “We have multiple groups with different categories of students. We can
deploy packages based on what a teacher is needing. For example,
dictation software for three kids in the southwest corner of the state.
We created a group, assigned it, downloaded the software and
licenses from [the vendor], and then had Intune deploy it. If we didn’t
have Intune, students would have had to ship the devices back, or we
would contract locally with a mobile device management company to
touch the machines.”
› “Intune for Education allowed us to run a single deployment
configuration using one master image to every computer that we have
organization-wide. That cut our deployment time from months down to
weeks.”
› “There were no security events on student devices this year. In the
past we had them every week. Technicians would have to reimage a
machine or clean it up. Cleaning it could take several hours.”

14 | The Total Economic Impact™ Of Microsoft 365 Education

› “One of the big driving factors for moving to Microsoft 365 was the
configuration manager for endpoint security. We haven’t had a major
security event since migrating, and can use System Center to reimage
badly infected machines if there is a problem.”
› “Microsoft 365 give us better security which means less time
remediating effort.”
Microsoft 365 Education also provides a student use benefit. In addition
to students using the free Office 365 A1 solution, they also get free use
of the following solutions:
› Office client apps
› Office 365 Cloud App Security
› Advanced Threat Protection
› Intune for Education
› Windows 10 Education
› Azure Active Directory Premium (Plans 1 & 2)
› Advanced Threat Analytics
› Minecraft: Education Edition
Taken together, the Office 365 Education A1 solution and the student
use benefit is almost on par with the Microsoft 365 Education A3 solution
which is priced at $4.25 per student per month.
For the financial analysis, Forrester included cost and times savings
described by the interviewees. Forrester assumes that:
› Each fully configured Windows device (software and hardware) costs
$33 less than other alternatives.
› The time to fully configure a device using InTune for Education was
reduced by 2.5 hours, an 84% time savings.
› Devices last for more than three years and do not need to be replaced
or touched again during the life of the study. Any costs in this category
would be covered by a four-year warranty.
› Twenty security remediation events are eliminated during each week of
the school year.
› There is a $4.25 per month student use benefit because a Microsoft
365 Education A3 license is not needed to deliver the desired solutions
to students.
› For model simplicity, all devices were added at the start of the project
in a big bang approach. A phased approach would spread out the
benefits and costs over a longer period.
The savings will vary based on: 1) how devices were previously
managed, 2) how volume discounts were negotiated to buy devices and
phasing, and 3) how many students take advantage of the student use
benefit. To account for these risks, Forrester adjusted this benefit
downward by 10%, yielding a three-year risk-adjusted total PV of $13.52
million.

15 | The Total Economic Impact™ Of Microsoft 365 Education

Device Savings And Student Use Benefit: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
C1 Device hardware savings (A1+A2)*$33 $2,161,500

(A1+A2)*2.5
C2 Device setup time savings $5,854,063
hours*$35.75
720 incidents*2
C3 Device security remediation savings $51,480 $51,480 $51,480
hours*$35.75

C4 Student use benefit A1*$4.25*12 months $3,060,000 $3,060,000 $3,060,000

Ct Device savings C1+C2+C3 $11,127,043 $3,111,480 $3,111,480

Risk adjustment ↓10%

Device savings and student use benefit

Ctr $10,014,338 $2,800,332 $2,800,332
(risk-adjusted)

16 | The Total Economic Impact™ Of Microsoft 365 Education

Flexibility
The value of flexibility is clearly unique to each customer, and the
measure of its value varies from organization to organization. There are
multiple scenarios in which a customer might choose to implement
Microsoft 365 Education and later realize additional uses and business Flexibility, as defined by TEI,
opportunities. Examples shared by interviewees included: represents an investment in additional
capacity or capability that could be
› Rolling out to additional student groups if not part of the original turned into business benefit for a future
deployment, e.g., elementary school students. additional investment. This provides an
organization with the "right" or the
› Creating more tailored solutions for students using Sway and other ability to engage in future initiatives but
applications. not the obligation to do so.

› Increased data synchronization with other back-end systems.

› Expand the usage of Teams.
› Provide professional development training for employees (if not
already in place).
› Add PSTN calling within Skype for Business.
› Move more systems into the Azure data center.
› Rolling out Microsoft Dynamics.
› Building out additional data analytics capabilities using Power BI and
MyAnalytics.
None of these future opportunities are included in the financial analysis.

17 | The Total Economic Impact™ Of Microsoft 365 Education

Total Costs
PRESENT
REF. COST INITIAL YEAR 1 YEAR 2 YEAR 3 TOTAL VALUE
Dtr Deployment $2,860,200 $0 $0 $0 $2,860,200 $2,860,200

Etr Microsoft 365 licenses $0 $483,000 $483,000 $483,000 $1,449,000 $1,201,150

Ftr Devices $13,755,000 $0 $0 $0 $13,755,000 $13,755,000

Gtr Ongoing management $0 $369,600 $369,600 $369,600 $1,108,800 $919,140

Total costs (risk-adjusted) $16,615,200 $852,600 $852,600 $852,600 $19,173,000 $18,735,490

Deployment
The time and effort required to deploy Microsoft 365 Education varied
greatly across the interviewed organizations. Some of the main variables
were: if Microsoft solutions such as Exchange were previously in use; the The table above shows the total of all
size of the IT team; number of schools to be deployed; and available costs across the areas listed below, as
budget. Typically, Exchange and other solutions such as SharePoint and well as present values (PVs)
Teams were rolled out quickly, and there was then a long tail for discounted at 10%. Over three years,
the composite organization expects
adoption. risk-adjusted total costs to be a PV of
From a staffing perspective, the deployment team was comprised of more than $18.7 million.
existing internal resources and sometimes professional services were
used. Internally, most of the people worked on the deployment as part of
their regular duties, e.g., training, and worked on this part-time. The
project was spearheaded by the IT organization.
Below are deployment timeline examples from the interviewed
organizations.
52,000 Student School District
› “We worked with two companies that provided the devices with
managed installation and asset recovery. Part of the project was
“Teachers like being
getting rid of the junk we had. We would migrate a school over the
weekend.” upgraded. They like to be on
the latest and greatest
› “We got our licenses in September 2014. On October 20th everyone technology.”
was on [Microsoft 365]. Most of the time was spent in testing to make
Technology network coordinator
sure things were working better, e.g., synchronization and identity data.
Fifteen people worked part-time.”
› “Creating SharePoint sites took longer. We worked with Microsoft
consulting and didn’t complete that until May 2015.
80,000 Student School District
› “We created new credentials in April of this year. Everyone had access
then. Schools that previously had Office on-premises or nothing could
use Microsoft 365 right away. Those moving from other tools are being
migrated and receiving training through the rest of 2017. We are
migrating ten schools per week.”
› “It took around six months to migrate 163 tenants and the data.”
› “The integration/migration team consisted of eight people, mainly
contractors.”

18 | The Total Economic Impact™ Of Microsoft 365 Education

75,000 Student School District
› “Two of us managed the migration. We did five schools each night for
about one month. It was pretty easy because we already had Active
Directory in place.”
› “Once the email transition was done, we worked on updating work
stations. We built a couple of images, and the schools upgraded as
they had time using System Center.”
› “Because everything was scripted using PowerShell, we were able to
let the computers do most of the work for us.”
› “We handled the change management piece ourselves. If you offer
new solutions that people want, they’ll teach themselves how to use it.
School-based technical associates work with the local staff, and it is
business as usual.”
6,100 Student School District
› “We did an email migration previously, and that took one week. We
also stood up Office 365 then.”
› “We are doing a phased rollover. This year was middle schools. We
deployed 2,000 laptops in four weeks. We replace hardware every four
years, and buy devices with a four-year warranty.”
› “We are used to outside vendors including help on the [Microsoft 365]
rollout.”
For the financial analysis, Forrester based the deployment on the larger
interviewed school districts. A big bang approach was used for rolling out
Microsoft 365 Education and devices to all students, teachers, and
administrators. This was done, in part, to keep the financial model
simple. Forrester made the following assumptions:
The main deployment lasted nine months. This included standing up
Microsoft 365 and adding all the users. Ongoing SharePoint and Teams
increased rollout is considered business as usual and not included.
› Four internal technology FTEs were managing and doing most of the
work on the deployment. Additional resources were involved on a part-
time basis from across the organizations, e.g., training, learning
development, and school technology champions. Most of this
additional effort was around change management and adoption.
› Outside professional services cost $150,000. They assisted mainly
with configuration, applying best practices, and training the IT team.
As shown above, there are a wide variety of approaches to rolling out
Microsoft 365 and the level of effort required. To account for these risks, Implementation risk is the risk that a
Forrester adjusted this cost upward by 5%, yielding a three-year risk- proposed investment may deviate from
adjusted total PV of $2.86 million the original or expected requirements,
resulting in higher costs than
anticipated. The greater the
uncertainty, the wider the potential
range of outcomes for cost estimates.

19 | The Total Economic Impact™ Of Microsoft 365 Education

Deployment: Calculation Table
REF. METRIC CALC. INITIAL

D1 Number of months 9

D2 Number of internal FTEs 4

D3 IT fully burdened cost =B5 $71,500

D4 Professional services $150,000

Dt Deployment D1*D2*D3+D4 $2,724,000

Risk adjustment ↑5%

Dtr Deployment (risk-adjusted) $2,860,200

Microsoft 365 Education Licenses

Microsoft 365 Education is a SaaS solution based on an annual recurring
fee. This is charged for faculty and staff users, and students can use
Microsoft 365 for free. There are a couple of different flavors of Microsoft
365 Education with different prices, so the reader is encouraged to work
with their implementation partner to determine which solution is best for
them.
Forrester made the following assumptions:
› Microsoft 365 was adopted by 5,500 teachers and 1,500 other school
district employees. The number of users was kept constant throughout
the study for simplicity.
› They all use the Microsoft 365 A3 license, which has a list price of $69
per user per year.
Because list pricing was used, no risk adjustment was applied to this
cost. The three-year total PV cost was $1.2 million
Microsoft 365 Education Licenses: Calculation Table
REF. METRIC CALC. INITIAL YEAR 1 YEAR 2 YEAR 3

E1 Number of teachers 5,500 5,500 5,500

E2 Number of other staff users 1,500 1,500 1,500

E3 Microsoft 365 A3 license costs $5.75*12 months $69 $69 $69

Et Microsoft 365 licenses (E1+E2)*E3 $483,000 $483,000 $483,000

Risk adjustment 0%

Etr Microsoft 365 licenses (risk-adjusted) $483,000 $483,000 $483,000

20 | The Total Economic Impact™ Of Microsoft 365 Education

Devices
To realize the full student learning benefits from Microsoft 365 Education,
students need to have devices to use. Ideally, this is a 1 to 1 ratio. Some
school districts let the students take the devices home, and others check
the devices in and out each day.
Device costs can vary based on specifications and volume discounts.
Typically, the school districts planned for the devices to last four years
and purchased them with a four-year warranty. One school district that
made a bulk purchase of more than 4,000 laptops negotiated a price of
$194 which included the hardware, licenses, accessories, warranty, and
collaboration platform. Other districts reported spending between $200
and $400, depending on the device.
There were also different approaches to rolling out the devices. Some
school districts did everything at once, and others did a rollout over a
couple of years. For example, high schools might be rolled out as part of
the initial deployment, followed by middle schools, and then primary
schools. This is dependent on budget, staff capacity, and change
management issues. Device vendor financing could be used to spread
out the costs, allowing for more devices to be deployed faster.
Adding these devices and having people use the internet more can result
in increased bandwidth usage. However, most schools reported that
there was not that much of a change, and that the incremental costs
were very small and often subsidized. One interviewee said, “We added
bandwidth, going from 300MB to 900MB. E-rate pays for most of the
increase, so the price hasn’t gone up much.” Another interviewee said:
“We already had pretty high bandwidth because of online testing. We
analyzed bandwidth differences since moving to Microsoft 365 and saw
very little increase in bandwidth utilization.”
For the financial analysis, Forrester made the following assumptions:
› Devices were deployed in a big bang approach for all students and
teachers. For simplicity, all purchase costs are shown in the initial
period. In reality, a school district may use financing options to spread
the costs out over multiple years.
› The average cost per device was $200. This included a four-year
warranty, so any replacement costs during the life of the study are born
by the warranty.
› Configuration and deployment services were largely done by the
hardware vendor and their partners, along with internal IT resources.
School districts may pay more for hardware depending on the
specifications and volume discounts. To account for these risks,
Forrester adjusted this cost upward by 5%, yielding a three-year risk-
adjusted total PV of $13.75 million.

21 | The Total Economic Impact™ Of Microsoft 365 Education

Devices: Calculation Table
REF. METRIC CALC. INITIAL

F1 Student devices A1*$200 $12,000,000

F2 Teacher devices A2*$200 $1,100,000

Ft Devices F1+F2 $13,100,000

Risk adjustment ↑5%

Ftr Devices (risk-adjusted) $13,755,000

Ongoing Management
The IT labor savings from not having to manage on-premises
infrastructure is discussed in the Benefits section of the study. Ongoing
internal effort switched from keeping the lights on to other activities, such “Microsoft 365 is very user
as helping to rollout additional SharePoint sites and Teams sites. There friendly. There are a wide
are also ongoing efforts to configure Microsoft 365, handle new users, variety of tools that teachers
device management, and rollout new features. need to be prepared to teach
Overall, the added efforts and eliminated ones tend to equate basically themselves how to use. No
no change in overall IT staff. “We have not had to add additional matter what my team is
resources yet. We are supporting more technology, but still have same looking to do, they can find it
staff number as 15 years ago,” said one interviewee at a school district in Microsoft 365.”
with 75,000 students. Another district with 6,100 students reported, “one
Manager of institutional
FTE is dedicated to Microsoft 365.”
technology
Additionally, there are a lot of other roles across the district that are
working on Microsoft 365. These are mainly business as usual activities
that moved over from other learning support activities. For example, one
school district with 52,000 students reported that they have “nine
instructional training people, one data scientist, and two data analysts
that are all working with Microsoft 365 now.” They also have four
resources that are, “working on ongoing SharePoint adoption.” Overall, “I encourage everyone to go to
this district added around four FTEs, involved in managing the solution. Microsoft 365. The ease of
management and data
For the financial analysis, Forrester made the following assumptions:
synchronization makes a huge
› Four internal FTEs are dedicated to supporting Microsoft 365 and the difference in how we are better
ongoing rollout of solutions such as SharePoint and Teams sites. able to assist our students in
Although these are not new hires, they are included as part of a total learning.”
cost of ownership analysis.
Director of technology
› Other internal efforts around adoption and support are carried out by
resources across the organization, and this time replaced past
activities. Therefore, there is no incremental increase in headcount.
› On average, $50,000 per year is spent on professional services around
deploying new Microsoft 365 solutions and ongoing best practice
adoption.
These costs can be higher if a school district’s IT department is already
understaffed. To account for these risks, Forrester adjusted this cost
upward by 10%, yielding a three-year risk-adjusted total PV of $919,410.

22 | The Total Economic Impact™ Of Microsoft 365 Education

Ongoing Management: Calculation Table
REF. METRIC CALC. INITIAL YEAR 1 YEAR 2 YEAR 3

G1 Internal resources 4 FTEs*$71,500 $286,000 $286,000 $286,000

G2 Professional services $50,000 $50,000 $50,000

Gt Ongoing management G1+G2 $336,000 $336,000 $336,000

Risk adjustment ↑10%

Gtr Ongoing management (risk-adjusted) $369,600 $369,600 $369,600

23 | The Total Economic Impact™ Of Microsoft 365 Education

Financial Summary
CONSOLIDATED THREE-YEAR RISK-ADJUSTED METRICS

Cash Flow Chart (Risk-Adjusted) The financial results calculated in the

Benefits and Costs sections can be
used to determine the ROI, NPV, and
payback period for the composite
organization's investment. Forrester
assumes a yearly discount rate of 10%
for this analysis.

These risk-adjusted ROI,

NPV, and payback period
values are determined by
applying risk-adjustment
factors to the unadjusted
results in each Benefit and
Cost section.

Cash Flow Table (Risk-Adjusted)

PRESENT
INITIAL YEAR 1 YEAR 2 YEAR 3 TOTAL VALUE
Total costs ($16,615,200) ($852,600) ($852,600) ($852,600) ($19,173,000) ($18,735,490)

Total benefits $0 $16,317,462 $13,726,678 $13,760,428 $43,804,569 $36,516,832

Net benefits ($16,615,200) $15,464,862 $12,874,078 $12,907,828 $24,631,569 $17,781,342

ROI 95%

Payback period 14 months

24 | The Total Economic Impact™ Of Microsoft 365 Education

Microsoft 365 Education: Overview
The following information is provided by Microsoft Forrester has not validated any claims and does not endorse
Microsoft or its offerings.
Microsoft 365 Education empowers educators to unlock creativity, promote teamwork, and provide a simple and
safe experience in a single, affordable solution built for education.
Unlock Creativity In Each Student
› Spark creativity, collaboration, and problem-solving with immersive and engaging apps.
› Enhance independence for students of all abilities with intelligent tools.
› Bring ideas to life in 3D and data visualization tools.
Promote Teamwork
› Collaborate and save educators time with a single hub for classes and teams.
› Easily connect with others and co-author in real time.
› Meet the needs of individual students with a universal toolkit to connect, share, and communicate in class and
out.
Provide A Simple And Safe Experience
› Manage users, data, and devices with a single dashboard.
› Protect identity, apps, data, and devices with intelligent security enhanced by machine learning.
› Manage data archiving, governance, and discovery.
Microsoft 365 Education Solutions

25 | The Total Economic Impact™ Of Microsoft 365 Education

Appendix A: Total Economic Impact
Total Economic Impact is a methodology developed by Forrester
Research that enhances a company’s technology decision-making
processes and assists vendors in communicating the value proposition PRESENT
of their products and services to clients. The TEI methodology helps VALUE (PV)
companies demonstrate, justify, and realize the tangible value of IT
initiatives to both senior management and other key business The present or current value of
stakeholders. (discounted) cost and benefit
estimates given at an interest rate
(the discount rate). The PV of costs
and benefits feed into the total NPV
Total Economic Impact Approach of cash flows.

Benefits represent the value delivered to the business by the

product. The TEI methodology places equal weight on the NET PRESENT
measure of benefits and the measure of costs, allowing for a VALUE (NPV)
full examination of the effect of the technology on the entire
organization. The present or current value of
(discounted) future net cash flows
given an interest rate (the discount
rate). A positive project NPV
normally indicates that the
Costs consider all expenses necessary to deliver the investment should be made, unless
proposed value, or benefits, of the product. The cost category other projects have higher NPVs.
within TEI captures incremental costs over the existing
environment for ongoing costs associated with the solution.
RETURN ON
INVESTMENT (ROI)

A project’s expected return in

Flexibility represents the strategic value that can be percentage terms. ROI is
obtained for some future additional investment building on calculated by dividing net benefits
top of the initial investment already made. Having the ability (benefits less costs) by costs.
to capture that benefit has a PV that can be estimated.

DISCOUNT
RATE

Risks measure the uncertainty of benefit and cost estimates The interest rate used in cash flow
given: 1) the likelihood that estimates will meet original analysis to take into account the
projections and 2) the likelihood that estimates will be time value of money. Organizations
tracked over time. TEI risk factors are based on “triangular typically use discount rates
distribution.” between 8% and 16%.

PAYBACK
The initial investment column contains costs incurred at “time 0” or at the PERIOD
beginning of Year 1 that are not discounted. All other cash flows are discounted
using the discount rate at the end of the year. PV calculations are calculated for The breakeven point for an
each total cost and benefit estimate. NPV calculations in the summary tables are investment. This is the point in time
the sum of the initial investment and the discounted cash flows in each year. at which net benefits (benefits
Sums and present value calculations of the Total Benefits, Total Costs, and minus costs) equal initial
investment or cost.
Cash Flow tables may not exactly add up, as some rounding may occur.

26 | The Total Economic Impact™ Of Microsoft 365 Education