How BYOD Saved VMware $2 Million

As more companies adopt a bring-your-own-device (BYOD) approach to mobile, many are getting caught by hidden costs. But virtualization titan VMware has bucked that trend. Former VMware CIO Mark Egan explains how his company accomplished its feat.

Fri, February 01, 2013

CIO — As more and more organizations explore the possibilities of bring-your-own-device (BYOD), it has become an oft-repeated refrain: Don't expect to save money by going the BYOD route. But a number of high-profile companies—Cisco, VMware and Ingram Micro among them—have reported significant savings. What's their secret?

It seems counterintuitive, but last year, Aberdeen Group found that the costs for a company with 1,000 mobile devices go up by $170,000, on average, when they adopt BYOD. Why? Hidden costs. Premiums go up because employees no long have access to volume discount rates. The number of expense reports processed skyrockets, meaning more processing costs. Then there are setup, security and compliance costs and more.

Looking at these hidden costs, Nucleus Research in November predicted the BYOD trend will soon begin to shrink as CFOs balk.

Escaping the Hidden Costs of BYOD

And yet, companies like VMware have famously managed to buck the trend.

"The results of this were quite positive," VMware CIO Mark Egan told before he left the company in December for consulting firm StrataFusion. "I'm saving seven figures in the U.S. alone on cell phones."

VMware went "all-in" on BYOD in the fourth quarter of 2011.

"Although I had a fairly liberal approach [to BYOD], it just wasn't enough," Egan explains. "I wasn't getting the new device immediately available to my business partners. We were spending a lot. That's when we decided let's give everybody choice. What we did is we moved all of the employees to personal liability and expense reimbursement. We were spending approximately $172 a month per user in the U.S. My savings are about $2 million that I'm going to save this year in the U.S."

Determine Whether Employees Actually Need a Device for Work

It seems simple, but if that's all VMware had done, Egan might have found that his organization's costs were spiraling out of control like that of some other organizations that have adopted the BYOD approach. Egan stresses that one of the first key steps VMware undertook was to perform a company-wide assessment of who had corporate-owned mobile devices and whether they actually needed a mobile device to do their job.

"Are you eligible for a phone?" he asks. "We added a lot more oversight over whether they needed a phone for work."

"We had more phones out there than was deemed by management to be appropriate," Egan says. "It hit the IT cost center. We eliminated several hundred phones, which came up to the tune of $500,000 for the first year."

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