Windows 7 Enterprise Upgrades: The Costs and the Benefits

Windows XP has been called “the operating systems that won’t die” — and with good reason. Eight and a half years after its release, XP still powers 80 percent of all Windows-based enterprise PCs, according to research firm Forrester.

But time is finally working against the steadfast XP, and factors are uniting to give enterprises compelling reasons to migrate to Windows 7. Those factors include: aging XP infrastructures need refreshing; Windows XP’s support is nearing an end; XP’s availability will eventually get squeezed; and client virtualization has evolved and can speed up migrations.

[ For complete coverage on Microsoft’s new Windows 7 operating system — including hands-on reviews, video tutorials and advice on enterprise rollouts — see CIO.com’s Windows 7 Bible. ]

“Our customers used to talk about if they were going to migrate to Windows 7. Now they’re talking about when and how,” says Gavriella Schuster, Microsoft’s general manager of Windows product management.

To motivate Windows 7 migrations, Microsoft this week announced the availability of MDOP 2010, the latest iteration of its deployment tool suite for software assurance customers. MDOP 2010’s application (App-V 4.6) and desktop (MED-V 1.0) virtualization features have been updated to ease migrations to Windows 7 and Office 2010.

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But a mass migration to Windows 7 certainly does not come cheap and without risks. However, a recent Microsoft-commissioned TEI (total economic impact) study conducted by Forrester Consulting concludes that Windows 7 provides big ROI (return on investment) over time, roughly a 129 percent ROI over three years with a break-even point of 13 months after deployment.

For the study, Forrester conducted extensive interviews with 12 companies currently using Windows 7, ranging from a large U.S. municipality to a northern European oil and gas company. The companies were provided by Microsoft.

From the data culled from the 12 companies, Forrester created a fictional composite company to demonstrate the costs, benefits and risks of implementing Windows 7. The composite company generates $1 billion in annual revenue with several locations around the globe; has 5,000 employees who travel frequently; has a mix of Windows XP and Vista in place prior to deployment; uses a three-year workstation refresh cycle, with a 35/65 desktop/laptop ratio.

Forrester emphasizes that their numbers are estimates, and that the costs and benefits for organizations will vary based on factors such as number of users, language requirements and server configurations.

The Costs

Some key cost findings from the study:

— For the composite company, total cost of Windows 7 deployments for initial pilot testing and the first three years of running the OS is $689,727.

— This includes management of pilot testing, application testing, PC deployment, end-user training (this is the highest cost at $340,000 over three years); hardware costs; and the IT labor around Windows Server 2008 R2.

The Benefits

But with Windows 7 costs come benefits. Over three years, Forrester’s composite company will ultimately save approximately $2,124,299. Here’s a breakdown:

— $275,805 in PC build and deployment savings. This is based on 1.5 hours of time saved per machine for 1,500 machines per year over three years because of fewer images to manage, fewer software updates, and 50 percent reduction in the time required to provision users with new machines.

— $250,000 from fewer help desk calls, assuming that 2.5 calls per machine (at $20 per call) would be avoided due to better OS stability.

— $546,000 in reductions to the help desk’s workload due to better system stability, new self-help troubleshooting features in Windows 7, and a drop in help desk call volume as well as shorter calls when issues are resolved faster.

— $408,000 in savings from increased PC reliability for mobile and remote workers if each incident that would have resulted in two days of lost PC productivity is avoided.

— $239,400 in improved protection of a company’s intellectual property through encryption features BitLocker and BitLocker To Go, assuming that 12 instances of data theft a year with a cost of $100,000 per instance would be avoided. Forrester stresses that this estimate is “exceedingly conservative.”

— $147,000 in total PC power savings at $30 to $60 in savings per machine through greater use of sleep/standby/hibernate functions enforced by Group Policies.

— $78,000 in IT management savings through DirectAccess, which eliminates VPNs and lets IT engineers manage PCs of remote workers as easily as they can those at corporate headquarters. Forrester estimates DirectAccess will save the 2.5 IT engineers responsible for PCs seven hours per week each.

— $180,000 in bandwidth upgrade cost savings through BranchCache, which in conjunction with Windows Server 2008 R2 speeds up access to remote files for workers in branch offices by caching a copy of files locally. Forrester estimates this will save the composite company $30,000 per branch office per year in bandwidth upgrade fees.

Shane O’Neill is a senior writer at CIO.com. Follow him on Twitter at twitter.com/smoneill. Follow everything from CIO.com on Twitter at twitter.com/CIOonline.