Molupta Facea Report | 1

ROI Analysis
Prepared for Capgemini on September 26, 2020

Red Hat OpenShift is the industry-leading container application platform

for enterprise IT organizations looking to enable digital transformation,
accelerate application development while making optimal use of
infrastructure.

This report is based on research from IDC, along with your responses, to
create an analysis tailored to your organization and IT environment.

Prepared for
Capgemini on
September 26, 2020
Industry: IT Services
Business applications
expected to leverage
OpenShift: 200
Application developers
expected to utilize
OpenShift: 113
Physical servers that
will be hosting these
applications: 83
IT staff supporting this
environment and these
applications: 46
Your potential benefits adopting the Red Hat OpenShift Platform
£3,216,296
Average Annual
Benefits per 100
Developers
“Red Hat customers reported that
the OpenShifft platform is creating
significant value by enabling the
timely and flexible delivery of
compelling applications.” – IDC
Red Hat OpenShift ROI Analysis | 2
EXECUTIVE SUMMARY
Industries are being disrupted with unexpected competition requiring IT departments
to become agile in responding to meet evolving business needs. Enterprise IT is
transforming by taking a fresh approach and leveraging modern tools to help
developers become more efficient in delivering innovative solutions. Leveraging
analytics from increasing volumes of data to automate common processes is
increasingly becoming the new normal for intelligent applications. Application
platforms supporting an architecture that gives developers a wide choice of
components across hybrid cloud infrastructure are a preferred path in the enterprise
cloud adoption journey.
THE BUSINESS BENFITS OF RED HAT OPENSHIFT
The OpenShift platform creates value by enabling the timely and flexible delivery of
compelling applications and services across heterogeneous IT environments. As a
result, development teams can better meet business demand and support.
• IT infrastructure cost reductions: Developing on the OpenShift platform
requires fewer testing and production servers due to its support of
containerization, microservices, and multitenancy.
• IT staff productivity benefits: Application developers, including DevOps team
members, deliver more applications and major features and need less time to
deliver on the OpenShift platform, meaning that they contribute substantially
more value to their organizations.
• Risk mitigation — user productivity benefits: Applications developed on the
OpenShift platform experience fewer user- and business-impacting outages.
• Business productivity benefits: Meeting demand for compelling and high-
quality business applications and services on the OpenShift platform leads to
improved business results and enhanced employee productivity levels.
66% 37% £4.27
Faster Application Less IT Staff Time Higher Revenue per
Development Life Required per Organization per 100
Cycles Application Developed Developers
“The real value for us of using “Organizations reported that new “We have more revenue because
OpenShift is that we can go to applications/ features require less of OpenShift — at least hundreds
market really fast …OpenShift has staff time, a significant efficiency of thousands of dollars per year.
a great community of users and we for organizations with hundreds of We’re moving 4 times faster now
move faster than our competitors.” developers.” - IDC and it’s supporting our growth.”
 Red Hat OpenShift ROI Analysis | 3

BENEFITS SUMMARY
The table below contains the four key areas of benefit: IT infrastructure cost reduction, IT staff productivity
benefits, risk mitigation and business productivity benefits
Annual Potential Benefits
Year 1 Year 2 Year 3 Year 4 Year 5 Total

IT Infrastructure Cost
£76,369 £81,036 £81,036 £81,036 £81,036 £400,512
Reductions

IT Staff Productivity
£1,434,803 £2,984,392 £3,103,767 £3,227,918 £3,357,035 £14,107,915
Benefits

Risk Mitigation – User

£4,231 £8,799 £9,151 £9,517 £9,898 £41,596
Productivity Benefits

Business Productivity
£402,450 £804,900 £804,900 £804,900 £804,900 £3,622,050
Benefits

Total Benefits £1,917,853 £3,879,126 £3,998,854 £4,123,371 £4,252,868 £18,172,072

Business Value
 Red Hat OpenShift ROI Analysis | 4

INVESTMENT SUMMARY
The table below contains the annual investment for both OpenShift Dedicated and/or Container Platform and
related Services. It also shows the annual costs for IT Staff time required to manage a deployment.
*Investments below are user entered values from the ROI Tool
Year 1 Year 2 Year 3 Year 4 Year 5 Total

OpenShift Dedicated £0 £0 £0 £0 £0 £0

OpenShift Container
£0 £0 £0 £0 £0 £0
Platform

Total £0 £0 £0 £0 £0 £0

Other Red Hat Services £0 £0 £0 £0 £0 £0

Number of IT FTEs to
setup, manage, support
0.0 0.0 0.0 0.0 0.0 -
and train team members
on OpenShift
Number of IT FTEs
avoided with OpenShift 0.0 0.0 0.0 0.0 0.0 -
Dedicated
Total number of IT FTEs
to setup, manage and 0.0 0.0 0.0 0.0 0.0 -
support OpenShift

IT FTE Cost to support

£0 £0 £0 £0 £0 £0
OpenShift

Other Implementation
and Support Costs for £0 £0 £0 £0 £0 £0
OpenShift

Total Costs £0 £0 £0 £0 £0 £0

Additional IT Infrastructure Cost Avoidance with Dedicated

Number of servers
migrated to the cloud
0 0 0 0 0 -
w/OpenShift –
Dedicated

Annual cost per server £2,575 £2,575 £2,575 £2,575 £2,575 -

Cost avoidance with

£0 £0 £0 £0 £0 £0
Dedicated

Adjusted Benefits £1,917,853 £3,879,126 £3,998,854 £4,123,371 £4,252,868 £18,172,072

 Red Hat OpenShift ROI Analysis | 5

£0 Investment by Year
Cost of Red Hat
OpenShift over 5
years

£0
Cost Avoidance with
Dedicated over 5
years

£0
Total Costs over 5
years
 Red Hat OpenShift ROI Analysis | 6

CASH FLOW
The cash flow table below contains the annual benefits generated by Red Hat OpenShift, the annual
investment made into the Red Hat solutions, the difference between the benefit and investment (Net Cash
Flow) and the Cumulative Net Cash Flow over the term of the analysis.

*The benefits sum, investments sum and difference (net cash flow)
Year 1 Year 2 Year 3 Year 4 Year 5 Total

Benefits £1,917,853 £3,879,126 £3,998,854 £4,123,371 £4,252,868 £18,172,072

Investment £0 £0 £0 £0 £0 £0

Net Cash Flow £1,917,853 £3,879,126 £3,998,854 £4,123,371 £4,252,868 £18,172,072

Cumulative Net Cash

£1,917,853 £5,796,979 £9,795,833 £13,919,204 £18,172,072 -
Flow

Cumulative Benefits vs. Investment

£18,172,072
Total New Cash
Flow

0%
ROI

less than 7
months
Payback Period
 Red Hat OpenShift ROI Analysis | 7

IT INFRASTRUCTURE COST REDUCTIONS

Developing on the OpenShift platform requires fewer testing and production servers due to its support of
containerization, microservices, and multitenancy, contributing to lower infrastructure costs for interviewed
organizations even as their application development efforts expand.

Before Red Hat Potential With Red Hat

OpenShift Benefit OpenShift

Number of physical servers 83 16.2% 70

Average purchase cost per physical server £12,877 £12,877

Assumed server lifespan 5.0 5.0

Total annual 5-year server costs (servers / life cycle *

£213,755 £33,480 £180,275
cost)

Annual server maintenance costs 15.0% 15.0%

Server maintenance costs (maint % * servers *

£160,316 £25,110 £135,206
purchase cost)

Virtual server annual cost savings (hosting) £9,148

Annual cost savings on other tools / platforms £75,665

Annual power cost per physical server £477 £477

Annual power costs £39,550 15.7% £33,355

Annual power cost savings (power before – power

£6,195
after from above row)

Annual facilities cost per physical server £241 £241

Annual facilities costs £20,042 15.7% £16,903

Annual facilities cost savings (facilities before vs. after

£3,139
from above row)
 Red Hat OpenShift ROI Analysis | 8

IT Infrastructure Cost Reductions Summary (*sum of above areas)

Year 1 Year 2 Year 3 Year 4 Year 5

Server Cost Savings £16,740 £16,740 £16,740 £16,740 £16,740

Server Maintenance Cost Savings £12,555 £12,555 £12,555 £12,555 £12,555

Virtual Server Cost Savings £4,574 £4,574 £4,574 £4,574 £4,574

Cost Savings on Other Tools / Platforms £37,833 £37,833 £37,833 £37,833 £37,833

Power Cost Savings £3,097 £6,195 £6,195 £6,195 £6,195

Facilities Cost Savings £1,570 £3,139 £3,139 £3,139 £3,139

Total IT Infrastructure Cost Reductions £76,369 £81,036 £81,036 £81,036 £81,036

 Red Hat OpenShift ROI Analysis | 9

IT STAFF PRODUCTIVITY BENEFITS

Application developers, including DevOps team members, deliver more applications and major features and
need less time to deliver on the OpenShift platform, meaning that they contribute substantially more value to
their organizations. In addition, applications developed on the OpenShift platform require less staff time to
manage once in production.

Before Red Hat Potential With Red Hat

OpenShift Benefit OpenShift

Application development FTEs 113 14.0% 97

Average annual fully loaded salary for application

£123,462 £123,462
developers
Total annual application development costs (FTEs *
£13,951,206 £1,975,392 £11,975,814
salary)
IT FTEs managing the infrastructure supporting
46 19.0% 37
applications
Average annual fully loaded salary for IT infrastructure
£98,265 £98,265
staff
Total annual IT infrastructure staff costs (FTE *
£4,520,209 £884,389 £3,635,820
salary)

Number of incidents per year 8 59.0% 3

Mean time to repair (MTTR) - Hours 6.5 61.0% 2.5

Annual productive IT hours lost resolving incidents 499.1 33.3% 332.7

Equivalent IT staff FTEs 0.3 49.0% 0.2

Average annual burdened salary for incident handling

£98,265 £98,265
FTEs
Total annual incident handling costs (hourly FTE cost
£29,480 £9,827 £19,653
* IT hours lost)

IT Staff Productivity Benefits Summary

Year 1 Year 2 Year 3 Year 4 Year 5

Application development savings £987,696 £2,054,408 £2,136,584 £2,222,047 £2,310,929

IT infrastructure savings £442,194 £919,764 £956,555 £994,817 £1,034,610

Incident handling savings £4,913 £10,220 £10,628 £11,054 £11,496

Total IT staff productivity gains £1,434,803 £2,984,392 £3,103,767 £3,227,918 £3,357,035

RISK MITIGATION – USER PRODUCTIVITY BENEFITS

Applications developed on the OpenShift platform experience fewer user and business-impacting outages.
 Red Hat OpenShift ROI Analysis | 10

Reducing unplanned downtime results in less revenue lost and greater productivity for employees.

Before Red Hat Potential With Red Hat

OpenShift Benefit OpenShift

Unplanned downtime incidents per year 4.8 46.2% 2.6

Mean time to repair (MTTR) - Hours 1.5 44.0% 0.8

Percentage of users impacted per downtime incident 10.0% 10.0%

Number of productive hours lost to unplanned downtime 81.0 57.0 24.0

Equivalent FTEs 0.0 70.4% 0.0

Annual unplanned downtime productivity impact

£3,856 £2,714 £1,143
(hours lost * FTE / hr)
Percentage of unplanned downtime instances revenue-
36.7% 36.7%
impacting

Revenue impact per hour unplanned downtime incident £20,391 £20,391

Annual revenue impact of unplanned downtime £53,880 71.1% £15,565

Business's operating margin 15.0% 15.0%

Annual revenue impact of unplanned downtime

£8,082 £5,747 £2,335
(incidents * % impacted * revenue $ impact)

Risk Mitigation – User Productivity Benefits Summary

Year 1 Year 2 Year 3 Year 4 Year 5

Unplanned downtime productivity savings £1,357 £2,822 £2,935 £3,053 £3,175

Revenue impact of unplanned downtime £2,873 £5,977 £6,216 £6,465 £6,723

Total risk mitigation – availability

£4,231 £8,799 £9,151 £9,517 £9,898
benefits

» Downtime values are a product of the number of hours of downtime multiplied by the number of users affected.

» The impact of unplanned downtime is quantified in terms of impaired end-user productivity and lost revenue.

» Lost productivity is a product of downtime multiplied by burdened salary.

» Lost revenue is a product of downtime multiplied by the average revenue generated per hour.
 Red Hat OpenShift ROI Analysis | 11

BUSINESS PRODUCTIVITY BENEFITS

Meeting demand for compelling and high-quality business applications and services on the OpenShift platform
leads to improved business results and enhanced employee productivity levels.

Before Red Hat Potential With Red Hat

OpenShift Benefit OpenShift
Number of new applications / major features deployed
20 20
each year
Time to stand up infrastructure and launch a typical
2.5 80.0% 0.5
application / major feature (in months)
Estimated business value of new application / major
feature per month – productivity improvements for users £20,122 £20,122
and revenue (margin) impact
Total time-to-launch opportunity cost (n apps *
£1,006,125 £804,900 £201,225
standup time * cost to stand up)

Business Productivity Benefits Summary (sum of above areas)

Year 1 Year 2 Year 3 Year 4 Year 5

Total Business Productivity Benefits £402,450 £804,900 £804,900 £804,900 £804,900

 Red Hat OpenShift ROI Analysis | 12

SOURCE
This report contains data and quotes from the IDC WhitePaper, “The Business Value of Red Hat OpenShift”,
by Carvalho and Marden, October 2016.
https://www.redhat.com/cms/managed-files/cl-business-value-of-red-hat-openshift-analyst-paper-inc0461277lw-201611-en.pdf

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