osterman research analysis - novell · 2015. 5. 11. · ©2013 osterman research, inc. 3 analysis...

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An Osterman Research Analysis

Published March 2013

sponsored by

Evaluation of a Migration from Novell GroupWise to

Microsoft Exchange or Office 365 Title

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©2013 Osterman Research, Inc. 1

Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment

EXECUTIVE SUMMARY BACKGROUND An evaluation of enterprise-messaging solutions should be based on four key decision points: • Total Cost of Ownership (TCO) • Technical review of key features and functions • The ability of the platforms to support business needs • Vendors to be considered in the analysis

We have provided this document for a typical large, GroupWise-enabled organization that has 30,000 to 50,000 users (the cost model discussed in this document was based on an organization of 44,000 users). Details on the cost model analysis that constitutes a key element of this document is included in Appendix D. KEY TAKEAWAYS • GroupWise is dramatically less expensive than either on-premise Microsoft

Exchange or Microsoft Office 365.

• GroupWise has proven to be a reliable and dependable email system in large environments, offering 99.99% uptime.

• If an organization uses GroupWise, migrating to either Exchange or Office 365

would very likely create significant business disruption following the cutover that could cost millions of dollars in lost productivity, additional training and overall disruption to its business and customer service operations.

• Although many consider Outlook on the desktop to be the best choice for a client

experience, there are two factors that decision makers should consider: a) the GroupWise client can offer largely the same “look-and-feel”, features and functions that are provided by Outlook; and b) the importance of a client installed on the desktop is becoming less important over time, particularly in an era of BYOD and greater mobility.

• The perception of value provided by third party integration with Exchange and

Office 365 is most likely greater than the actual benefit that would be derived from this integration.

• Migrating to the cloud may create additional, unforeseen problems for an

organization that currently uses GroupWise because of the need to rewrite or replace mail-enabled applications that rely on the existing GroupWise system for transport.

• Novell has a solid roadmap for continued development of GroupWise and

integration with key elements of the Microsoft stack. Moreover, Novell’s focus and viability are much stronger since its acquisition by The Attachmate Group.

WHY WORRY ABOUT THE COST OF EMAIL? Will email be supplanted by some other mode of communication, such as social media? Possibly, but email continues to be the dominant communication tool in the workplace and Osterman Research anticipates that it will be for many years to come. For example, an Osterman Research survey conducted in January 2013 found that the typical corporate email user spends 149 minutes per day doing something in email – sending or receiving messages, looking for content, managing tasks, managing contacts, etc. That translates to approximately 30% of an eight-hour workday. Moreover, time spent in email is much greater than time spent using other communication tools, such as the telephone (66 minutes per day), instant messaging or other real-time communications (29 minutes) and social media (10 minutes).

Novell has a solid roadmap for continued development of GroupWise and integration with key elements of the Microsoft stack.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment Time Spent in Various Tools During a Typical Workday

For all intents and purposes, email is a utility in the modern enterprise as vital as electricity or plumbing – organizations cannot operate efficiently without it. Consequently, while email is essential to the operation of any organization and the efficiency of its employees, its cost should be driven as low as possible, provided that any cost savings don’t come at the expense of functionality, security, data governance, or other business imperatives. However, email is generally not a trivial expense in most organizations. The initial cost to deploy an email system can be several hundred dollars per user, and the ongoing cost can be anywhere from $10 to $50+ per user per month depending on the number of users, the number of applications that are integrated with email, the geographic distribution of the employees served, the amount of IT staff time required to manage the system, and other factors.

WHY IT’S SMART TO CONSIDER EXCHANGE AND THE MICROSOFT STACK A decision to consider Microsoft Exchange or Office 365 as a replacement for Novell GroupWise is not without merit. Among the reasons that Osterman Research believes considering Exchange is a wise move include the following: • Exchange is the dominant email system currently in use with more than 170

million seats worldwide. • Originally introduced in 1996 with Exchange 4.0, Microsoft continues to develop

Exchange and is now entering its eighth major iteration of the platform (Exchange 2013).

• Microsoft continues to add new features and capabilities to Exchange, such as

unified messaging and a significant increase in the size of the mail database, introduced in Exchange 2007; database availability groups, limited archiving and failure detection, introduced in Exchange 2010; and offline support in Outlook Web Access and basic DLP capabilities, to be introduced in Exchange 2013.

For all intents and purposes, email is a utility in the modern enterprise as vital as electricity or plumbing – organizations cannot operate efficiently without it.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment However, Osterman Research’s analysis of the archiving capabilities in Exchange

2010, while sound, in many cases still necessitate the use of third-party archiving capabilities in order to achieve true enterprise-grade archivingi. Similarly, the DLP capabilities to be introduced in Exchange 2013 may also be limited and may have to be supplemented by third party vendors, as well.

• The Outlook client is widely deployed and familiar to a large proportion of

information workers in the US workforce. In fact, Microsoft has – intentionally or not – made “Outlook” synonymous with “corporate email” in the minds of many decision makers. Many have seriously considered migration to Exchange based on little more than their desire for the familiarity of the Outlook interface.

• The Microsoft Office suite, which also has a dominant position on the desktop,

has been designed to work with Exchange, SharePoint and other Microsoft offerings.

• As is the norm in the software industry, many third party software developers

have opted to integrate their solutions with Exchange given its dominant market share. Microsoft itself has been able to leverage SharePoint, SQL Server and other parts of its technology platform to create synergy with Exchange.

• Office 365, while still in its relative infancy in the cloud-based messaging market

and a distant second to Google Apps in terms of number of seats deployed, will be one of the leading cloud-based messaging platforms in coming years.

In short, Microsoft has done a good job of developing and enhancing Exchange over the years, it has created a familiar and relatively easy to use desktop experience for most users, and it is a force with which to be reckoned in the cloud email market. Consequently, decision makers are wise in making Exchange part of their due diligence efforts in planning their long term messaging and related capabilities.

WHY IT’S SMARTER TO STAY WITH GROUPWISE Although Osterman Research believes that Microsoft Exchange, Outlook, Office 365 and the rest of the Microsoft stack should be considered for deployment within large enterprises, we also believe that the better decision will be to stay with Novell GroupWise for the reasons discussed below. GROUPWISE IS DRAMATICALLY LESS EXPENSIVE Osterman Research’s cost model (details of which are provided in Appendix D of this document) clearly demonstrates that GroupWise is significantly less expensive than either Microsoft Exchange deployed using on-premise infrastructure or Microsoft Office 365. As shown in the following figure and table, the three-year cost of ownership for GroupWise is $10.45-$11.62 per seat per month compared to $43.71 for on-premise Exchange and $47.07 for Office 365. This makes GroupWise 73% to 76% less expensive than on-premise Exchange, and 75% to 78% less expensive than Office 365.

Decision makers are wise in making Exchange part of their due diligence efforts in planning their long term messaging and related capab-ilities draft.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment Cost of Messaging Systems, Per User Per Month, for 44,000 Users

Based on deployment from scratch

Cost of Messaging Systems to Support 44,000 Users Based on deployment from scratch

GroupWise (Windows)

GroupWise (Linux)

Exchange (on-prem) Office 365

Three-year TCO $18,398,812 $16,559,272 $69,241,726 $74,562,393 Savings compared to Exchange (on-premise)

$50,842,914 (73%)

$52,682,454 (76%)

Savings compared to Office 365

$56,163,581 (75%)

$58,003,121 (78%)

MIGRATING TO A NEW MESSAGING PLATFORM CAN CREATE SIGNIFICANT DISRUPTION Another critical expense – and one that many IT departments consider from time to time – is migrating from one on-premise email system to another. While many decision makers are eager to migrate to another system to gain additional capabilities or because they perceive one vendor’s roadmap to be more appealing than another’s, they should take into account the major initial expense involved in doing so, as well as the ongoing costs they might incur as a result. This is a very difficult decision to undertake during trying economic times, when IT departments attempt to balance the improved efficiency that might be available in a new email system with the economic reality of a static or shrinking IT budget that would be used to pay for it. It is also important to note that while upgrades from one version of a vendor’s email system to another can be expensive, migrating from one vendor to a different one can be much more expensive. These costs are driven not only by the major impact that such a migration has on IT, but more importantly on the changes in processes, the additional training and the other impacts on end users, and the cost of migrating email-enabled applications to the new platform. Migrating from one vendor’s email platform to another should be driven by significant and compelling issues.

Another critical expense – and one that many IT departments consider from time to time – is migrating from one on-premise email system to another.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment The migration to a new messaging system can create significant business disruption

owing to a number of factors: • Requirements for IT administrator training that will require at least several days

of off-site classroom training, not to mention that newly trained administrators will need to become proficient in Exchange over several months following the formal training program before they can manage it efficiently.

• End user training will also be required for users to become proficient in the use

of Outlook. For example, one very large organization that we studied as part of this project migrated 60,000+ users from GroupWise to Exchange. While the organization considered its end user training process to be quite satisfactory, it still required a substantial amount of effort:

o A series of videos were created for users to view to learn the key functions

and features of Outlook.

o The organization procured a set of tri-fold training cards for distribution to users.

o Each department sent one or two staff members to training classes that

were offered in-house. On the day of the cutover, these individuals wore large yellow buttons labeled “Ask me about Outlook” and were made available to answer users’ questions.

o The organization established an “Expert Bar” in the lobby of each building

staffed with IT staff members. An escalation path was established for these experts and additional phone support staff was deployed.

• Even in the best of situations, there will be an additional amount of downtime in

the new email system as users are cut over to the new platform – this disruption can be substantial in many cases. For example, Novell’s analysis reveals that for a 50,000 seat environment, the disruption can cost an organization as much as $475 per user.

• There will also be other costs associated with the migration, including consulting

services, possibly cloud-based services of various types, and additional IT staff time to address problems that will inevitably arise.

LONG-TERM HELP DESK COSTS CAN INCREASE SIGNIFICANTLY It is also important to consider that a migration to a new messaging platform can result in higher help desk costs on a long-term basis. We spoke with a large US university that migrated 3,000 staff mailboxes and 57,000 student mailboxes from a mixed environment of GroupWise, Sun Webmail and Communigate to Exchange. The staff members were migrated to on-premise Exchange, while the students were migrated to Office 365. Before the migration, the help desk staff received an average of 10 requests per day. Following the migration, this figure increased to an average of 32 help desk tickets per day. By contrast, the health services organization (HSC) at the university has 9,000 users on GroupWise and averages only five help desk tickets per day. If we assume that the average cost of resolving a help desk ticket is $25ii, the increase in the number of help desk tickets – from 10 to 32 – will cost the university slightly more than $200,000 annually (22 tickets x 365 days/year x $25), or $3.35 per user per year. The problems reported to the help desk after the migration included the following, all of which have impacted multiple users:

Even in the best of situations, there will be an additional amount of downtime in the new email system as users are cut over to the new platform – this disruption can be substantial in many cases.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment • Calendar alarms/notifications are not working when set or else not migrated at

all. • Calendar tasks and notes did not migrate. • Sent items show the sender as the recipient instead of the actual recipient(s). • Users are unable to email from a calendar event. • Users are unable to drag attachments from one email to another, instead having

to save attachments and then attach them to a new email. • When the creator of a calendar event modifies the calendar event, recipients do

not receive changes (this is a known behavior of migrated calendar events). The tickets that were still open 60 days after the migration included the following: • HSC users (on GroupWise) are not receiving mail from main campus users (on

Exchange).

• Main campus users are not receiving mail from HSC users because email is going directly to a spam quarantine.

• When mailing from HSC to the main campus, main campus users’ email address

is altered. Replies to the altered address cannot be resolved and email is returned to the sender without having reached the recipient.

• Some users have had hundreds of duplicate e-mails/appointments/contacts in

their mailbox immediately following the migration. Some of the help desk phone agents asked users to go through their mailbox and delete the duplicates manually.

• There have been “forgotten” groups of users: users who “reclaimed” a NetID

that was marked for deletion did not set off a migration trigger.

THE VALUE OF INTEGRATION IS OFTEN OVERSTATED It is also important to note that while a large number of third-party software vendors integrate their solutions with Exchange – and, frankly, a larger number of vendors integrate with Exchange than do so with GroupWise – there are four important considerations when evaluating the potential for integration: • Integration with third party tools is not widely implemented, but instead tends to

be focused on a relatively small number of applications. • Integration is typically not critical to core business processes. While integration

can be tied to some of these processes, more often it is not. Where integration is a critical requirement, quite often connectors or custom software development can satisfy the need for integration with third-party tools.

• Most users do not benefit from the integration of the primary messaging

platform with third party tools because of the relatively small number of applications that become integrated.

• Even if integrations are implemented, many – if not most – users typically do not

employ them because of habit and their reliance on traditional work processes. That said, the GroupWise client does provide a robust level of integration at the client level. For example, GroupWise integrates with SAP, account lookup capabilities, Google maps, training videos, various personal applications, etc.

Most users do not benefit from the integration of the primary messaging platform with third party tools because of the relatively small number of applications that become integrated.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment THE IMPORTANCE OF THE OUTLOOK “LOOK-AND-FEEL” IS

OFTEN OVERSTATED Although much is often made of the importance of the Outlook client’s “look-and-feel”, this is a highly subjective issue that may or may not be materially relevant to maintaining user productivity. Although Outlook is considered by some to have a more polished look-and-feel than the GroupWise client, the latter can be configured to more or less mimic the user experience in Outlook. In addition, there are a variety of features that users lose when they migrate from GroupWise to Exchange/Outlook 2010. These features are documented at http://www.novell.com/docrep/2012/05/gw_vs_ms_exchange_comparison_chart.pdf. It is also important to note that changing the desktop client can be very disruptive, since even small changes to the way that users do their jobs can generate a significant increase in help desk calls, as well as informal requests for help from departmental “gurus” who become the de facto “help desk” for users in their sphere of influence. Osterman Research has conducted research on the importance of the desktop in making email migration decisions. For example, in a survey of mid-sized and large organizations in North America we found that if the desktop client had to be switched, only 16% of respondents indicated that their organization would likely or definitely switch to the new messaging platform. However, if the desktop client could be retained and only the backend of the messaging system was swapped, that figure jumped to 43% – a difference of 160%. Another important consideration in evaluating Outlook is that there is not “an” Outlook look-and-feel, but instead several different ones. Because Outlook has evolved over the years with each new iteration, Microsoft has changed the look-and-feel of Outlook – sometimes substantially – from one version to another. For example: • The Outlook client prior to Outlook 2007 did not use a ribbon interface. Outlook

2007 introduced the ribbon in some views, but in Outlook 2010 used the ribbon interface in all views.

• In Outlook 2007, Microsoft switched from Internet Explorer HTML rendering to

Microsoft Word HTML rendering. • Examples of the substantial differences in look-and-feel between Outlook

versions is shown at the following URLsiii:

o Outlook 2010 http://ptihosting.com/blog/wp-content/uploads/2009/11/Outlook2010ScreenShot.png

o Outlook 2003 http://www.liventerprise.com/images/screenshots/MS_Outlook.jpg

Another important consideration in the context of requiring the Outlook experience is that this requirement is actually dwindling over time. For example, there are a number of alternatives to the “thick” Outlook client – i.e., a software client installed on the desktop – including Mozilla Thunderbird, Zimbra Desktop, Claws Mail, eM Client, Opera Mail and several others that provide an experience quite comparable to that offered in Outlook. Moreover, many IT departments are opting not to deploy a thick client because a Webmail interface is easier and less expensive to support. In fact, Microsoft stopped offering the Outlook client license with the Exchange Client Access License (CAL) after Exchange Server 2003. Some vendors have followed suit and will offer a Webmail alternative that is supported as the primary interface to the mail system.

Another important consideration in evaluating Outlook is that there is not “an” Outlook look-and-feel, but instead several different ones.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment For example, Zimbra is the third largest business email system in terms of the

number of paid seats it supports (~85 million) and offers only a Web interface in its most recent iteration of the platform, Zimbra 8. Although the Zimbra 7 Desktop client can be used with Zimbra 8, the company has no plans to introduce a Zimbra 8 Desktop client and is actually waiting for the next major iteration of its platform to finalize its desktop strategy. Similarly, Google Apps focuses on its Web interface as the primary means of accessing email, calendars, tasks, etc. Although the company recently acquired Sparrow, an innovative thick client for the Mac and iPhone platforms, Google’s primary focus is on its Web interface. The bottom line is that the Outlook experience is important to a point, but this is changing because of the lower cost of not providing a desktop client and the growing number of Outlook alternatives that provide a comparable look-and-feel and, in some cases, offer additional functionality that is not available in Outlook. FEATURES AND FUNCTIONS IN GROUPWISE LARGELY MATCH THOSE OF EXCHANGE/OUTLOOK Unified messaging/communication and other add-on capabilities can be integrated into GroupWise through the use of various third party solutions. Although not native to GroupWise, these capabilities provide the same level of features and functions as those available in Exchange. For example, GroupWise also integrates with Office (although not as tightly as Microsoft), Vibe, CRM solutions (via third party tools), etc. Moreover, GroupWise offers a number of features not available with Exchange, such as single-instance storage for attachments and the ability to perform in-place upgrades. For end users, the GroupWise client offers a number of features not available with Outlook, including silent email retraction, built-in instant messaging, external free/busy search with email systems from other vendors, the ability to add panels to the “Home” view, the ability to view attachments natively, and full proxy capabilities in the Web client. A detailed list of features and functions in GroupWise and Exchange/Outlook is available in Appendix A of this document.

SECURITY IN A HIGHLY REGULATED ENVIRONMENT Exchange security requires that an administrator have full access to every item in the database, including every mailbox item for every user. Even when a user has set explicit block permissions in their mailbox, any user that has been designated as an admin will be able to “proxy” into that user’s mailbox and have complete access to everything it contains. Because of the way the Outlook client works, users are able to read messages and open attachments from the “Preview Pane” without ever marking a message as read. The combination of these two aspects will allow any Exchange user with admin privileges to access any item in any mailbox at any time, and the owner of the content will never know this has occurred.

This design is particularly risky in environments that are forced to adhere to strict regulatory requirements like Health Insurance Portability and Accountability Act of 1996 (HIPAA), Sarbanes-Oxley, and the like. GroupWise is specifically built not to allow this kind of access or functionality of allowing the reading of messages without marking them as read. In the event that a GroupWise administrator requires access to a user’s mailbox, he or she would need to either change the user’s password (to log in as that user, leaving the password different from the user’s setting) or explicitly ask the user to grant proxy rights to their mailbox for the admin. CONSIDERING THE CLOUD The cost of an email system is an important consideration for several reasons, not least of which are the disparity in costs between leading platforms and the large proportion of the typical IT budget that is devoted to deploying, managing and upgrading email. However, equally important is a serious consideration of the value of an email system in addition to its cost – what we call the Total Value of Ownership

GroupWise offers a number of features not available with Exchange, such as single-instance storage for attachments and the ability to perform in-place upgrades.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment (TVO). For example when considering a migration to a cloud-based email system, it

is essential to view the decision holistically by asking a number of questions: • How many email-enabled applications are currently tied to the on-premise email

system? • What would it cost to re-write and test these applications for use with the new

platform? • Are there regulatory or legal issues focused on data governance that would

either prevent migration from an on-premise system to a cloud-based one, or at the least make such a migration very expensive?

• What are the consequences of relying on the cloud as the primary email system

supported by offline capabilities, versus the more traditional model of offline as the primary supported by the cloud?

• What will be the potentially difficult-to-quantify impact on user productivity by

losing features that are not available in a cloud-based email system? These features might include things like message tracking that gives senders the ability to track message opens and replies without the need for a follow-up email or phone call, the ability to retract emails that were sent in error, or proxy capabilities for specific parts of a user’s mailbox.

• Additional cost for storage, mobility, archiving, and bypassing limits on messages

sent per day, attachment size, recipients per message, etc. • What is the average uptime of the solution being considered compared to the

current, on-premise environment? For example, a difference in uptime of just 0.1% is the equivalent of 44 minutes of downtime per month. An interesting analysis from The International Working Group on Cloud Computing found that the 13 major cloud email providers experience, on average, roughly 7.5 hours of downtime annually, or 37.5 minutes of downtime per month. The cost to user productivity? More than $71.7 millioniv.

NOVELL AND THE ATTACHMATE GROUP ARE HERE FOR THE LONG HAUL During the past few years, some have questioned Novell’s financial viability and its ability to support continued development of GroupWise and a robust collaboration roadmap. However, Novell’s 2010 acquisition by The Attachmate Group for $2.2 billion has largely settled the issue. For example, consider the following: • The Attachmate Group includes four companies: Novell, Attachmate, NetIQ and

SUSE, all viable and robust companies in their own right. Novell generates the majority of revenues in this group.

• The Attachmate Group has four principal investors – Francisco Partners, Golden

Gate Capital, Elliott Management and Thoma Bravo – all of which are leading investment companies that, combined, have more than $38 billion in capital under management.

• The Attachmate Group serves 80% of the Fortune 500 and Global 2000 and has

more than 13 million users worldwide.

• GroupWise continues to have a strong base of customers. • Novell has increased engineering resources by 33% since the acquisition.

• Novell has a solid roadmap for messaging and collaboration and continues to

integrate with a growing number of leading third-party tools and platforms.

Novell has increased engineering resources by 33% since the acquisition. Novell has a solid roadmap for messaging and collaboration and continues to integrate with a growing number of leading third-party tools and platforms.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment Future innovations include Novell Messenger (Dillon), the new version of

GroupWise (Windermere), Novell Data Synchronizer (Eenou and Black Forest), and new versions of Vibe (Hudson and Inverness).

• Finally, Novell customers benefit from what Osterman Research considers to be a

“rightsized” company: one that is large enough to fund continued innovation and an aggressive roadmap of new messaging and collaboration features, but one that is small enough to provide the kind of personalized attention that its larger customers require.

TESTING DIFFERENT TCO SCENARIOS Osterman Research offers the cost data above to illustrate what we believe will be the actual TCO for GroupWise on Windows or Linux compared to on-premise Exchange or Office 365. However, we wanted to test various possible scenarios to determine how much less expensive the latter two platforms might be under different deployment or use-case scenarios. Consequently, this section focuses on various “what-if” scenarios that demonstrate the cost deltas for on-premise Exchange or Office 365 relative to GroupWise – if certain variables were to be eliminated. It is important to note that we do not believe that these scenarios – all of which benefit Exchange on-premise and Office 365 – will actually occur. For example, we do not believe that Microsoft will reduce the cost of Office 365 E2 by 88% (the most aggressive pricing of which we are aware is Microsoft’s reduction of its $20 per month E3 package to $3 to $7 per month), or that Exchange and Office 365 IT labor support could be halved. However, we wanted to determine the price differences for Microsoft’s offerings in a “best possible case” set of scenarios. Also important to note is that even if all of these scenarios were to occur simultaneously, GroupWise would still be significantly less expensive than either Exchange on-premise or Office 365. To develop these scenarios, as well as all of the cost data in this report, Osterman Research developed a detailed cost model that analyzes the TCO for GroupWise on Windows, GroupWise on Linux, on-premise Exchange and Office 365. The model is highly customizable, allowing detailed modeling of various scenarios using different costs for servers, licensing, labor and all of the other cost elements that would go into an analysis of the TCO for each system. We have not used a “black box” approach in the model, instead opting to display each and every cost associated with all four systems in order to provide an objective comparison of all four messaging platforms. In addition, various cost elements, such as migration and mobility, can be excluded from the analysis if needed.

Novell customers benefit from what Osterman Research considers to be a “rightsized” company: one that is large enough to fund continued innovation and an aggressive roadmap of new messaging and collaboration features, but one that is small enough to provide the kind of personalized attention that its larger customers require.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment SCENARIO 1

IF THE OFFICE 365 MONTHLY FEE COULD BE REDUCED FROM $8.00 PER SEAT TO $1.00 PER SEAT In this scenario, we opted to test the impact of dramatically reducing the cost of Office 365, assuming Microsoft might offer a substantial inducement to deploy Office 365 – in this case, a discount of 87.5%. As shown in the following figure, this discount would significantly reduce the cost of Office 365, but would still make it much more expensive than either GroupWise option and only slightly less expensive than on-premise Exchange. Cost of Messaging Systems, Per User Per Month, for 44,000 Users Based on reducing the Office 365 monthly fee from $8.00 to $1.00 per seat

Total Cost of Ownership over three years in this scenario: GroupWise (Windows) $18.4 million GroupWise (Linux) $16.6 million Microsoft Exchange (on-premise) $69.2 million Microsoft Office 365 $63.5 million

Scenario 1 TCO GroupWise $16.6-$18.4 million Microsoft $63.5-$69.2 million



IF MICROSOFT PROVIDED THE OUTLOOK CLIENT AT NO CHARGE The cost model assumes that the cost of the Outlook client will be $100 per seat. Eliminating this one-time, up-front charge will reduce the cost of both Microsoft options by $2.78 per seat per month, as shown in the following figure. Cost of Messaging Systems, Per User Per Month, for 44,000 Users Based on Microsoft’s provision of the Outlook client at no charge





IF EXCHANGE AND OFFICE 365 IT LABOR COULD BE REDUCED BY 50% Exchange will require substantially more IT administration labor than GroupWise based on research that Osterman Research has conducted recently with mid-sized and large organizations. However, we wanted to test the impact of cutting the Exchange and Office 365 administration requirement by 50%. As shown in the following figure, even reducing Exchange and Office 365 administration labor by one-half will have little impact on the overall TCO of either solution. Cost of Messaging Systems, Per User Per Month, for 44,000 Users Based on reducing Exchange and Office 365 IT labor by 50%





IF THE MIGRATION TO EXCHANGE OR OFFICE 365 COULD BE ACCOMPLISHED WITH NO COST OR USER DISRUPTION As discussed earlier in this document, there will be a significant cost in migrating from GroupWise to either on-premise Exchange or Office 365 as a result of the significant disruption, training and other issues that will arise directly from the migration itself. However, we wanted to test the impact of migration on the overall TCO for both Microsoft options. As shown in the following figure, although the TCO associated with on-premise Exchange and Office 365 will fall substantially if the migration costs are not factored in, both Microsoft solutions will still be substantially more expensive than either GroupWise solution. Cost of Messaging Systems, Per User Per Month, for 44,000 Users Based on migrating to Exchange or Office 365 with no cost or user disruption





IF EXCHANGE AND OFFICE 365 WERE AS RELIABLE AS GROUPWISE One of the strengths of GroupWise for the vast majority of its customers is its very high level of uptime. Although on-premise Exchange and Office 365 generally experience higher levels of downtime than GroupWise, we wanted to test the impact of reducing Exchange and Office 365 downtime to the levels experienced with GroupWise. We found that the impact on the overall TCO for both Microsoft solutions would be substantial, but would still leave GroupWise significantly less expensive, as shown in the following figure. Cost of Messaging Systems, Per User Per Month, for 44,000 Users Based on Exchange and Office 365 matching the reliability/uptime of GroupWise





KEY QUESTIONS TO CONSIDER In addition to the quantitative analysis that must be part of the due diligence associated with considering a migration to on-premise Exchange or Office 365, there are several other questions that should be addressed by decision makers considering a migration to a new messaging system. Although these issues are more qualitative in nature, they should be an essential component of the thought process in considering the migration: • Can the organization afford a migration at this time?

Organizations in a wide range of industries are facing a variety of financial difficulties because of recent changes in regulatory legislation, changes in eDiscovery requirements and other factors. Given these budgetary pressures, can even a large organization afford a migration that might cost more than $50 million over the first three years after a new solution is fully deployed?

• Will the migration be worth the additional perceived value of the

Outlook experience? Although there is substantial pressure to adopt the Outlook experience within many organizations, will the change be worth the effort required to achieve it? While there are perceived benefits associated with using Outlook as the primary interface to email, calendaring, task management and other capabilities, will the significant expense for IT, help desk and end users be worth the cost to do so? Quite often, Novell finds that users employ GroupWise in the same manner as they always have because Novell does not remove features when the company builds new and innovative user interfaces. The result is that users do not experience the new user interface, typically because they default to old, familiar work habits. It is important to note that GroupWise has provided a new user interface that is similar to that of Outlook by implementing the “Home View”. Experience has demonstrated that once users have been trained on the new interface enhancements, they become quite comfortable and more satisfied with the GroupWise client.

• Will integration actually be used? To what extent will the integration with third-party tools actually be used? Among those that will be able to take advantage of the integration, how many people will be positively impacted by it? Will the gain in productivity or other benefits be worth the cost to achieve it?

• What are the problems associated with migrating to a cloud provider?

If an organization opts to migrate to Office 365, have the risks associated with the migration been fully considered? For example, a few years ago the CIO of a leading pharmaceuticals company was impressed with BPOS – aided by a personal visit from Steve Ballmer – and decided to migrate the company’s many thousands of email users to the cloud. However, the decision was made before the review, input or approval by any of the company’s IT architects. After their review was completed, the company concluded that more than one-half of its key requirements could not be satisfied by BPOS, and so the migration of email was put on hold.

• What are the risks associated with migrating to a cloud provider?

Among the risks associated with a migration to the cloud are potential violations of data breach notification laws. These laws require holders of sensitive information to establish processes for monitoring and reviewing databases and other electronic sources of information so that the location of sensitive data can be determined. Moreover, these statutes require that any holder of sensitive information create processes to notify those whose data has been compromised. By no means do we mean to imply that a migration to Office 365 would

Can even a large organization afford a migration that might cost more than $50 million over the first three years after a new solution is fully deployed?


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment necessarily result in these kinds of violations. In fact, to Microsoft’s credit, Office

365 was the first cloud provider to become HIPAA compliant, an important requirement for healthcare and related organizations. However, it is important to note that the Microsoft Online Subscription Agreement Amendment for HIPAA and HITECH Act states that “Microsoft does not act as, or have the obligations of, a business associate under HIPAA with respect to Customer Data once it is sent to or from Covered Entity outside the Microsoft Online service over the public Internet.v”

• Is spending $50 million or more on a migration the best use of limited corporate funds? Finally, is the substantial expenditure required to migrate to a new platform the best use of any organization’s constrained financial resources? Obviously, this is a decision that will need to be made on a case-by-case basis, but it should be an important part of the decision process.

RECOMMENDATIONS Without equivocation (based on the information available to us at the time this report was produced), Osterman Research believes that most GroupWise-enabled organizations should not replace their GroupWise system with either on-premise Microsoft Exchange or Microsoft Office 365. While some may doubt our objectivity in making this recommendation because Novell has hired us to produce this document, our recommendation is based on solid analysis of the following factors: • Cost

GroupWise offers a much lower cost of ownership than either on-premise Exchange or Office 365. Even if an organization were to start from scratch with a new deployment of GroupWise, and even if every cost impediment to the deployment of Exchange or Office 365 were removed, GroupWise is still less expensive than either alternative.

• Reliability

GroupWise is a solid and reliable email system that has served most of its customers well for many years. It is worth emphasizing that most GroupWise-enabled organizations have experienced 99.99% or similar uptime – a level of reliability that the organization is unlikely to achieve after a migration to either on-premise Exchange or Office 365.

• Similar functionality

While Exchange and Office 365 both provide robust functionality, the differences between the functionality offered by these platforms and GroupWise are not sufficient to warrant replacement of the GroupWise infrastructure. Moreover, the perceived advantages of Exchange or Office 365 integration with third party offerings is unlikely to return significant business value. Similarly, the perceived benefit of migrating to Outlook is not likely to measurably increase productivity or business success. The importance of the thick client is decreasing over time and will be even less of a decision factor in the future.

• Eliminating business disruption during migration

Staying with GroupWise will avoid the inevitable disruption to end users, IT staff and business operations that will result from a migration from one vendor’s email system to another.

• Novell is a solid vendor

Although Novell has been perceived as more “risky” than Microsoft in the context of its long-term roadmap and financial viability, Microsoft no longer enjoys that advantage since the acquisition of Novell by The Attachmate Group. Moreover, Novell has a solid roadmap for new features in GroupWise, integration with key

It is worth emphasizing that most GroupWise-enabled organizations have experienced 99.99% or similar uptime – a level of reliability that the organization is unlikely to achieve after a migration to either on-premise Exchange or Office 365.


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment elements of the Microsoft stack, and new collaboration tools. The latest details

on Novell’s collaboration roadmap are available at www.novell.com/gwroadmap. • There are risks associated with migration to the cloud

Although Office 365 is a robust offering, any cloud provider can provide an additional layer of risk in the context of potential data breaches and loss of control over how data is managed. This is particularly important for highly regulated organizations and those that manage large quantities of sensitive and confidential information.

ABOUT OSTERMAN RESEARCH Osterman Research helps vendors, IT departments and other organizations make better decisions through the acquisition and application of relevant, accurate and timely data on markets, market trends, products and technologies. We also help vendors of technology-oriented products and services to understand the needs of their current and prospective customers. Osterman Research provides timely and accurate international market research, cost data, cost models, benchmarking information and other services to technology-based companies. We do this by continually gathering information from IT decision-makers and end-users of information technology. We analyze and report this information to help companies develop and improve the products and services they offer to these markets or to internal customers. Osterman Research has developed numerous cost models that compare and contrast the cost of various messaging solutions, including hosted/managed versus on-premise solutions. Among the things that make Osterman Research unique is our market research panel: a large and growing group of IT professionals and end-users around the world with whom we conduct our research surveys. This allows us to conduct surveys quickly and accurately with very high response rates. We are continually developing our panel of IT professionals and end-users into one of the leading sources of information for companies that offer products and services in the IT space. More information is available at: Tel +1 253 660 5839 Fax +1 253 458 0934 Email [email protected] Web http://www.ostermanresearch.com Twitter @mosterman

Although Office 365 is a robust offering, any cloud provider can provide an additional layer of risk in the context of potential data breaches and loss of control over how data is managed.



APPENDIX A COST MODEL DETAILS The data below are based on the following assumptions: • Provision of each platform to 44,000 users (for purposes of this analysis, we

have assumed that all four platforms will be deployed from scratch). • We have assumed that five percent of email users are also provisioned with a

company-supplied mobile device. • The Office 365 solution is assumed to be Plan E2.

GroupWise (Windows)

GroupWise (Linux)

Microsoft Exchange

(on-premise)

Microsoft Office 365

U P - F R O N T C O S T S

HARDWARE Servers, email and instant Messaging

$115,880 $115,880 $202,790 $0

Support, email and instant messaging hardware

$24,000 $24,000 $42,000 $0

SOFTWARE

Server software, email $0 $0 $111,972 $0

Server software, instant Messaging

$0 $0 $7,998 $0

Client access licenses (CALs), email

$6,292,000 $6,292,000 $3,859,680 $0

Windows Server or SLES $79,980 $0 $119,970 $0

Server OS CALs $1,759,560 $0 $1,759,560 $0

BlackBerry Enterprise Server $0 $0 $37,885 $0

Email clients $0 $0 $4,400,000 $4,400,000

MIGRATION COSTS

Hardware $0 $0 $0 $0

Admin time $0 $0 $151,388 $44,000

Administrative staff training $0 $0 $43,432 $0

End user training $0 $0 $2,388,760 $2,388,760

Business disruption $0 $0 $20,900,000 $20,900,000

Consulting $0 $0 $330,000 $0

R E C U R R I N G C O S T S A N D C L O U D - B A S E D S E R V I C E S

LABOR

Year 1 $454,858 $454,858 $2,653,920 $363,534

Year 2 $468,503 $468,503 $2,733,537 $374,440

Year 3 $482,558 $482,558 $2,815,543 $385,673

DOWNTIME

Year 1 $460,731 $460,731 $4,712,019 $3,141,346

Year 2 $474,553 $474,553 $4,853,380 $3,235,587

Year 3 $488,789 $488,789 $4,998,981 $3,332,654



GroupWise (Windows)

GroupWise (Linux)

Microsoft Exchange

(on-premise)

Microsoft Office 365

EMAIL HOSTING FEES

Year 1 $0 $0 $0 $4,224,000

Year 2 $0 $0 $0 $4,224,000

Year 3 $0 $0 $0 $4,224,000

SOFTWARE MAINTENANCE

Year 1 $1,422,667 $1,422,667 $1,540,000 $0

Year 2 $1,422,667 $1,422,667 $1,547,577 $0

Year 3 $1,422,667 $1,422,667 $1,547,577 $0

ANTI-VIRUS AND ANTI-SPAM FILTERING

Year 1 $59,400 $59,400 $219,797 $924,000

Year 2 $59,400 $59,400 $0 $924,000

Year 3 $59,400 $59,400 $0 $924,000

ARCHIVING

Year 1 $950,400 $950,400 $1,584,000 $1,584,000

Year 2 $950,400 $950,400 $1,584,000 $1,584,000

Year 3 $950,400 $950,400 $1,584,000 $1,584,000

MOBILITY, BLACKBERRY DEVICES

Year 1 $0 $0 $240,000 $240,000

Year 2 $0 $0 $240,000 $240,000

Year 3 $0 $0 $240,000 $240,000

MOBILITY, NON-BLACKBERRY DEVICES

Year 1 $0 $0 $10,800 $10,800

Year 2 $0 $0 $10,800 $10,800

Year 3 $0 $0 $10,800 $10,800

REAL-TIME COMMUNICATIONS/INSTANT MESSAGING

Year 1 $0 $0 $1,759,560 $5,016,000

Year 2 $0 $0 $0 $5,016,000

Year 3 $0 $0 $0 $5,016,000

TOTALS

Year 1 $11,619,475 $9,779,935 $47,075,530 $43,236,440

Year 2 $3,375,523 $3,375,523 $10,969,294 $15,608,826

Year 3 $3,403,814 $3,403,814 $11,196,901 $15,717,127

TCO

Total, three-year $18,398,812 $16,559,272 $69,241,726 $74,562,393

Total, average annual $6,132,937 $5,519,757 $23,080,575 $24,854,131

Per user, three-year $418.15 $376.35 $1,573.68 $1,694.60

Per user, annual $139.38 $125.45 $524.56 $564.87

Per user, monthly $11.62 $10.45 $43.71 $47.07


Analysis of the TCO for GroupWise, Exchange and Office 365 in a Large Environment © 2013 Osterman Research, Inc. All rights reserved.

No part of this document may be reproduced in any form by any means, nor may it be distributed without the permission of Osterman Research, Inc., nor may it be resold or distributed by any entity other than Osterman Research, Inc., without prior written authorization of Osterman Research, Inc. Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes legal advice, nor shall this document or any software product or other offering referenced herein serve as a substitute for the reader’s compliance with any laws (including but not limited to any act, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively, “Laws”)) referenced in this document. If necessary, the reader should consult with competent legal counsel regarding any Laws referenced herein. Osterman Research, Inc. makes no representation or warranty regarding the completeness or accuracy of the information contained in this document. THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR IMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE ILLEGAL.

CITATIONS

i Why Third Party Archiving is Still Necessary in Exchange 2010 (http://www.ostermanresearch.com/whitepapers/orwp_0161.pdf) ii http://thecontentwrangler.com/2011/04/28/industry-average-help-desk-support-costs/ iii We have not included the screen shots in this document in order to comply with Microsoft requirements for appropriate use of these images. iv http://www.wired.com/cloudline/2012/06/cloud-downtime-cost/ v Section 3(b)(iii)(2)

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