Disclaimer

The financial metrics presented in this Excel calculator are for example purposes only. These metrics
represent estimates used by Microsoft Academy in developing a cash flow and return on investment
analysis for purposes of this white paper. The cost categories for calculating total cost of ownership (TCO)
metrics conform to commonly used categories for TCO analysis. The direct and indirect cost categories
have been modified to meet the specific needs of developing a cash flow model for assessing the financial
value of a video podcasting portal such as Microsoft Academy. Users may need to modify the cost
categories to meet the specific and unique circumstances of their own organization. Results from using
this cash flow and TCO calculator will vary based on the organization’s specific and unique circumstance.
This calculator is provided “as-is,” and Microsoft does not make any warranties, express or implied, with
respect to the calculator. This calculator is provided for informational purposes only, and nothing
contained in this calculator or in the attached white paper is intended to constitute professional, legal or
financial advice. Use of the calculator is at the user’s own risk, and the user is solely responsible for its use
of or reliance on any results, estimated, projected or actual, obtained using the calculator.
© 2010 Microsoft Corporation. All right reserved.
 Year 1 TCO Life % of
Direct Costs Pilot
Year 2 Year 3
Cycle Total Cost

Hardware
Server $ 18,000 $ 18,000 $ - $ 36,000
Peripherals $ 5,000 $ - $ - $ 5,000
Network components $ 4,000 $ - $ - $ 4,000
Total Hardware Cost $ 27,000 $ 18,000 $ - $ 45,000 1%
Software
License $ 42,100 $ 42,100 $ - $ 84,200
SW Maintenance $ 10,525 $ 21,050 $ 21,050 $ 52,625
SW Development $ 50,000 $ 50,000 $ 50,000 $ 150,000
SW Management $ 100,000 $ 100,000 $ 100,000 $ 300,000
Total Software Cost $ 202,625 $ 213,150 $ 171,050 $ 586,825 9%
Management
Architect/Admin $ 200,000 $ 300,000 $ 400,000 $ 900,000
Systems Hosting $ 100,000 $ 200,000 $ 250,000 $ 550,000
Reporting $ 50,000 $ 50,000 $ 50,000 $ 150,000
Total Management Cost $ 350,000 $ 550,000 $ 650,000 $ 1,550,000 25%
Support
Support Staff $ 50,000 $ 100,000 $ 100,000 $ 250,000
Total Support Cost $ 50,000 $ 100,000 $ 100,000 $ 250,000 4%
Implementation
Development/Customization/Integration $ 50,000 $ - $ - $ 50,000
Total Implementation Cost $ 50,000 $ - $ - $ 50,000 1%

Total Direct Costs $ 679,625 $ 881,150 $ 921,050 $ 2,481,825 40%

Managed Service Costs - Program Management Year 1 TCO Life % of

Year 2 Year 3
(Indirect Costs) Pilot Cycle Total Cost

Academy Program
Program Management $ 200,000 $ 400,000 $ 600,000 $ 1,200,000
Account Management $ 200,000 $ 400,000 $ 600,000 $ 1,200,000
Business Operations $ 150,000 $ 250,000 $ 400,000 $ 800,000
Marketing / Promotions $ 120,000 $ 180,000 $ 250,000 $ 550,000
Total Program Cost $ 670,000 $ 1,230,000 $ 1,850,000 $ 3,750,000 60%

Total Indirect Costs $ 670,000 $ 1,230,000 $ 1,850,000 $ 3,750,000 60%

Total Costs $ 1,349,625 $ 2,111,150 $ 2,771,050 $ 6,231,825 100%

TCO/Year $ 2,077,275

Year 1 TCO Life

Cost Avoidance (ROI) Pilot
Year 2 Year 3
Cycle

ROI - $ (negative amount means SAVINGS) $ (5,823,974) $ (12,948,246) $ (16,697,440) $ (35,469,660)

ROI - % 432% 613% 603% 569%

ROI/Year $ (13,900,495)

Substitution of Large Scale Events - Based on FY10 Data (Potential Cost Avoidance)
Nr of Virtual MS Employees $ - $ -
Cost Savings $3446 / Participant $ - $ -
Total Cost Avoidance Virtual Large Event $ - $ - $
Total Potential Cost Avoidance (incl. partly substitution of large scale events) $ (7,173,599) $ (15,059,396) $
$ 5,109 $ (17,605,614)
$ (17,605,614) $ (17,600,505)
(17,600,505) $ (17,600,505)
(37,068,995) $ (59,301,990)

Total Potential ROI - $ (negative amount means SAVINGS) $ (5,823,974) $ (12,948,246) $ (34,297,945) $ (53,070,165)
ROI (Potential) - % 432% 613% 1238% 852%

ROI/Year (Potential) $ (17,690,055)

Potential Cost Avoidance / Participant $ (3,446)

Potential Avoidance Factor 80
 Cost Class Room Training Virtual Briefing (Live Meeting)

Content Development $ 10,000 Webcast Cost (Academy Live) $ 1,500

SME Time $125/hr 8 hrs $ 1,000 SME Time $125/hr 8 hrs $ 1,000
Course Material Development $ 15,000 Total Cost $ 2,500
Trainer Delivery Cost (2 days) $ 4,000 Total Cost / hr $ 2,500
Total Cost $ 30,000 Total Cost / hr per Participant (150) $ 17
Total Cost / hr $ 3,000
T&E 25 Participants $ 50,000
Total Cost incl. Participant T&E $ 80,000 Cost Avoidance / Participant $ (303)
Total Cost per Participant / hour (25 Participants) $ 320 Avoidance Factor 19

Cost In-Person Enterprise Marketing Summit Cost Virtual Enterprise Marketing Summit

Conference Cost (Venue, Handouts, Website) $ 150,000 Videos and Webcasting Costs $ 60,000
T&E 400 Participants each $2.5k (3 days) $ 1,000,000 Program Management, Website, etc. $ 140,000
Total Cost $ 1,150,000 Total Cost $ 200,000
Total Cost per Participant $ 2,875 Total Cost per Participant (400 participants) $ 500

Cost Avoidance / Participant $ (2,375)

Avoidance Factor 6

Cost In-Person Large Event Virtual Large Event Cost

T&E per Participant $ 2,000 Cost per virtual Session delivery $ 760
Conference Cost per Participant $ 1,490 nr of virtual sessions $ 264
Total Large Event Cost per Participant $ 3,490 Subtotal $ 200,640
Project Mgmt $ 10,000
Vendor Travel Cost $ 5,000
Landing page on Academy Portal $ 8,000
Total $ 223,640
Total avg. Cost per session $ 847
Nr of unique virtual employees 5109
Cost per virtual employee $ 44

Potential Cost Avoidance / Participant $ (3,446)

Potential Avoidance Factor 80