Red Hat JBoss Middleware Software and the Hidden Costs of Unsupported Software. An IDC InfoBrief, sponsored by Red Hat May 2017

Transcription

1 Red Hat JBoss Middleware Software and the Hidden Costs of Unsupported Software May 2017

2 Executive Summary IDC s research shows that interviewed organizations capture significant value by investing in Red Hat JBoss solutions rather than using unsupported community software. Stated differently, these organizations are avoiding significant potential hidden costs of using alternative unsupported community software in terms of: Value of application developers Lower developer productivity levels means a higher staff cost per new application or feature Ensuring compliance Certifications enable avoiding third-party costs, and going with supported model can obviate need for later costly and time-consuming migrations to supported solutions Staff cost of management/support Less staff time required on a per application basis frees up valuable time to be reinvested in other activities or initiatives Missed business opportunities Being unable to address new business opportunities means incurring a cost in the form of missed revenue pg 2

3 Developers Drive Digital Transformation The industry is, once again, at an inflection much like we experienced in 1992 (client server era), 1997 (Internet era), and 2008 (virtualization era). However, this time, the ability to build applications that leverage emerging technologies including Internet of things, cogitative, machine learning and leveraging digital transformation will separate the winners from the losers. Also different is the comprehensive influence of open source software. IoT and Other Data Decision Support Real Time Analytics pg 3

4 Developers and Open Source The developer community may be the most accepting group when it comes to open source software, and many developers put together their development environment using a heavy helping of open source software in project form rather than in commercial form. However, there remains intrinsic value associated with commercially supported open source technologies including:» Long term lifecycle with commercial support. Development work is applied to a known, consistent configuration that mirrors the deployment environment» Ability to look to a third party expert to support run time components, keeping them patched and secure» Commercial certification available for third party applications that may use the same runtime environment pg 4

5 Study Methodology and Firmographics IDC interviewed eight organizations using Red Hat JBoss Middleware solutions and asked them to compare their experiences with Red Hat with comparable alternative community unsupported software. Study participants are large organizations on average, and using Red Hat JBoss solutions to support 228 application developers on average to deliver 20 new applications and 207 new features annually to employees, partners, and customers. Firmographics Average Number of employees 82,250 Number of IT staff 6,076 Number of IT users 78,162 Annual revenue $16.69B Industries Automotive, Financial Services (3), Healthcare, Media, Telecom Red Hat JBoss Environment Average Number of new applications developed per year 20 Number of new features developed per year 207 Number of developers using 228 pg 5

6 Benefits of Using Red Hat Supported Software Study participants are achieving significant value - $7.15 million per organization per year on average - by investing in the supported Red Hat subscription model rather than using unsupported community software alternatives. By investing in Red Hat, these organizations enhance productivity of application developers and IT infrastructure teams, and increase revenue. This demonstrates the extent to which using unsupported community software in lieu of Red Hat JBoss would impose additional indirect costs in the form of lower staff productivity and missed revenue - that would significantly outstrip the cost of Red Hat JBoss products. $5,848,900 Benefits per year per interviewed organization working with $1,000,400 $204,900 $100,700 Total: $7.15M Higher IT staff productivity Business productivity benefits IT infrastructure cost avoidances Risk mitigation user productivity benefits pg 6

7 Industry Vertical Perspectives on Supported Software with Red Hat Financial Services Organization / Regulatory Compliance We have to demonstrate data lineage to regulators on a periodic basis under different regulations. There are a lot of things required from a compliance perspective. Because there is not much visibility into what is going on with unsupported solutions, we cannot guarantee compliance like we can using Red Hat supported software. Financial Services Organization / Security: Security was key for us in choosing to go with Red Hat supported software because of the client-facing type applications that we have in place. Red Hat has security built in and helps us track security and different types of issues that we may encounter. It also automatically delivers updates from a security perspective and helps to manage and administer the environment from a systems analyst perspective as well. Healthcare / Regulatory Compliance and Business Impact: We re subject to PCI and HIPAA we could do both without what Red Hat provides us, but it would take more time and be a little more cumbersome... For a 6-week development cycle, we re probably saving 10-20% of developers time because regulatory is a big factor for healthcare. Also, we re getting applications out faster, so they re available for longer, which all goes towards higher revenue for us. Telecom Services Provider / Change in Company Structure: We use Red Hat JBoss instead of an unsupported community version mostly for support and security reasons. We became a public company and have to support multiple compliance audits. With Red Hat, we have SLAs for security patches, and that s important for regulatory compliance. pg 7

8 Delivering More Apps and Features Study participants reported that Red Hat JBoss solutions enable more efficient and effective application development efforts thanks to enhanced capabilities, support, and standardized processes; this means they are delivering more new applications and features to employees, partners, and customers to meet increasing demand for new applications and functionality. We re delivering a couple hundred features in a year with Red Hat JBoss software. It would be that approximately half of that, if we used an unsupported community alternative. 15% 20% 33% more new applications per year % more new features per year Number of new applications per year Number of new features per year pg 8

9 In Less Time Further, study participants are able to deliver new applications and features in less time with Red Hat JBoss software. This not only means that less development time is required per new application or feature, but that end users have access to these applications and features at an earlier time. Time to market depends on the complexity of the application, but from what I ve seen, it takes 4-5 months with Red Hat and 6-7 months with an unsupported version. We can develop faster on the Red Hat platform because we have access to the JBoss Developers Studio % faster development lifecycle % faster development lifecycle Number of weeks per new application Number of weeks per new feature pg 9

10 Means That Developers Deliver More Value Faster delivery of more new applications and features means that development teams better support business operations. Thus, they contribute more value on a per application or feature basis; another way to look at this is that they are reducing the cost of developer time per new application or feature, enabling them to avoid a significant potential hidden cost to their development teams of using unsupported community software. If we used a free version, I think the user adoption rate for applications would change. We start at about 40% in the first month with JBoss, and I think it would be more like 15-20% with an unsupported alternative because they are a bit clumsier for troubleshooting, and our team would have to do more coding themselves. 12,306 33% less developer time per new application 8,217 2,569 1,284 50% less developer time per new feature Hours per new application Hours per new feature pg 10

11 More Efficient Management and Support Study participants are leveraging having a standardized, supported development and integration platform with Red Hat to make ongoing management of applications more efficient. This reduces the cost of managing and supporting these applications. We can manage applications more efficiently with JBoss because there is consistency across our platform. We standardize our approaches, and the application management teams know those standardized approaches... I think that they save 25-30% of 90 people compared with using an unsupported community alternative % more efficient ongoing management % more efficient ongoing support (helpdesk) Hours per 100 users per year Hours per 100 users per year pg 11

12 Meeting Compliance Obligations Cost-Effectively Industry-specific certifications More secure, hardened software architecture Ability to better meet auditing requirements Why Red Hat supported software? Avoiding potential costs of moving applications to supported environment Improved visibility in data and data lineage pg 12

13 Better Supporting the Business Interviewed organizations are achieving better business results by leveraging capabilities of Red Hat JBoss software. They can deliver applications and services faster, better integrate development efforts to their businesses, and take advantage of higher reliability. As a result, they attribute more than $7 million per year of additional revenue to Red Hat. We re getting applications out faster with Red Hat JBoss... So they are out faster and our applications are available for longer periods of time. All of this goes towards revenue probably $2 million per year in additional revenue. Business Impact Revenue from Better Addressing Business Opportunities Per Organization Total additional revenue per year $6.92 million Assumed operating margin 15% Total operating margin impact per year $1.04 million Unplanned Downtime Impact Revenue Lost Revenue lost per year $190,300 Assumed operating margin 15% Total operating margin impact per year $28,552 pg 13

14 ROI Summary Interviewed organizations are achieving value with Red Hat JBoss solutions that significantly outweighs their investment costs. This reflects the additional value that Red Hat brings them by enabling development teams, making ongoing management and support of applications more efficient, and supporting the generation of additional revenue. IDC projects that, compared with unsupported community alternatives, these organizations will achieve a three-year ROI of 538%, and breakeven in their investment in Red Hat in seven months. Three-Year ROI Analysis Per Organization Per 100 Developers* Benefit (discounted) $16.85 Million $7.39 Million Investment (discounted) $2.64 Million $1.16 Million Net Present Value $14.21 Million $6.23 Million ROI (NPV/Investment) 538% 538% Payback (Months) 7 7 Discount Factor 12% 12% *Based on average of 228 developers working with pg 14

15 Conclusion» Study data presented in this InfoBrief shows a clear payback associated with using Red Hat commercially supported developer tools and run time components» Double-digit improvements of developer productivity means more features are developed and more applications are completed» Compounding the developer benefits are production deployment benefits that mean lower costs for the operations staff forever Developers need to mix and match open source projects with commercially supported run time solutions to optimize paybacks to their organization pg 15