The Total Economic Impact Of Microsoft Azure SQL Database Managed Instance

Cost Savings And Business Benefits Enabled By Microsoft Azure SQL Database Managed Instance

A Forrester Total Economic Impact™ Study Commissioned By Microsoft October 2018

Executive Summary

Microsoft Azure SQL Database Managed Instance is a new deployment option that provides organizations the ability to migrate their on-premises SQL Server applications and databases onto a fully managed SQL Server in the Azure cloud. Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Azure SQL Database Managed Instance. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of migrating on-premises SQL Server Databases to Azure SQL Database Managed Instance. To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed several customers who have migrated their SQL Server data onto a managed instance. Azure SQL Database Managed Instance is a fully governed and managed PaaS (platform-as-a-service) with built-in intelligence that enables easy migration onto the Azure cloud. It offers high availability and a transparent pay-per-use pricing model that allows customers to reduce annual hardware capital expenses and boost employee productivity. In addition, organizations can quickly scale up and down capacity, integrate with other Azure services, automatically back-up data and receive security patches and version upgrades without any additional charge.

Prior to migrating to Azure SQL Database Managed Instance, interviewed organizations were managing their SQL Server database environment onpremises. This model involved annual capital investment in purchasing new hardware and an increase in both storage and networking costs to align with business growth and capacity requirements. This model also increased the burden on in-house database administrators (DBAs) and IT teams to constantly provision, deploy, and manage their SQL Server database environment.

Ultimately, the four interviewed organizations indicated key benefits of increasing capacity without large infrastructure costs and improving IT productivity among others. Interviewed customers noted that Azure SQL Database Managed Instance was in line with their business objective to transition applications and workloads onto the cloud to have a more flexible solution that allows them to quickly scale based on their business need without putting extensive burden on their IT teams. In addition, developers would not have to spend time re-architecting applications, and organizations could use instance level capabilities without changing their application design. The director of storage systems at a large technology service provider stated that: “We operate in multiple countries and our objective is to keep our data at a local-level. With Managed Instance not only is it much faster to deploy and manage our databases, but we have also saved a lot from building out our data centers.”

Key Findings

Quantified benefits. The following risk-adjusted present value (PV) quantified benefits are representative of those experienced by the companies interviewed:

  • Avoided hardware, network, storage, and ongoing maintenance costs of $1.8 million. Migrating SQL Server data and workloads onto a managed instance has significant capex and opex benefits. Organizations noted that they avoided capital expenses in new servers and hardware and reduced associated networking, storage, and maintenance costs. Conservatively, organizations estimated approximately $800,000 in avoided costs, resulting in three-year PV savings of $1.8 million. ›
  • Forty percent (40%) improvement in DBA productivity. In moving to SQL Database Managed Instance, organizations were able to drive significant efficiencies for their in-house DBAs who were constantly managing and provisioning new infrastructure and capacity. Customers noted that they were able to see a 40% improvement in DBA productivity by moving to Microsoft Azure SQL Database Managed Instance, resulting in three-year PV savings of $688,000. ›
  • Twenty percent (20%) increase in IT productivity. Customers noted that with the key features of Azure SQL Database Managed Instance, i.e., automatic data backups, automated security patching, application compatibility, version upgrades, and integration with other PaaS services, customers were able to see a 20% increase in productivity across their IT management and security teams. In addition, developers did not have to spend time re-architecting applications, resulting in threeyear PV savings of $698,000. Costs. The interviewed organizations experienced the following riskadjusted PV costs: ›
  • Annual license costs. As a PaaS product, Azure SQL Database Managed Instance is priced based on a vCore-based usage model. This gives organizations the flexibility and transparency to scale their compute, memory, and storage needs to meet their capacity requirements. The customers interviewed migrated business critical and general-purpose applications and workloads across four instances with four terabytes of storage per instance. Over the course of three years, the estimated average license cost is approximately $25,000 per month, resulting in a three-year PV cost of $858,000. ›
  • Migration and deployment costs. In moving to Azure SQL Database Managed Instance, organizations need to migrate their existing onpremises SQL Server data. Typical deployment lasts four to six months which includes migration, integration, and testing. These are one-time initial costs, resulting in a PV cost of $165,000.