A Forrester Total Economic Impact™ Study Commissioned By Google, April 2024
Organizations looking to scale their development teams are often met with complex onboarding processes, inconsistent workflow environments, and local code storage practices. These challenges threaten enterprise security and impede efficiency. In response, organizations are seeking a solution that provides developers with a consistent and secure toolset without the need for costly on-premises resources.
Cloud Workstations from Google Cloud provide developers with a secure managed development environment that simplifies onboarding and accelerates workflow productivity. Accessible via browser or local IDE, administrators and platform teams provision preconfigured workstations for developers to apply customization as needed. Cloud Workstations include a native integration with Gemini Code Assist, an AI-powered collaborator, to further assist developers in problem-solving code and building applications faster.
Google commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Cloud Workstations.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Cloud Workstations on their organizations.
Return on investment (ROI)
293%
Net present value (NPV)
$2.32M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives with experience using Cloud Workstations. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global enterprise with 10,000 employees. Developers, data scientists, and IT admins are users of Cloud Workstations. The composite maintains four clusters in four global regions (europe-west4, us-central-1, asia-southeast-1, southamerica-east-1), and each workstation is comprised of 4 vCPU, 16 GB RAM, and 200 GB of storage.
Interviewees explained how, prior to Cloud Workstations, their organizations’ IT admins devoted a significant amount of time to provisioning new hardware for each developer and on maintenance to adhere to compliance and security protocols. This impeded workflow efficiency for both the admin and development teams. By developing code locally on individualized machines, developers and data scientists lacked the ability to collaborate with their peers as every machine was configured in a unique way. The interviewees’ organizations were also unable to enforce proper identity management practices and ensure their intellectual property was secure, as code lived across disparate machines.
After the investment in Cloud Workstations, the interviewees shared that their organizations’ IT admins, developers, and data scientists gained efficiencies in their respective onboarding, coding, and project setup tasks. Standardized workstations fostered collaboration amongst their organizations’ users and demonstrated the advantage of deploying Cloud Workstations more broadly across their teams in the future. Gemini Code Assist afforded these users additional productivity gains by automating traditionally manual tasks and introducing ways to tackle new tasks (such as code translation) that were previously impossible.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
The representative interviews and financial analysis found that a composite organization experiences benefits of $3.1 million over three years versus costs of $791,000, adding up to a net present value (NPV) of $2.3 million and an ROI of 293%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Cloud Workstations.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Cloud Workstations can have on an organization.
Interviewed Google stakeholders and Forrester analysts to gather data relative to Cloud Workstations.
Interviewed five representatives at organizations using Cloud Workstations to obtain data about costs, benefits, and risks.
Designed a composite organization based on characteristics of the interviewees’ organizations.
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Readers should be aware of the following:
This study is commissioned by Google and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Cloud Workstations.
Google reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Google provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Maria Kulikova
Sarah Lervold
| Role | Industry | Region | Users And Employees | Time Since Cloud Workstations Deployment |
|---|---|---|---|---|
| Lead, collaborative tools | Government | United States | 20 (developer/admin) 5,400 employees | 6 months |
| Head, cyber center of excellence | Financial services | Germany | 350 developers 100 data scientists 50 operators 48,000 employees | 15 months |
| Head, infrastructure | IT consulting | Global | 200 developers 5,000 employees | 6 months |
| DevOps engineer Product owner | Automotive manufacturer | France | 350 developers 120,000 employees | 12 months |
Prior to Cloud Workstations, four of the interviewees noted their organizations deployed on-premises workstations while the fifth interviewee noted their organization had a cloud-based workstation solution. For those with on-premises solutions, interviewees detailed the significant cost required to maintain servers and the IT admin overhead required to manually onboard and offboard each developer. Additionally, with local machines, the interviewees’ organizations struggled to enforce proper security measures and developers remained siloed in their workflows. The interviewee whose organization used a cloud-based infrastructure explained how the solution was significantly more costly than Cloud Workstations and lacked the flexibility their developers needed. This interviewee also noted how their previous solution did not prioritize energy-saving activities, such as shutting down after periods of inactivity.
The interviewees noted how their organizations struggled with common challenges, including:
The interviewees’ organizations searched for a solution that could:
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the five interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a global enterprise with 10,000 employees. Developers, data scientists and admin are active users of Cloud Workstations. Prior to deployment, the composite used a combination on-premises and cloud-based infrastructure to support its development environment.
Deployment characteristics. The composite implements Cloud Workstations over four months. The composite maintains four clusters to account for latency management across four global regions, and each workstation is comprised of 4 vCPU, 16 GB RAM, and 200 GB of storage. In Year 1, 50 developers and 15 data scientists use Cloud Workstations. In Year 2, the user count increases to 100 and 20, respectively, and in Year 3, the user count increases to 150 and 25, respectively. Two IT administrators maintain the platform across all three years.
| Ref. | Benefit | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Atr | Increase in developers’ productivity | $0 | $360,000 | $1,200,000 | $2,160,000 | $3,720,000 | $2,941,848 |
| Btr | Increase in IT admin efficiency | $0 | $41,600 | $41,600 | $41,600 | $124,800 | $103,453 |
| Ctr | Data scientists time savings | $0 | $20,250 | $27,000 | $33,750 | $81,000 | $66,080 |
| Total benefits (risk-adjusted) | $0 | $421,850 | $1,268,600 | $2,235,350 | $3,925,800 | $3,111,381 | |
Evidence and data. Interviewees explained that their organizations’ developers gained efficiencies because of Cloud Workstation’s convenient, browser-based IDE solution. Developers also experienced less downtime required for scheduled maintenance activities, such as security patching, with Cloud Workstations. Interviewees commented that Gemini Code Assist provided additional productivity gains for developers, assisting with documenting and validating code and generating unit tests. Interviewees expected to realize significant increases in productivity from Gemini Code Assist over time.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The benefit of improved developer productivity may vary based on:
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.9 million.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| A1 | Number of developers onboarded | Composite | 50 | 100 | 150 | |
| A2 | Average fully burdened developer salary (annual) | TEI standard | $150,000 | $150,000 | $150,000 | |
| A3 | Percentage of time spent on coding and documentation tasks before | Interviews | 80% | 80% | 80% | |
| A4 | Percentage of time saved on coding with Cloud Workstations | Interviews | 10% | 15% | 15% | |
| A5 | Percentage of time saved due to Gemini Code Assist | Interviews | 5% | 10% | 15% | |
| A6 | Subtotal: Percentage of time saved in total | A4+A5 | 15% | 25% | 30% | |
| A7 | Productivity recapture | TEI standard | 50% | 50% | 50% | |
| At | Increase in developers’ productivity | A1*A2*A3*A6*A7 | $0 | $450,000 | $1,500,000 | $2,700,000 |
| Risk adjustment | ↓20% | |||||
| Atr | Increase in developers’ productivity (risk-adjusted) | $0 | $360,000 | $1,200,000 | $2,160,000 | |
| Three-year total: $3,720,000 | Three-year present value: $2,941,848 | |||||
Evidence and data. Interviewees explained that in their organizations’ previous environments, their IT admin were responsible for onboarding and offboarding developers. Aside from initial setup, this included configuring and monitoring all machines to adhere to necessary compliance and security standards. With Cloud Workstations, IT admin no longer orchestrated these time-consuming responsibilities for on-premises equipment.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The benefit of increase in IT admin efficiency may vary based on:
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $103,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| B1 | Number of IT admin team members | Composite | 2 | 2 | 2 | ||
| B2 | Average fully burdened IT admin salary (annual) | TEI standard | $130,000 | $130,000 | $130,000 | ||
| B3 | Percentage of time spent on onboarding and support for developers before | Interview | 50% | 50% | 50% | ||
| B4 | Percentage of time saved with Cloud Workstations | Interview | 80% | 80% | 80% | ||
| B5 | Productivity recapture | TEI standard | 50% | 50% | 50% | ||
| Bt | Increase in IT admin efficiency | B1*B2*B3*B4*B5 | $0 | $52,000 | $52,000 | $52,000 | |
| Risk adjustment | ↓20% | ||||||
| Btr | Increase in IT admin efficiency (risk-adjusted) | $0 | $41,600 | $41,600 | $41,600 | ||
| Three-year total: $124,800 | Three-year present value: $103,453 | ||||||
Evidence and data. The head of the cyber center of excellence at a financial service organization explained that their organization’s data scientists used Cloud Workstations to run tests on data and stage the data to databases. With Cloud Workstations, this user group gained efficiencies from no longer setting up VMs at the start of each new data project due to required software and infrastructure updates that allowed access to the latest data libraries. With these time savings, data scientists could focus on running and analyzing more code.
The head of the cyber center of excellence at a financial service organization shared: “The big time savings for data scientists is that they don’t have to set up their own VM to manage everything. It’s just two clicks away. They’re getting rid of a setup time [that] previously [took them] two weeks, [and now] goes down to 2 seconds.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The benefit of data scientists’ productivity will vary based on:
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $66,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| C1 | Number of data scientists | Composite | 15 | 20 | 25 | ||
| C2 | Average fully burdened data scientist salary (annual) | TEI standard | $150,000 | $150,000 | $150,000 | ||
| C3 | Percentage of time spent on project setup before | Interview | 15% | 15% | 15% | ||
| C4 | Percentage of time saved on project setup with Google Cloud Workstations | Interview | 15% | 15% | 15% | ||
| C5 | Productivity recapture | TEI standard | 50% | 50% | 50% | ||
| Ct | Data scientists time savings | C1*C2*C3*C4*C5 | $0 | $25,313 | $33,750 | $42,188 | |
| Risk adjustment | ↓20% | ||||||
| Ctr | Data scientists time savings (risk-adjusted) | $0 | $20,250 | $27,000 | $33,750 | ||
| Three-year total: $81,000 | Three-year present value: $66,080 | ||||||
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Cloud Workstations and later realize additional uses and business opportunities, including:
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Dtr | Annual infrastructure costs and managed service fee | $0 | $110,240 | $194,340 | $273,517 | $578,097 | $466,327 |
| Etr | Implementation and ongoing costs | $115,920 | $88,265 | $81,641 | $81,641 | $367,466 | $324,970 |
| Total costs (risk-adjusted) | $115,920 | $198,505 | $275,980 | $355,158 | $945,563 | $791,297 | |
Evidence and data. Each interviewee’s organization paid Google an annual infrastructure cost and managed service fee to grant their user access to a workstation and Gemini Code Assist.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The cost of annual infrastructure and managed service fee may vary based on:
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $466,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| D1 | Annual infrastructure and managed service fee | Composite | $95,861 | $168,991 | $237,841 | ||
| Dt | Annual infrastructure costs and managed service fee | D1 | $0 | $95,861 | $168,991 | $237,841 | |
| Risk adjustment | ↑15% | ||||||
| Dtr | Annual fees (risk-adjusted) | $0 | $110,240 | $194,340 | $273,517 | ||
| Three-year total: $578,097 | Three-year present value: $466,327 | ||||||
Evidence and data. Interviewees explained that Cloud Workstations’ implementation included workstation setup and configuring access to meet security standards. Some interviewees noted their organizations dedicated additional time to customizations across their development environments. In general, interviewees noted that users spent a few weeks on onboarding and initial training.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The cost of implementation and ongoing costs may vary depending on:
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $325,000
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | Number of IT admin team members | Composite | 2 | 1 | 1 | 1 | |
| E2 | Number of hours spent | Interview | 800 | 624 | 624 | 624 | |
| E3 | Average fully burdened IT admin salary (hourly) | TEI standard | $63 | $63 | $63 | $63 | |
| E4 | Subtotal: Implementation and ongoing admin costs | E1*E2*E3 | $100,800 | $39,312 | $39,312 | $39,312 | |
| E5 | Number of users to be trained | Y1: (A1+C1) | 65 | 55 | 55 | ||
| E6 | Training hours | Interview | 8 | 8 | 8 | ||
| E7 | Average fully burdened employee salary (hourly) | TEI standard | $72 | $72 | $72 | ||
| E8 | Subtotal: Training | E5*E6*E7 | $37,440 | $31,680 | $31,680 | ||
| Et | Implementation and ongoing costs | E4+E8 | $100,800 | $76,752 | $70,992 | $70,992 | |
| Risk adjustment | ↑15% | ||||||
| Etr | Implementation and ongoing costs (risk-adjusted) | $115,920 | $88,265 | $81,641 | $81,641 | ||
| Three-year total: $367,466 | Three-year present value: $324,970 | ||||||
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($115,920) | ($198,505) | ($275,980) | ($355,158) | ($945,563) | ($791,297) |
| Total benefits | $0 | $421,850 | $1,268,600 | $2,235,350 | $3,925,800 | $3,111,381 |
| Net benefits | ($115,920) | $223,345 | $992,620 | $1,880,192 | $2,980,237 | $2,320,084 |
| ROI | 293% | |||||
| Payback | 7 months | |||||
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.
Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
Related Forrester Research
Christopher Condo and Andrew Cornwall, “Should You Care About Developer Productivity?,” Forrester Blogs.
“TuringBots Offer A Peek Into The Next Generation Of Software Development,” Forrester Research, Inc., November 21, 2022.
“Five Levers Of Developer Experience For Developers,” Forrester Research, Inc., September 6, 2023.
“Understand Developer Experience To Improve Business Outcomes,” Forrester Research, Inc., June 21, 2023.
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
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