More on Cost Savings and ROI

I recently came across the following Google ad on a UK web site.

(The ad, admittedly, was much more fun to watch on the site, with spinning dials and all...)

It was also a link to a calculator to estimate the cost savings that an organization could realize by migrating their users from the traditional MS Office suite (Outlook, Word, Excel, PowerPoint, etc.) to Google Apps provided over the web (Gmail, Docs, Spreadsheet, Presentation, etc.). (This link brings you to the international version of the calculator.) The site allows visitors to calculate their potential savings on a 3 year engagement based on the number of users served, the hourly cost of the IT manager's time, and some basic assumptions on hardware and license costs. By itself, this is a compelling argument to switch to SaaS.

The interesting thing about this ad, is that Google called it the 'cost savings' and not the 'ROI' of switching to Google Apps. The calculator does the calculations and then shows the costs of both MS and Google scenarios and the difference in TCO between the two. If one is lower than the other, there is a cost savings for switching to the solution with the lower TCO.

Kudos to Google for getting it right!