Return on investment (roi) from log analytics solutions

PUNEET PANDIT
Tuesday, April 29, 2014

The question of ROI comes up quite regularly in our sales discussions with prospects. It is natural for our buyers to delve on that topic since many evaluate GLASSBEAM SPEND WITH INTERNAL EFFORTS. We are no doubt on an evangelistic mission to convert naysayers inside product companies who think they can "build" such a solution on their own.

Typically there are three parts of GLASSBEAM VALUE that constitute a very compelling ROI:

1. Cost savings in technical support operation - through better log management, reducing MTTR (mean time to resolution) in support escalations, building a centralized knowledge base with rules & alerts, providing predictive analytics and preempting part failures, etc. Typically with such benefits, we have seen providing 20-40% efficiency per TSE (tech support engineer). Therefore, if a company has 20 TSEs, they should be able to do the same support workload with 16 TSEs, thus providing an annualized cost savings of $600K, at $150K loaded cost per FTE).

2. Revenue expansion through new value add services – create NEW REVENUE PROGRAMS through professional services for audits, health checks, and customer dashboards. Typically we have seen that a product company should be able to up-sell 2% of its product ASP each year (so if a product costs $100K and the company has 1,000 units in its installed base, the company should be able to monetize an on-going new revenue stream of $2M per year).

3. Product Intelligence through installed base analytics – provide BUSINESS INTELLIGENCE on real time product behavior/usage in the field, ability for engineering or field organization to proactively act on the root cause analysis, ability for product management to intelligently prioritize future features based on real time feedback from customer usage patterns.

In a recent extensive survey done at one of our major customer sites, we collected data through online survey with over 90 people and conducted deep interviews with about 10 of them to arrive at some groundbreaking ROI numbers. We discovered that our application value was being delivered across almost all business functions in this organization: sales, support, services, marketing, product and engineering.

From a conservative revenue impact standpoint, a few people had used our analytics to help close $12M of new sales at their accounts. Use cases that helped close this business included predictive analytics on capacity usage at customer sites (go sell now since the customer is going to run out of capacity in next 3 months). Many times Glassbeam helped the sales teams get proactive information on systems that were mis-configured allowing better customer satisfaction and experience to help close new deals..

Estimated annualized productivity impact came to about $8M across support and services organizations. What used to take hours to resolve product quality issues in customer escalations, same job was being done in minutes providing a tremendously lower MTTR. Not only were the customers happier, but the entire cross functional team at this company – from a field support engineer to corporate based technical support engineer to product engineer – all were looking at the same analytics to do their job for that customer escalation.

There is a great quote that I love from this study that was done by TANEJA GROUP: “A team wide adoption of Glassbeam seems to help everyone pull together with shared, consistent, up-to-date information. It may be hard to measure, but we believe having empowered, coordinated people increases initiative while reducing argument and dissention. Getting the whole organization to share the same big picture can be, as they say, priceless”.