SaskTel: Return on Investment from Sun Java Enterprise System

Since 1908 Saskatchewan Telecommunications (SaskTel) has connected people of the Canadian province Saskatchewan. SaskTel, a provincial Crown corporation and full-service communications company, offers complete wire-line, wireless, Internet, and e-business solutions over its state-of-the-art, digital network. SaskTel links 13 cities with 566 smaller communities and their surrounding rural areas, including 55,000 farms. In all, SaskTel serves more than 454,000 business and residential customers with a workforce of 4,300 people.

Problem
Like other telecommunications providers, SaskTel has a heterogeneous IT environment that includes complicated hardware configurations, as well as legacy and custom applications. In 2003, SaskTel discovered that its software environment was falling behind in supporting the needs of business customers that wanted more advanced versions of applications such as integrated mail, hosting, and desktop management services. SaskTel also realized that its diverse, mature, and custom developed infrastructure software would require significant investments before it could provide higher levels of performance and reliability. Management decided that it was important for the business to simplify the IT ecosystem across the different business units while making it easier and cheaper to manage. In parallel to reducing costs, management wanted to pursue new revenue opportunities via shared managed services.

Solution
Following several months of due diligence, SaskTel selected the Sun Java Enterprise System as the infrastructure foundation for its next-generation of application services. Sun Java Enterprise System combines software and services to simplify infrastructure software integration. It provides a core set of network services, including Web and application, availability, portal, communications and collaboration, network identity, and security services. It also includes consulting, installation, maintenance, support and training to help ensure a smooth transition and integration within the enterprise. Java Enterprise System represents a paradigm shift in the way software is engineered, delivered, licensed, and priced and an approach that aligns IT investment with business priorities.

SaskTel chose Sun Java Enterprise System because of three distinct features:

• Integrated Software. Java Enterprise System combines multiple standards-based enterprise network services into one entity that has been pre-integrated and pre-tested as a software system based on a common set of shared components and consistent technologies.
• A Predictable, Systematic Approach. Sun is developing, testing, delivering, and servicing the complete Java Enterprise System offering on a regular basis.
• An Innovative Business Model. Sun is offering customers software, architecture and installation services, training, and technical support for one low price and with only one license.

ROI
The Sun Java Enterprise System delivers value to SaskTel by making software simple, predictable, and affordable. As we illustrate in our analysis, the resulting expected return on investment (ROI) for SaskTel from Java Enterprise System is impressive.

Java Enterprise System could help SaskTel realize software licensing-related cost savings worth C$1.69 million (US$1.28 million) in present value.

SaskTel could gain additional revenue from new services worth C$5.67 million (US$4.19 million) in present value. E-Business Strategies expects this figure to rise if the telco leverages its investment in Java Enterprise System and delivers additional online services over the next three years.

Bottom Line
Organizations considering an investment in Sun Java Enterprise System should carefully evaluate the experience of SaskTel to help formulate their business cases. A clear understanding of the expected costs and benefits will ensure not just positive ROI, but also the ability to maximize the return over a multi-year period.

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