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Author: v-sreedevank

articles/migrate/concepts-business-case-calculation.md

@@ -176,6 +176,18 @@ Cost components for running on-premises servers. For TCO calculations, an annual
 | Labor | Labor | IT admin | DC admin cost = ((Number of virtual machines) / (Avg. # of virtual machines that can be managed by a full-time administrator)) * 730 * 12 |
 | Management | Azure Management Services | Azure Monitor, Azure Backup and Azure Update Manager | Azure Monitor costs for each server as per listed price in the region assuming collection of logs ingestion for the guest operating system and one custom application is enabled for the server, totaling logs data of 3GB/month. <br/><br/> Azure Backup cost for each server/month is dynamically estimated based on the [Azure Backup Pricing](/azure/backup/azure-backup-pricing), which includes a protected instance fee, snapshot storage and recovery services vault storage. <br/><br/> Azure Update Manager is free for Azure servers. |
 
+#### On-premises with Azure Arc cost
+
+| **Cost heads** | **Category** | **Component** | **Logic**|
+|--|--|--|--|
+| Compute and Licensing  | Hardware and Licenses | Server Hardware (Host machines) and Licenses | Estimated as a sum of total server hardware acquisition cost + software cost (Windows license + SQL license + Virtualization software cost) + maintenance cost </br> Total hardware acquisition cost is calculated using a cost per core linear regression formula: Cost per core = 16.232*(Hyperthreaded core: memory in GB ratio) + 113.87 </br> Hyperthreaded cores = 2*(cores) </br> SQL license cost is assumed to be using PAY-GO model via Arc enabled SQL Server. ESU licenses for Windows Server and SQL Server are also assumed to be paid via Azure through ESUs enabled by Azure Arc. |
+| Storage  | Storage Hardware |      | Estimated as a sum of total storage hardware acquisition cost + software maintenance cost. <br> Total storage hardware acquisition cost = Total volume of storage attached to VMs (across all machines) * Cost per GB per month * 12 Cost per GB is defaulted to $2 per GB per month and can be customized in the assumptions Same as current On-premises storage cost. |
+| Network | Network Hardware and software   | Network equipment (Cabinets, switches, routers, load balancers etc.) and software  | Estimated as a sum of total network hardware and software cost + network maintenance cost  Total network hardware and software cost is defaulted to 10%* (compute and licensing +storage cost) and can be customized in the assumptions. Network maintenance cost is defaulted to 15%*(Total network hardware and software cost) and can be customized in the assumptions Same as current On-premises networking cost. |
+| Security | General Servers  | Server security cost | Estimated as sum of total protection cost for general servers and SQL workloads using MDC via Azure Arc. MDC Servers plan 2 is assumed for servers. Microsoft Defender for SQL on Azure-connected databases is assumed for SQL Server |
+| Facilities | Facilities & Infrastructure | DC Facilities - Lease and Power | Based on user input. Same as current On-premises facilities cost. |
+| Labor | Labor  | IT admin | Same as current On-premises labor cost.|
+| Management | Management Software licensing | System center or other management software | Estimated as sum of total management cost for general servers. This includes monitoring and patching. Patching is assumed to be free via Azure Update Manager as it is included in MDC Servers plan 2. Monitoring cost is calculated per day based on log storage and alerts and multiplied*365 Estimated as 70% of on-premises management labor cost by default as it is assumed that 30% of labor effects could be redirected to other high impact projects for the company due to productivity improvements.  Labor costs can be customized in Azure Arc setting under Azure cost assumptions.|
+
 ### Year on Year costs
 
 #### Current state (on-premises)
@@ -202,28 +214,28 @@ Cost components for running on-premises servers. For TCO calculations, an annual
 | Security | Per year |  Per server annual security/protection cost.  |  |
 | Datacenter Admin cost | Number of people * hourly cost * 730 hours | Cost per hour based on location. |     |
 
-#### Future state (on-premises + Azure)
-
-It assumes that the customer does a phased migration to Azure with following % of servers migrated every year:
+#### Future state (on-premises with Arc + Azure)*
 
-| **Year 0** | **Year 1** | **Year 2** | **Year 3** |
- --- | --- | --- | --- |
-| 0%  | 20% | 50% | 100% |
+When you create a business case, by default, servers remaining on-premises are assumed to be Arc-enabled. You can disable Arc calculation by editing Azure cost assumptions.
 
-You can override the above values in the assumptions section of the Business case.
-
- In Azure, there's no CAPEX, the yearly Azure cost is an OPEX
+| | **Year 0** | **Year 1** | **Year 2** | **Year 3** |**Methodology**|
+|-|--- | --- | --- | --- |--|
+| Estate migrated per year| 0%  | 20% | 50% | 100% | User input|
+ 
+*Servers remaining on-premises are assumed to be Azure Arc-enabled. When you create a business case, by default, servers remaining on-premises are assumed to be Arc-enabled. You can disable Arc calculation by editing Azure cost assumptions. 
 
-|  **Component**  | **Year 0** | **Year 1** | **Year 2** | **Year 3** | **Year 4** |
---- | --- | --- | --- | --- | --- |
-| CAPEX | Total CAPEX (A) | Y1 CAPEX Azure =80%* (Y1 CAPEX On-premises) | Y2 CAPEX Azure =50%* (Y2 CAPEX On-premises) | Y3 CAPEX Azure =0%* (Y3 CAPEX On-premises) | Y4 CAPEX = 0%* (Y4 CAPEX On-premises) |
-| OPEX | Total OPEX (B) | Y1 OPEX Azure = 80%* (Y1 OPEX On-premises)+20%* (Azure Yearly cost) * (1+server growth rate%) | Y2 OPEX Azure = 50%* (Y2 OPEX On-premises)+50%* (Azure Yearly cost) * (1+server growth rate%) | Y3 OPEX Azure = 100%* (Azure Yearly cost) * (1+server growth rate%) | Y4 OPEX Azure = 100%* (Azure Yearly cost) * (1+server growth rate%) |
-| Future state Cash Flow | Y0 Cash Flow= Total CAPEX (A) + Total OPEX (B) | Y1 Cash Flow= Y1 CAPEX + Y1 OPEX | Y2 Cash Flow= Y2 CAPEX + Y2 OPEX | Y3 Cash Flow= Y3 CAPEX + Y3 OPEX | Y4 Cash Flow= Y4 CAPEX + Y4 OPEX |
+	| Methodology
+---|----
+CAPEX | Year n CAPEX = (100- estimated migration % that year)* Year n CAPEX in current state
+OPEX | Year n OPEX = (estimated migration % that year) * Total Azure TCO * (1+ infrastructure growth rate%) + (100- estimated migration % that year)* Year n OPEX in current state
+Future state Cash Flow	| Sum of CAPEX and OPEX per year
+Annual NPV	| NPV per year = (Year n Cashflow)/ (1+WACC)^n <br> WACC is defaulted to 7% and can be customized in the assumptions.
+Future State NPV | Sum of annual NPV
 
 ## Glossary
 
-|   Term  |   Details  |
---- | --- |
+| Term  |  Details  |
+| --- | --- |
 | **Business case** | A Business case provides justification for a go/no go for a project. It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution. |
 | **Total cost of ownership (TCO)** | TCO (Total cost of ownership) is a financial estimate to help companies calculate precisely, the economic impact during the whole life cycle of IT projects. |
 | **Return on Investment (ROI)** | A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs. |

articles/migrate/how-to-view-a-business-case.md

@@ -31,7 +31,8 @@ There are four major reports that you need to review:
     - Savings from Security and Management capabilities.
     - Discovery insights covering the scope of the business case.
     - Support status of the operating system and database licenses.
-- **On-premises vs Azure**: This report covers the breakdown of the total cost of ownership by cost categories and insights on savings.
+- **Current on-premises vs Future**: This report covers the breakdown of the total cost of ownership by cost categories and insights on savings.
+- **On-premises with Azure Arc**: This report covers the breakdown of the total cost of ownership for your on-premises estate with and without Arc.
 - **Azure IaaS**: This report covers the Azure and on-premises footprint of the servers and workloads recommended for migrating to Azure IaaS.
 - **On-premises vs AVS (Azure VMware Solution)**: In case you build a business case to “Migrate to AVS”, you’ll see this report which covers the AVS and on-premises footprint of the workloads for migrating to AVS.
 - **Azure PaaS**: This report covers the Azure and on-premises footprint of the workloads recommended for migrating to Azure PaaS.