TCO of Active Directory®

Written by Greg Keller on July 1, 2019

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Historically, IT organizations haven’t focused on the TCO (total cost of ownership) of Active Directory®.

Why would they when it was required and the only game in town? OpenLDAP was hardly an alternative to Active Directory, so it really boiled down to a cost of doing business. Since AD was necessary, it really didn’t matter what it cost. Interestingly, when organizations did take a look at the costs of Active Directory and the ROI around it, they would really only focus on the manpower cost savings against manually managing user access.

One Platform Choice, No Choice But To Pay

A simplistic TCO model for AD probably made sense at the time. All of the other ancillary costs were more fixed costs and would need to be allocated to AD, which would require understanding how much time the organization spent managing it. And that was too much effort, especially for a number that didn’t matter anyway. It wasn’t like IT organizations a decade ago would have eliminated Active Directory if it was too expensive to run.

Alternative Solutions Impact Active Directory’s Value

Today, however, much has changed. The IT landscape is completely different. Active Directory often only controls a small portion of the overall IT infrastructure.

  • MacOS and Linux are now a significant part of the system population.
  • AWS cloud servers have replaced the data center.
  • Web applications are the new norm.
  • Microsoft Exchange has been replaced by other solutions, for example, G Suite® and Office 365®.
  • The concept of the domain no longer exists in the same way it did even five or ten years ago.

All of these shifts in the IT market are changing the value of Active Directory. No longer is it a foregone conclusion that AD has inherent value.

Cloud-forward organizations are studying the costs of Active Directory. They want to know all of the costs that they will incur by running the directory services platform. With the move to the cloud, many of those costs aren’t fixed anymore. Data centers are being decommissioned. IT staff is busier than ever. Security components need to be added to run a critical infrastructure component on-prem. There are real incremental costs to running Active Directory.

Calculating The TCO Of Active Directory

The question becomes, what is the real cost? While it varies from organization to organization, JumpCloud® has built an ROI calculator to help understand the costs of running Active Directory (contact us for access to this calculator). We have also created an equation that helps identify all of the different costs associated with AD. The equation is as follows:

Costs of Active Directory =  servers + software + hosting + backup + security +
                                                          monitoring + VPNs + IT admin + third-party SW +
                                                          multi-factor authentication + governance

Weighing Your Directory Services Options  

Tracking down all of these costs isn’t easy, but it is necessary if you would like to understand the TCO of Active Directory. As stated above, we’ve produced a webinar that takes you on a deep dive into the TCO of Active Directory for cloud-forward organizations. Here’s what you can expect to learn in the video:

  • How to calculate the TCO of Active Directory
  • Overview of Active Directory product functionality
  • Critical factors and decision-making tools, including our ROI Calculator
  • Cloud-forward AD alternative: JumpCloud’s Directory-as-a-Service®

We also have an ROI calculator for directory services that’s referenced in the video and that we would be happy to share. Drop us a note if you would like help figuring it out. We’d be happy to be of assistance as well as share with you comparisons between AD and Directory-as-a-Service®.

Greg Keller

JumpCloud CTO, Greg Keller is a career product visionary and executive management leader. With over two decades of product management, product marketing, and operations experience ranging from startups to global organizations, Greg excels in successful go-to-market execution.

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