Way back in 2007, a forward-thinking company created a video portal for employee-generated content for the purposes of knowledge sharing, training and engagement.
That company was Microsoft. The cost to create and maintain that system: $6.2 million, with 2.49 million in direct IT costs alone, over the first 3 years.
They called it the Microsoft Academy video portal, and they’ll tell you it was worth the cost – noting a 569% ROI and an annual cost avoidance of $13.9 million in their white paper detailing the success of the system. Difficult numbers to argue with.
But—that price tag is steep for most organizations. That’s especially true today, as video content management system (video CMS) technology has become readily sourced at a fraction of that cost, making it comparatively easy to stand up an internal video library, complete with features to enable recording, live streaming, editing, viewing, transcoding, reporting, and more.
Microsoft began the Academy portal project with several goals in mind:
With the goals above in mind, Microsoft began to develop the Academy video portal to address the common needs of what it considered to be four key business scenarios:
Building the Academy portal, its enterprise YouTube, was a massive undertaking. Here’s a small slice of what was required:
Since then, Microsoft has incurred further expense for ongoing maintenance, continued technology enhancements, program and product management, and promotional efforts.
Microsoft concludes its case study by discussing in detail the return on investment they’ve calculated for Academy portal, and the results are stunning. Broken out by category:
“Overall, the money spent on Academy over a 3-year lifespan was about $2.1 million per year, but the total costs saved and avoided per year were about $13.9 million. ROI for the 3-year period is estimated at 569%,” their case study reads.
For Microsoft, the benefits were worth the huge efforts, high price tag and lengthy process of building a video content management system.
But what if they had just sourced one instead?
First, Microsoft would have saved money.
Microsoft attributes 40% of the Academy portal’s $6.2 million price tag—$2.49 million in total—to direct IT-related costs, including hardware and software, management, hosting, support, and implementation. The rest is chalked up to overhead and operating costs, including program and account managers, business operations, and marketing promotions.
For a company like Microsoft—an enormous global organization rolling out a video CMS company-wide all at once—and based on their 3-year Academy portal adoption rates, an on-premises, sourced video CMS like Panopto would amount to 7-figure savings. Many organizations—even large organizations—would see costs that are a small fraction of what Microsoft paid.
Second, Microsoft would have gotten a more advanced video platform.
Not only would Microsoft had spent less to source their video CMS, they’d have gotten virtually instant access to a complete, fully-functional video CMS that already does everything they had scoped and much more—without the multi-year setup process.
So when it comes to enabling video across your organization, what’s better: Build or Buy?
For a complete discussion, cost and feature comparisons, and the answer to that question, download our latest white paper, “Your Corporate YouTube: Build or Buy?” today.