Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

ECONOMIC VALIDATION

Analyzing the Economic

Benefits of the VMware Tanzu
Application Platform
Tanzu Application Platform Can Accelerate Development
Projects, Facilitate Consistency Across Projects, and
Improve the Security Posture of Delivered Applications

By Nathan McAfee, Senior Economic Analyst

Enterprise Strategy Group
May, 2023

This Enterprise Strategy Group Economic Validation was commissioned by VMware

and is distributed under license from TechTarget, Inc.

© 2022 TechTarget, Inc. All Rights Reserved.

 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

Contents
Introduction ..................................................................................................................................................................... 3
Challenges .................................................................................................................................................................. 3
The Solution: VMware Tanzu Application Platform .................................................................................................... 4
Enterprise Strategy Group Economic Validation ........................................................................................................... 5
VMware’s Tanzu Application Platform ........................................................................................................................ 5
Increased Agility ...................................................................................................................................................... 5
Reduced Complexity .............................................................................................................................................. 6
Hardened Security Posture .................................................................................................................................... 7
Enterprise Strategy Group Analysis ........................................................................................................................... 8
Conclusion ...................................................................................................................................................................... 9

2
 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

Introduction
This Economic Validation from TechTarget’s Enterprise Strategy Group focuses on the quantitative and qualitative
benefits organizations can expect from using VMware’s Tanzu Application Platform to simplify and accelerate
application development while securing software supply chains.

Challenges
Application development environments are evolving at a pace that makes creating useful and secure apps
challenging. With 45% of public-facing organizations expecting to support more than 200 websites and applications
within the next two years,1 there is increased pressure on development teams to generate code for more
applications. However, in addition to the demand for a higher quantity of applications, organizations are seeing a
threat landscape that is consistently growing in terms of the frequency of attacks as well as the sophistication of the
attack vectors. More than half of organizations said that securing their organization’s web applications has become
more difficult over the last two years. The top challenges organizations reported facing while protecting their public-
facing web applications are shown in Figure 1.2

Figure 1. Top Challenges of Protecting Public-facing Web Applications

Which of the following challenges does your organization face with

protecting its public-facing web applications? (Percent of respondents,
N=366, multiple responses accepted)

An increase in the threat landscape 46%

Increasing usage of cloud services 44%

Agile application development processes make it difficult
44%
to maintain proper security
Lack of clarity around ownership for securing web apps
42%
and APIs
Ineffective security tools 36%

Too many security tools 32%

Not enough application security skills and/or personnel 30%

We do not have any challenges 2%

Source: Enterprise Strategy Group, a division of TechTarget, Inc.

When looking at application development as a whole, Enterprise Strategy Group (ESG) customer interviews found
that, in addition to demand and security challenges, organizations had to overcome:
• Complexity of using Kubernetes in larger configurations – Customers interviewed by ESG reported that,
once Kubernetes clusters grew past double digits in size, the learning curve needed to create and maintain
those environments was hard to find and expensive to keep. Traditional environments can be complex and
time-consuming.

1 Source: Enterprise Strategy Group Research Report, Trends in Modern Application Protection, July 2022.
2
Ibid.

© 2022 TechTarget, Inc. All Rights Reserved.

 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

• Application modernization – Modernized applications are more efficient, agile, and secure, and they
integrate better with other applications and systems. However, due to distributed complexity, application
modernization takes significant time and knowledge and can be costly.
• Consistency in deployment – It is hard to maintain the consistency of applications that are deployed across
multiple environments. This creates an increased risk of errors and reduced reliability.
• Resource availability and utilization – Making the right resources available for developers can be a
challenge, as environments need to be scaled to service peak demand. This results in time periods when
resources are either unavailable or overprovisioned and sitting idle.

The Solution: VMware Tanzu Application Platform

VMware’s Tanzu Application Platform enables developers to streamline application development by automating
many of the tasks that can bog down processes so that developers can focus on writing code instead of the
underlying infrastructure. Tanzu Application Platform customers report that their releases are accelerated and
require fewer development hours, their end products are more secure, and there is more consistency in
applications deployed across all environments. IT groups find that Tanzu Application Platform provides instant
scalability and the flexibility needed to make sure that resources are always available and used efficiently, while
business leaders report faster time to market and better alignment between business needs and the released code.
Tanzu Application Platform is a cloud-native architecture designed to help organizations build and deploy
applications quickly and easily. The platform is a cornerstone for organizations looking to increase their application
modernization. As shown in Figure 2, the platform accelerates application releases, reduces complexity, and
improves security, all while increasing developer satisfaction and production.

Figure 2. VMware’s Tanzu Application Platform

Source: Enterprise Strategy Group, a division of TechTarget, Inc.

4
 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

Enterprise Strategy Group Economic Validation

Enterprise Strategy Group (ESG) completed a quantitative economic analysis on the impact that Tanzu Application
Platform can have on an organization’s ability to meet their IT and business goals. ESG’s Economic Validation
process is a proven method for understanding, validating, quantifying, and modeling the economic value
propositions of a product or solution. The process leverages ESG’s core competencies in market and industry
analysis, forward-looking research, and technical/economic validation. ESG conducted in-depth interviews with end
users to better understand and quantify how Tanzu Application Platform has impacted their organizations,
particularly in comparison with previously deployed and/or experienced solutions. The qualitative and quantitative
findings were used as the basis for a simple economic model comparing the expected costs and benefits of Tanzu
Application Platform with traditional and competitive development platforms.

VMware’s Tanzu Application Platform

The Enterprise Strategy Group (ESG) economic analysis revealed that the Tanzu Application Platform provides
customers with significant benefits, including:
• Increased business agility – ESG found that Tanzu Application Platform customers can react to changes
faster and release their applications quicker and with more predictability than they could before they adopted
the platform.
• Reduced complexity – Tanzu Application Platform automates many of the complex tasks associated with
application development and enables developers to focus on writing code.
• Hardened security posture – Tanzu Application Platform facilitates visibility and consistency throughout the
development process, resulting in more secure and auditable code.
Increased Agility
Being able to react to changes in business environments allows organizations to capitalize on new opportunities
while minimizing the impact of new challenges. The Enterprise Strategy Group (ESG) analysis found that Tanzu
Application Platform can increase IT and business agility with benefits including:
• Accelerated release cycles – Getting code in the
hands of users sooner has multiple benefits:
Important features are available sooner, “Starting a project is much faster with
organizations can realize revenue benefits by Tanzu Application Platform. Our
accelerating time to market or being first to market, developers can start writing code in
and the hours spent developing code and managing minutes instead of days or weeks, and
projects are reduced. Based on customer interviews we are more confident that the
that revealed reductions of between 31% and 90% in applications they create are within our
development time, ESG created a financial model guidelines.”
using a conservative estimate of a 31% reduction in
development time for new applications and a 35%
reduction in time to create updated versions. These
savings resulted in a $1.53 million benefit for the model’s sample company.
• Increased revenue – Companies studied in this analysis showed an increase in revenue of between 2% and
25% in application-based operations. This range was based on the overall maturity of their environment before
their migration to Tanzu Application Platform and results from the increased number of projects that can be
completed each year, better alignment between the needs of customers and the developers’ ability to deliver to
those specifications, reduced customer churn, and the flexibility in development needed to deliver to new
customer sets. ESG’s financial model shows a 1.5% increase in annual revenue, resulting in a $2.1 million
annual benefit.

5
 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

• Speed of application refactoring – Customers interviewed for this study shared a substantial
improvement in the ability to refactor and modernize applications. One customer shared, "Rewriting apps
can take years. With Tanzu Application Platform, we were able to complete our refactoring in a
third of the time compared to what it used to take. With Tanzu Application Platform, you can
refactor in chunks instead of doing the entire app at once, to keep things running while
modernizing applications.”
• Fewer human errors – Human errors in development incur costs in time, quality, morale, and security
posture. ESG found that Tanzu Application Platform can reduce human errors by providing features such as
templates and boilerplates. As one interviewee shared, "Lack of standardization is one of the top reasons
for human errors. Boilerplates are the reason for most dev errors. A boilerplate is about 50% of the
total code. Since Tanzu Application Platform handles boilerplates, developers can focus purely on the
business logic of their code. This has reduced our human error by about 30%.”
• Improved time to value for new employees – With the employee turnover rate exceeding 21% for software
developers,3 the time needed to bring a new developer up to company standards is costly and injects risk into
code that is developed during their ramp period. One customer interviewed for this analysis shared, “Many of
our developers were fresh out of universities. It used to take six months to get them up to speed. With
Tanzu Application Platform, that ramp time is less than a month. They no longer need to know about
Kubernetes; they can just focus on writing their code.” In ESG’s financial model, the value of accelerating
this ramp time for a company with 20 new developers added per year was $349K annually.
Reduced Complexity
VMware’s Tanzu Application Platform enables developers to create code without forcing them to fight through the
complexity of building, deploying, securing, and managing development environments. While this approach
simplifies the development process, Enterprise Strategy Group (ESG) found that the platform extends the ability of
the developers to create quality code. Factors that contribute to reducing complexity include:
• Instant scalability – The complexity of making resources available to developers is a daunting task. In
traditional development environments, infrastructure must be maintained to meet peak demand and may take
weeks or even months to provide development environments for new projects, according to customers
interviewed for this analysis. Tanzu Application Platform provides the ability to scale instantly and almost
infinitely to ensure that developers have access to the right level of resources to start and complete a project.
• Integration of APIs and microservices – The integration of APIs and microservices can increase
functionality, but each integration comes with a price of injected complexity and uncertainty in the quality of the
integrated code. ESG found that Tanzu Application Platform provides a level of visibility into all integrated code
that reduces the complexity and risk associated with outside code.
• Reduced developer turnover – One of the biggest
risks to growth that companies shared is the ability to
retain development talent. Through customer “Tanzu Application Platform makes our
interviews, ESG found that Tanzu Application developers happy. Happier developers
Platform has a notable impact on the satisfaction of stay with us, attrition is lower, they
development and DevOps teams by reducing the produce better code, and they work
noise associated with managing development better together with the rest of our staff.”
environments and allowing developers to concentrate
on coding. One customer shared, "Tanzu helps us
mitigate the risk of developer turnover."
• Reduction of technical debt – Technical debt is the long-term cost associated with making short-term
decisions. In development, technical debt surfaces as an inordinate amount of time required to test and
remediate environments, as well as limitations in the development process that require coders to wait for
resources or rework sections. Companies that have high levels of technical debt find chunks of current budgets

3 Source: Forbes, Four Tips On Lowering Your Engineering Team’s Turnover, April 2021.

6
 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

squandered to remedy short-sighted decisions in the past and often see their end products out of alignment or
too complex for maximizing growth. ESG found that companies that adopt Tanzu Application Platform can
reduce their technical debt while gaining the flexibility to capitalize on new opportunities.
Hardened Security Posture
Beyond all other requirements, code must be secure. The impact of releasing code with security holes starts with
dissatisfied customers and ends with breaches that can shut down companies. Unfortunately, the attack vectors for
software are increasing both in volume and sophistication faster than most organizations can train their developers
to understand. Enterprise Strategy Group (ESG) found that Tanzu Application Platform can have a considerable
impact on security posture through capabilities including:
• Shift of security onus away from the developer –
Most developers are experts in writing code, but in “Most developers are not experts in
traditional developer environments, they are compliance or security. Tanzu
expected to understand and code to security Application Platform allows them to
requirements that are outside their realm of focus on their level of expertise and lets
knowledge. Tanzu Application Platform shifts the the platform take care of security and
onus of security to the platform and gives compliance in a consistent and
organizations a consistent level of protection and repeatable way.”
governance in everything that is released.
• Consistency in development environments –
When developers are relied on to ensure their code is secure, the level of protection is limited to that specific
developer’s ability and can vary widely across a team of coders. That inconsistency results in a security
posture that is only as strong as its weakest link. Tanzu Application Platform provides a level of governance
and consistency across all development projects to ensure that the output from all developers meets company
expectations.
• Reduced mean time to repair (MTTR) – Tanzu Application Platform facilitates centralized operation and
consistency in management that can reduce MTTR by 75% and CVE patching by 90%. These benefits save
time and effort, and, more importantly, they help resolve incidents faster.
• Improved compliance and auditability – ESG found that Tanzu Application Platform users were able to
assure customers and senior leadership that their applications were within compliance regulations, specifically
because of the governance and consistency that the platform provides. One customer interviewed for this
study said that the visibility that Tanzu Application Platform provides enables them to create more compliant
applications, while another shared, “I can give senior leadership a higher level of assurance that we can
meet our compliance and regulatory requirements. FEDRAMP requires a software bill of materials, and
Tanzu Application Platform does that automatically.” ESG interviews found that the hours needed to
collect and process software bills of materials were 40% lower with Tanzu Application Platform.
• Reduced chance of data breaches – With the average cost of data breaches reaching $4.24 million4 and
with 73% of organizations reporting that they have been negatively impacted by a successful ransomware
attack in the previous 12 months,5 companies find that a breach can be catastrophic. When viewed as a
software development organization, delivering code with a high level of risk of breach can cause customers to
leave, muddy a reputation, and drive companies out of business. Based on customer interviews, ESG’s
financial models show the risk of data breaches to be lowered by approximately 28% with the use of Tanzu
Application Platform.

4 Source: IBM Security, Cost of a Data Breach Report 2021, July 2021.
5 Source: Enterprise Strategy Group Research Report, The Long Road Ahead to Ransomware Preparedness, June 2022.

7
 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

Enterprise Strategy Group Analysis

Enterprise Strategy Group (ESG) leveraged the information collected
Why This Matters
through vendor-provided material, public and industry knowledge of
economics and technologies, and the results of customer interviews to Enterprise Strategy Group
create a three-year total cost of ownership/ROI model that compares the (ESG)'s financial models are
costs and benefits of VMware Tanzu Application Platform. ESG’s based on customer interviews,
interviews with customers, combined with our experience and expertise in research, and analyst input. In
addition to the modeled
economic modeling and our technical validation of Tanzu Application
company referenced in this
Platform, helped to form the basis for our modeled scenario. paper, multiple organizations
ESG’s modeled scenario is based on a company with $140 million annual were tested in the model to
revenue in the high-tech industry. As detailed in Table 1, the company’s
ensure consistency.
156 applications were coded by 52 developers. Each development While the views in this paper
project took approximately 16 weeks and was created in an environment are based on a comparison to
consisting of a combination of commercially available and open source a high-tech company, ESG
tools. The company experienced 22% annual turnover in their found that the benefits
developers.
reported should apply to
development organizations in
any industry.

Table 1. Parameters of Modeled Organization and Benefits of Tanzu Application Platform

Item Baseline Tanzu Application Platform Impact

Number of Applications 156 Able to handle up to 50% more applications
31-90% reduction in development time for new apps
Development Time 16 weeks
33-90% reduction in development time for refactored applications
Annual Revenue $140 million 2-25% revenue increase in application-based operations
Developer Ramp Time 6 months 80% acceleration in new developer ramp time
Kubernetes Utilization N/A 30% increase in efficiency of Kubernetes
Human Errors N/A 30% reduction in human application development errors
Risk of Data Breaches 8% annually 28% reduction in likelihood of data breach

Source: Enterprise Strategy Group, a division of TechTarget, Inc.

8
 Economic Validation: Analyzing the Economic Benefits of the VMware Tanzu Application Platform

Conclusion
For many organizations, the development of software is key to current and future success. As software becomes
more functional, complexity increases, as do the risks that come from criminals and hackers. Companies often find
themselves limited in their ability to take advantage of new opportunities because of the risks associated with
development and the limited skill sets of their developers.
Enterprise Strategy Group (ESG) analyzed the impact that VMware Tanzu Application Platform can have on
development organizations and found that it facilitates increased agility and reduced complexity and hardens
security posture. ESG found that organizations that adopt the platform can create better-quality code, faster, and
with more consistency when compared to their before-Tanzu state.
Developers want to create code; most do not want to be security experts or juggle different tool sets. Operations
teams do not want to struggle with keeping peak-level infrastructure available to provide development
environments. Organizations do not want variability in the consistency of their software products. They want an
even level of functionality and governance to ensure that delivered products align with the requirements of the
project. ESG found that Tanzu Application Platform provides all these capabilities.
Whether your organization has an existing collection of tools and development environments or is just getting into
development, ESG suggests you explore how Tanzu Application Platform can help you produce better code,
increase revenue, lower costs, and have happier DevOps teams.

©TechTarget, Inc. or its subsidiaries. All rights reserved. TechTarget, and the TechTarget logo, are trademarks or registered trademarks of TechTarget, Inc. and are registered in
jurisdictions worldwide. Other product and service names and logos, including for BrightTALK, Xtelligent, and the Enterprise Strategy Group might be trademarks of TechTarget or its
subsidiaries. All other trademarks, logos and brand names are the property of their respective owners.

Information contained in this publication has been obtained by sources TechTarget considers to be reliable but is not warranted by TechTarget. This publication may contain opinions of
TechTarget, which are subject to change. This publication may include forecasts, projections, and other predictive statements that represent TechTarget’s assumptions and expectations
in light of currently available information. These forecasts are based on industry trends and involve variables and uncertainties. Consequently, TechTarget makes no warranty as to the
accuracy of specific forecasts, projections or predictive statements contained herein.

Any reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to persons not authorized to receive it, without the
express consent of TechTarget, is in violation of U.S. copyright law and will be subject to an action for civil damages and, if applicable, criminal prosecution. Should you have any
questions, please contact Client Relations at [email protected].

About Enterprise Strategy Group [email protected]

TechTarget’s Enterprise Strategy Group provides focused and actionable market intelligence, demand-side research, analyst advisory services,
GTM strategy guidance, solution validations, and custom content supporting enterprise technology buying and selling. www.esg-global.com 9