Understanding the TCO and ROI of Apache Kafka & Confluent
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For a product or service to be cost effective, it must be considered to be good value, where the benefits are worth at least what is paid for them. But how do we measure this, to prove the case? Given that value can be intangible, it can be hard to quantify and may have little relationship to cost. Added to this, the open source nature of Apache Kafka means that many companies skip the requirement to build a business case for it, until it has become mission critical and demands financial and human resources. In this presentation, Lyndon Hedderly, Team Lead of Business Value Consulting at Confluent, will cover how Confluent works with customers to measure the business value of data streaming
![Not quantified...
● Increased developer velocity → faster time to market
● Being more agile → greater business responsiveness
● Improvement on the business use-cases etc...
And what is the cost of doing nothing?
Further [intangible] Business Benefits
4. Soft Benefits](https://image.slidesharecdn.com/confluentvalueproposition-toview-200710091548/85/Understanding-the-TCO-and-ROI-of-Apache-Kafka-Confluent-21-320.jpg)
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Understanding the TCO and ROI of Apache Kafka & Confluent
- 1. Building Value - Understanding the TCO and ROI of Apache Kafka & Confluent Lyndon Hedderly, Customer Solutions Director
- 2. Agenda 2 01 What do we mean by business value & why measure it? 02 How to measure business value An example - Why Kafka / Why Event Streaming? 03 How to measure the value of Confluent - Confluent Platform - Confluent Cloud 04 Lessons learned & common questions 05 Discussion 12:00 - 12:30
- 4. What do we mean by business value?
- 5. Operational Efficiencies (cost savings / Risk Mitigation) Increasing Revenue (e.g. improving customer Experience) New Business Models (new revenue) 5 The Main Business Value Categories
- 7. ...Is the Investment the right one? Will it deliver the best return? How do we prioritise initiatives? ...Most importantly, organizations want to know value measurements in order to ensure they are delivered. ● Everest Group - 73%of enterprises digital transformation efforts failed to provide any business value. ● McKinsey - 70%of digital transformation initiatives fail to reach their stated goals, equating to over $900 billion worth of enterprise spend. ● IDC - $256 billion spent on digital initiatives across Europe, only 26%delivered an ROI. 7
- 8. How to measure business value? - Apache Kafka® / event streaming
- 9. $21 M in 2018 $80 M in 2007
- 10. Confluents Approach to Measuring Business Value 10 As-Is (Current) State + Negative Consequences (3 yr costs) Desired Solution 3 yr costs + Project Costs - Top-line business Benefits - Bottom-line Savings = Net Benefit Non-Financial Impact & Analysis: Incl. Scenarios, Sensitivities & Risks Proof-Points / Case Studies Metrics (definition of success) 5. Proof-Points4. Soft Benefits3. $ Benefits2. Target State1. Baseline
- 11. Example - ROI for major Bank 3 yr Net benefit: > $13M As-Is (Current) State + Negative Consequences (3 yr costs) Desired Solution 3 yr costs + Project Costs - Top-line business Benefits - Bottom-line Savings = Net Benefit Non-Financial Impact & Analysis: Incl. Scenarios, Sensitivities & Risks Proof-Points / Case Studies Metrics (definition of success) 5. Proof-Points4. Soft Benefits3. $ Benefits2. Target State1. Baseline
- 12. Current State Summary Mainframe API Calls API Calls on Mainframe - costs. $10.32M / yr Mainframe Costs + Failure Costs $1.56M / yr Cost of Failures ● Additional considerations with current state - Risk: ○ platform instability, ○ additional processing loads, ○ capacity issues, ○ security controls. API Call Type Details $ Cost / pcm $ Cost / per year Type 0 link $95,000 $1,140,000 Type 1 link $455,000 $5,460,000 Type 2 link $125,000 $1,500,000 Type 3 link $185,000 $2,220,000 Totals $860,000 $10,320,000 API failures pcm: No. $ Cost / pcm $ Cost / per year Cost = $50-$80 per failure $130,000 $1,560,000 1. Baseline
- 13. Current State Cost Summary API Mainframe Calls & API Failure rates: 3 Years. 1. Baseline
- 14. Event-streaming platform for Mainframe off-load / augmentation (Legacy modernization) Mainframe APACHE KAFKA ● Assume we can Off-load 50% of the Current API Calls - MIPS from the (DB2) Mainframe to read from a cache. So, reducing MIPS costs by 50% ○ Reducing mainframe reads / events (MIPS) ○ Reducing Annual Mainframe / MIPS costs by approx. $5.16M / yr (rough estimate to be ratified) ● Also assume failures decrease by 50% Reducing failure costs by $780K / yr ○ Also reducing risk: platform stability, processing loads, capacity issues, security controls. Off-load client e.g. Java Run API transactions through CDC to the Kafka Streaming Platform - reducing 50% of MIPS on mainframe; starting with Auth use case, then moving to Low, then Medium, then High volatility API calls. Target State Simpler API environment - reduced DevOps loads on APIs and reduced failures. 2. Target State
- 15. From Current State to Target State ● Modelled a reduction in each API Type (Mainframe MIPS cost) - of 50% ● Modelled a reduction in API Failure rates of 50% ● Spreadsheet attached to model variations 3. $ Benefits
- 16. From Current State to Target State Potential to save $17.82M over 3 years - API MIPS reduction + reduction in API Failure rates 3. $ Benefits
- 17. Target State - Investment Costs Investment Cost Categories Set-up Ops: Yr 1 Yr 2 Yr 3 Totals Set-up: Human Effort (Capex) $1,000,000 $1,000,000 Set-up: Human Effort - Partner / SI (Capex) $200,000 $200,000 Ops: Human Effort (Opex) $250,000 $250,000 $250,000 $750,000 Ops: Hardware & Software Costs (Opex) $250,000 $250,000 $250,000 $750,000 Confluent Subscription Investment $500,000 $500,000 $500,000 $1,500,000 Confluent Professional Services $50,000 $50,000 $100,000 Totals $1,750,000 $550,000 $1,000,000 $1,000,000 $4,300,000 2. Target State
- 18. Investment Costs 2. Target State
- 19. Net Benefit (benefits minus investment costs) Total 3 Year: Net benefit = $13.52M Project Costs = $4.3M Gross benefit = $17.82M 3. $ Benefits
- 20. Business Value - 3 Yrs... 3. $ Benefits Operational Efficiencies (cost savings / Risk Mitigation) Increasing Revenue (e.g. improving customer Experience) New Business Models (new revenue)
- 21. Not quantified... ● Increased developer velocity → faster time to market ● Being more agile → greater business responsiveness ● Improvement on the business use-cases etc... And what is the cost of doing nothing? Further [intangible] Business Benefits 4. Soft Benefits
- 22. The many different use cases for event streaming... $↑ $↓ $↔
- 23. How to Measure Business Value? - Confluent
- 25. Confluent Products: Software and SaaS 2525 Confluent Platform The Enterprise Distribution of Apache Kafka In the datacenter VM Confluent Cloud Apache Kafka Re-Engineered for the Cloud In the cloud Both: Subscription products where price scales with usage
- 26. Confluent Platform completes Apache Kafka with a full set of enterprise features and services Dynamic Performance & Elasticity Flexible DevOps Automation GUI-driven Mgmt & Monitoring Event Streaming Database Rich Pre-built Ecosystem Multi-language Development Global Resilience Data Compatibility Enterprise-grade Security TCO / ROI Revenue / Cost / Risk Impact Complete Engagement Model Efficient Operations at Scale Unrestricted Developer Productivity Production-stage Prerequisites Partnership for Business Success ARCHITECTOPERATORDEVELOPER EXECUTIVE Apache Kafka Committer-driven Expertise Training Partners Enterprise Support Professional Services
- 27. Confluent Platform impacts crucial cost & value drivers to help your business achieve its goals Reduced Operations Burden Improved Development Efficiency Lower Security Risk Minimal Downtime Lower TCO Higher ROI De-risked Investment Efficient Operations at Scale Unrestricted Developer Productivity Production-stage Prerequisites Partnership for Business Success ARCHITECTOPERATORDEVELOPER EXECUTIVE Apache Kafka Smaller Infrastructure Footprint Productivity improvements “Intangible” benefits Faster Time to Value Business outcomesInfrastructure savings
- 28. Confluent Platform subscription could reduce your 3 year TCO by up to ~40% 28 Cost Drivers for TCO 1. Infrastructure 2. Productivity a. Platform Development b. Platform Operations 3. Intangibles a. Downtime b. Security Risk 4. Confluent Subscription ~$3.6M overall TCO reduction (~40%) Illustrative cluster using Tiered Storage, Self-Balancing, Operator, RBAC, and more ILLUSTRATIVE
- 29. Confluent Platform subscription drives savings in infrastructure, productivity, and intangible costs 29 Infrastructure and Productivity savings ~$2.2M “Intangibles” ~$2.0M ILLUSTRATIVE
- 30. Infrastructure and Productivity costs ~$2.2M CP subscription pays for itself with savings in infrastructure and productivity costs alone 30 ILLUSTRATIVE
- 31. Confluent Products: Software and SaaS 3131 Confluent Platform The Enterprise Distribution of Apache Kafka In the datacenter VM Confluent Cloud Apache Kafka Re-Engineered for the Cloud In the cloud Both: Subscription products where price scales with usage
- 32. Cost of self-managed vs Confluent Cloud ~40-60% cost savings annually with Confluent Cloud $1.5M+ (68%)
- 33. Annual costs with self-management Maintaining a production-ready Kafka environment is complex and costly 1 2 3 $550K - $750K $800K - $1.1M $200K - $300K $1.6M - $2.2M The true cost of self-managing Kafka extends beyond the cost of software itself
- 34. 3-year cumulative TCO savings With Confluent Cloud, $10M+ (50%) in savings over three years $10M+
- 35. TCO is only part of the story… Accelerate & de-risk time-to-value, and maximize your ROI with Confluent Maximize return on investment Deliver higher returns with your project by launching faster and reducing operational burden Reduce total cost of ownership Operate more efficiently with lower infra cost, maintenance, and downtime risk Accelerate time-to-value Deploy Kafka at any scale with massively reduced timelines with Confluent
- 36. Lessons learned & some common questions
- 37. When should we measure business value? How long does it take to complete a business case? 37
- 38. What information is required? How do we ensure credibility / get estimates? - modeling a range 38
- 39. From 1 hr 21m to <50 mins = 30 mins saving / journey X £20 / hr (av. productivity) = £10 / journey X 3M journeys / yr = £30M / Yr, or £300M over 10 yrs. > £1Bn
- 40. Using a narrative, with visuals and data 40
- 41. Value can be subjective 41
- 44. Summary 44 01 What do we mean by business value & why measure it? 02 How to measure business value - Why Kafka? What Event Streaming? 03 How to measure the value of Confluent / Why Confluent? - Confluent Platform - Confluent Cloud 04 Lessons learned & common questions 05 Discussion 12:00 - 12:30
- 45. cnfl.io/meetups cnfl.io/slackcnfl.io/blog Thank you! For a conversation contact Lyndon@confluent.io Link to Project Metamorphosis https://www.confluent.io/blog/cost-effective-kafka-for-lower-tco/ Get a free TCO assessment https://www.confluent.io/project-metamorphosis/cost-effective/
- 46. Appendix Confluent Platform - Savings Examples
- 47. The Cost-Efficient Way to Deploy Kafka Confluent Platform (case study: top 20 bank) Confluent IP (Tiered Storage) reduced broker nodes ~70% Est. savings of $5M per year vs. Open Source AK Confluent Cloud (common scenario) 1 2 3 ⬇50 % Cloud Infrastructure Operational (FTE) Support and other spend Total self-managed Confluent Cloud Ask about our TCO Calculator...
- 48. Each Confluent Platform feature has targeted TCO benefits compared to DIY Apache Kafka Customer benefit Confluent Commercial Feature Feature description Global resilience Multi-region Clusters Simplified DR architecture with fully automated recovery to reduce operational complexity and minimize risk of downtime & data loss Dynamic perf. & elasticity Tiered Storage Offloading of older data to inexpensive object storage to reduce infrastructure costs Self-balancing Clusters Automated data balancing to optimize performance & eliminate complex manual tasks Enterprise-grade security RBAC Granular authorization of access by users/groups to prevent security breaches Audit Logs Observability of security-related user actions to simplify analyses and forensics Secret Protection Built-in encryption of sensitive information (e.g., passwords & other credentials) Rich, pre-built ecosystem Connectors 100+ pre-built, fully supported connectors, including S3, Elastic, HDFS, and JDBC GUI-driven mgmt. Control Center GUI to simplify operations at scale and to monitor adherence to pre-established SLAs Flexible DevOps automation Operator Kubernetes automation to accelerate time-to-value and improve DevOps agility Committer-driven expertise Support World’s foremost Kafka experts for support throughout the application lifecycle PS and Training Hands-on Kafka experts to ensure business maximizes value from event streaming 3. VALUE OF CONFLUENT PLATFORM
- 49. Each Confluent Platform feature has targeted TCO benefits compared to DIY Apache Kafka 49 Customer benefit Confluent Commercial Feature Infra- structure Platform Development Platform Operations Downtime Security Risk Time-to- Value Global resilience Multi-region Clusters ⬤ ⬤ ⬤ ⬤ Dynamic perf. & elasticity Tiered Storage ⬤ Self-balancing Clusters ⬤ ⬤ ⬤ Enterprise-grade security RBAC ⬤ ⬤ ⬤ Audit Logs ⬤ ⬤ ⬤ Secret Protection ⬤ ⬤ Rich, pre-built ecosystem Connectors ⬤ ⬤ GUI-driven mgmt. Control Center ⬤ ⬤ ⬤ Flexible DevOps automation Operator ⬤ ⬤ ⬤ Committer-driven expertise Support ⬤ ⬤ ⬤ ⬤ ⬤ PS and Training ⬤ ⬤ ⬤ ⬤ ⬤ 3. VALUE OF CONFLUENT PLATFORM
- 50. Platform Component Prod Node Count Infrastructure Costs1 Associated CP Component Prod Node Count Infrastructure Costs1 Rationale for TCO change Broker 9 $167K Tiered Storage; Self-Balancing 3 $44K Fewer, “lightweight” brokers ZooKeeper 5 $22K Multi-Region; Fewer Brokers 3 $13K Federated ZK over stretch cluster Connect 4 $23K RBAC 2 $12K Fewer, multi-tenant clusters Replicator / MM2 0 $0K Multi-Region 0 $0K No Connect cluster for replication REST Proxy 0 $0K NA 0 $0K NA Schema Registry 2 $3K NA 2 $3K NA ksqlDB 2 $12K NA 2 $12K NA Control Center 0 $0K NA 1 $7K Add’l node required for C3 Operator 0 $0K NA 1 $2K Kubernetes distribution Tiered Storage NA $0K NA NA $6K Enables “lightweight” brokers TOTAL 22 $258K 14 $129K Tiered Storage, Self-balancing, Multi-region Clusters, and RBAC can save ~50% in infra costs Yearly Infrastructure Requirements and Costs 1 - Aggregated costs across Prod, Pre-Prod, and Dev; Assumes GCP pricing w/ 20% discount; Networking Costs not allocated to any component but are included in TOTAL row Apache Kafka Confluent Platform ~$128K annual savings Infrastructure3. VALUE OF CONFLUENT PLATFORM
- 51. Platform Development Task Engineer- Months One Time or Recurring? Associated CP Component Est. Time Reduction from Component Cost Reduction Developer Kafka ramp up 1 per Eng One time PS, Training, Support 25% $17K Building connectors (design, develop, test, QA) 4 per connector One time Pre-built Connectors 100% $133K Maintaining connectors 1 per connector Recurring Pre-built Connectors 100% $100K Integrating with partition reassignment tool 1 One time Self-Balancing Clusters 100% $17K Deploying failover logic for multi-DC deployment (config MM2 and clients) 24 One time Multi-Region Clusters 100% $0K Building audit logs 24 One time Structured Audit Logs 100% $400K Integrations with APMs/OSS management tools and designing metrics dashboard 4 One time Control Center 50% $33K General development troubleshooting 8 Recurring Support 50% $200K Audit logs, connectors, and services can reduce platform development costs by ~40% Platform Development tasks with associated CP component $600K one time + $100K annual savings1 - Assumes 2 connectors to build and maintain Assumes 4 Dev FTEs at $200K / year Platform Development3. VALUE OF CONFLUENT PLATFORM
- 52. Platform Operations Task Engineer- Months One Time or Recurring? Associated CP Component Est. Time Reduction from Component Cost Reduction Architecture design 4 One time PS, Support 25% $25K Capacity planning 2 One time Operator, Tiered Storage, Self-Balancing 50% $25K Configuration and deployment 4 One time Operator, PS, Support 50% $50K Upgrading cluster 2 Recurring Operator 100% $150K Scaling cluster 2 Recurring Operator, Tiered Storage, Self-Balancing 100% $150K Disaster recovery 4 Recurring Multi-Region Clusters, Support 25% $75K Performance testing and monitoring 2 Recurring Control Center 25% $38K Day-to-day operations 6 Recurring Control Center, Training, Support 25% $113K Troubleshooting and maintenance 8 Recurring Control Center, PS, Training, Support 50% $300K Operator, Control Center, and services can cut ~50% of costs for platform operations Platform Operations Task with associated CP component 1 - Total of 24 Engineer-Months for 2 FTE were allocated among recurring tasks $100K one time + $275K annual savings Assumes 2 Operator FTEs at $300K / year Platform Operations3. VALUE OF CONFLUENT PLATFORM
- 53. Confluent Platform subscription also reduces the hidden costs of downtime and security breaches 53 3. VALUE OF CONFLUENT PLATFORM “Intangibles” ~$2.0M ILLUSTRATIVE
- 54. Uptime Downtime Cost per Year 97.0% $1.00M 97.5% $0.83M 98.0% $0.67M 98.5% $0.50M 99.0% $0.33M Multi-region Clusters, Control Center, & Support can greatly reduce risk of costly cluster downtime 54 Key Assumptions ● Estimate of downtime cost ● 97.5% uptime with DIY Apache Kafka ● Conservative estimate of ~1.5% improvement in uptime with CP subscription - Multi-Region Clusters, Control Center, Support, PS $3.8K Downtime Cost per Hour1 2 3 1 2 3 ~$500K annual savings Downtime Hidden costs of downtime 1. Reputation loss 2. Fines and audits 3. Reduced CSAT 4. Lost data 5. SLA penalties 3. VALUE OF CONFLUENT PLATFORM
- 55. Risk of Security Breach Yearly Cost of Security Breaches 4% $160K 8% $320K 12% $480K 16% $640K 20% $800K Confluent has a host of security features to prevent potentially catastrophic security breaches 55 Key Assumptions ● Estimate of Cost of Security breach - Based on IBM Cost of a Data Breach Study ● 16% Risk of Security Breach with Apache Kafka - Based on IBM Cost of a Data Breach Study ● Conservative estimate of ~4% reduction in risk of security breach with CP subscription - RBAC, Audit Logs, Secret Protection, PS, Support 1 2 2 3 Security risk ~$160K annual savings $4.0M Cost of Security Breach1 3 Hidden costs of security breaches 1. Reputation loss 2. Fines and audits 3. Reduced CSAT 3. VALUE OF CONFLUENT PLATFORM
- 56. Reduce TCO, accelerate & de-risk time-to-value, and maximize your ROI with Confluent Platform Maximize return on investment Achieve at least ~2.5x ROI on your Confluent Platform subscription and de-risk your Kafka project Reduce total cost of ownership Operate up to ~40% more efficiently with lower infra, productivity, and intangible costs Accelerate time-to-value Deploy Kafka at any scale ~6+ months faster with Confluent Platform 3. VALUE OF CONFLUENT PLATFORM
- 57. Time-to-value $10M $25M $50M 6 months $5.0M $12.5M $25.0M 9 months $7.5M $18.8M $37.5M 12 months $10.0M $25.0M $50.0M 15 months $12.5M $31.3M $62.5M Pre-built connectors, security features, and services can greatly accelerate time-to-value 57 Key Assumptions ● Value attached to project of $25M ● 12+ months to production with DIY Apache Kafka ● Reduced time-to-value of 6+ months with CP subscription ○ Security features, Operator, and Support can speed up at-scale Kafka deployment by ~50% ○ Pre-built connectors, Multi-Region Clusters, & Audit Logs allow developers to focus on building Kafka apps, not foundational tools / logic ○ ~40% of our PS customers say PS engagement alone saved them 4+ weeks of time Yearly value attached to Kafka project One-time Benefit of Improved Time-to-Value 1 2 3 1 2 3 Time-to-value ~$12.5M in value 3. VALUE OF CONFLUENT PLATFORM
- 58. Reduce TCO, accelerate & de-risk time-to-value, and maximize your ROI with Confluent Platform Maximize return on investment Achieve at least ~2.5x ROI on your Confluent Platform subscription and de-risk your Kafka project Reduce total cost of ownership Operate up to ~40% more efficiently with lower infra, productivity, and intangible costs Accelerate time-to-value Deploy Kafka at any scale ~6+ months faster with Confluent Platform 3. VALUE OF CONFLUENT PLATFORM
- 59. Confluent Platform Change from Apache Kafka Reduction in Infrastructure $0.4M 50% Reduction in Development $0.9M 40% Reduction in Operations $0.9M 50% Subscription Cost -$0.6M NA ROI on Subscription 2.5x NA Maximize return on investment Confluent helps accelerate time-to- value while reducing total cost of ownership, driving significant ROI ROI is even greater when accounting for intangible costs and benefits Reduced downtime Reduced security risk Accelerated time-to-value (Cost savings - Subscription) Subscription 3. VALUE OF CONFLUENT PLATFORM ILLUSTRATIVE
- 60. Not only will a Confluent Platform subscription drive a significantly positive ROI... ...Confluent will also de-risk and maximize the ROI of your event streaming use case 3. VALUE OF CONFLUENT PLATFORM
- 61. Appendix Confluent Cloud - Savings Examples
- 62. 62 Build more quickly and efficiently with Confluent Cloud platform benefits developer productivity time to market 3 2 1 Self-managed Kafka Confluent Cloud Manual sizing, provisioning, expansion, and maintenance of Kafka clusters Requires custom built tools, integrations, and capacity planning Instant cluster provisioning and scaling. Fully managed maintenance and upgrades. Fully managed tools and features (KSQL, Schema Registry, Connectors, Data flow UI) Point-to-point solutions, one-off integrations, exponentially increasing complexity to maintain service Data access across the organization and across apps on a universal event streaming platform
- 63. Go to market in 6 months vs. 2+ years Traditional Kafka Development Development with Confluent Cloud 6-9 months to hire Kafka resources 3 months to ramp Project Kickoff 9-12 months build the production-grade Kafka platform and develop application Start in 1 week 3-6 months to focus on app development, not managing Kafka Project Kickoff Launch your application in months and grow your business $$$ Go to market in 2 years Go to market in 6 months
- 64. Next-gen cybersecurity company built their massive scale (GBps+) threat intelligence app in 6 months vs. 2 years. Confluent Cloud customers often realize 50-75% reduction in time to market. Increase speed to market ⬇75% Leading financial institution launched their real-time market data service in 3 months vs. 1 year with alternatives. ⬇75% European web analytics company launched their ML application in 1 week. ⬇50% Time to market impact with Confluent Cloud
- 65. Instantly connect popular data sources & sinks 20+ Partner Supported (self-managed) Data Diode Confluent Supported (self-managed) 80+ Growing list of fully managed connectors (*preview) 10+ ** * ***
- 66. Enable event-driven app development on a common platform Hadoop ... Device Logs ... App ...MicroserviceMainframes Data Warehouse Splunk ... Data Stores Logs 3rd Party Apps Custom Apps / Microservices Real-time Inventory Real-time Fraud Detection Real-time Customer 360 Machine Learning Models Real-time Data Transformation ... Contextual Event-Driven Applications Universal Event Pipeline
- 67. 1 Infrastructure costs $0.5M - 0.75M annually Infrastructure costs are included with Confluent Cloud DELETE AFTER UPDATING SLIDE Update the range of $s above this box (“$0.4-1M annually”) Annual Infrastructure Costs Compute $50K - $100K Storage $150K - $200K Network $350K - $450K Total $550K - $750K
- 68. Successfully managing Kafka at scale has a large operational burden: 2 Operational costs $6-7M annually Reducing this operational burden allows engineers to focus on higher-value work such as: ● Tooling ● Architectural guidance ● Making Kafka efficient across the organization ● Transitioning infrastructure to the cloud Company Years Running Kafka Kafka and Support FTEs Approximate Annual Cost Transportation startup 6+ 75+ $20-30M Streaming content provider 5+ 50+ $15-20M Top 10 US bank 7+ 30+ $10M Social network 8 50+ $15-20M Company 2-3 13 $6-7M Confluent Cloud frees developers to focus on what matters most DELETE AFTER UPDATING SLIDE Update the range of $s above this box (“$6-7M annually”) Update the last row in the table on the right w/ your customer’s actual headcount and cost
- 69. Over 1 million hours of Kafka expertise Expert support engineers have solved tens of thousands of Kafka-related issues Covers Kafka issues and platform issues Access to experts who specialize in Kafka development; not just maintenance Committer-led support available 24/7 80% of Apache Kafka commits made by Confluent Employees $0.5-1M with 3rd party support Built in to Confluent Cloud* DELETE AFTER UPDATING SLIDE Update the range of $s above this box DELETE AFTER UPDATING SLIDE Update the range of $s below this box 3 Support and services Customers trust Confluent expertise to empower their most critical workloads $0.5 - 1M annually Confluent Cloud comes with 99.95% uptime SLA and managed upgrades * Developer support or higher required
- 70. Operational cost comparison ~40-60% cost savings annually with Confluent Cloud DELETE AFTER UPDATING SLIDE Update the range of %s below in the purple band (“~40-60%”) with the real range Self-Managed Confluent Cloud Infrastructure $0.6M - $0.8M Included Operational Costs $0.8M - $1.1M $150K - $250K Support Costs $0.4M - $0.6M Included Confluent Spend $400K - $550K Total $1.8M - $2.4M $550K - $800K
- 71. 3-year cumulative opex savings With Confluent Cloud, $2M+ (50%) in savings over three years $2M+DELETE AFTER UPDATING SLIDE Update the numbers to the right: “$10M+”. Either replace with text directly on this slide, or copy cell I5 from the google sheet “Slide 15…” DELETE AFTER UPDATING SLIDE Update the numbers below in the purple band (“$10M+ (50%)”) with the real numbers from the sheet “Slide 15…” in the google sheets workbook
- 72. Confluent Cloud delivers more value while reducing costs Increase speed to market Reduce total cost of ownership Maximize return on investment Reduce ongoing operating expenses Operate more efficiently with lower infra, maintenance, and development costs Minimize risk and indirect costs Maintain peak productivity with lower risk and higher service availability and quality
- 73. Indirect cost of risk Security infringement Performance degradation Downtime 3 2 1 Self-managed Kafka Confluent Cloud Significant investment required to maintain reliable platform operations Lost productivity due to prolonged incident diagnosis and resolution 99.95% uptime SLA. High availability, even during upgrades and planned maintenance Always-available 24/7 support and maintenance to prevent issues and recover more quickly High stakes operation to manage mission-critical infrastructure. Often complex and expensive to manage Enterprise grade security and compliance. Fully managed security at rest and in transit.
- 74. Confluent Cloud comes with 99.95% uptime SLA and managed upgrades $100M $1B $10B Revenue tied to Kafka Self-managed uptime (hours down per year) 98% 175 hours 99% 88 hours 99.9% 9 hours 99.95% 4 hours $2M $20M $200M $1M $10M $100M $100k $1M $10M $50k $500k $5M Hours lost and cost impact Confluent Cloud uptime SLA DELETE AFTER UPDATING SLIDE Update the range of $s above this box (“$2-3M annually”) Cost of Downtime Each minute of downtime represents lost revenue, reduced developer productivity, and lower customer satisfaction $2 - 3M annually
- 75. 5 incidents per year can costs $1.2M per year Performance degradation Even with minimal actual outage time, organizations suffer performance degradation that reduces developer productivity $1-2M annually ~$375k fully loaded cost per FTE = $1,500 per FTE per working day Ongoing cost of prevention and recovery: Hours of degradation Users impacted Hourly cost per user % productivity loss × × × 2,000 total employees × 25% software engineers × 25% work on Kafka-related projects = ~125 employees Customer example ~25% productivity loss due to performance degradation ~5 days of degradation per incident $230k per incident
- 76. Mitigate risk with enterprise-grade security and compliance Security infringement Security risks can impose significant costs to an organization in the form of detection and resolution, fines and reparations, and reputational harm to the business. On average, it costs a company $3-4M per data breach Source: IBM “Cost of a Data Breach Report”, 2019 Confluent Cloud security features Secure data against unwanted access ● Data at rest encryption ● Data in motion encryption ● Private networking connectivity1 Control access to cluster & resources ● SAML / SSO for user access ● API Keys for app access ● Access Control Lists (ACLs) Protect sensitive data in the cloud ● SOC 1, SOC 2, SOC 3 ● PCI, HIPAA1 ready, GDPR ready 1 Available on Dedicated clusters only
- 77. Confluent Cloud delivers more value while reducing costs Increase speed to market Reduce total cost of ownership Maximize return on investment Reduce ongoing operating expenses Operate more efficiently with lower infra, maintenance, and development costs Minimize risk and indirect costs Maintain peak productivity with lower risk and higher service availability and quality
- 78. Overall TCO comparison +80% TCO savings annually with Confluent Cloud DELETE AFTER UPDATING SLIDE Update the range of %s below in the purple band (“~40-60%”) with the real range Self-Managed Confluent Cloud Operating expenses Infrastructure $0.6M - $0.8M Included Operations $0.8M - $1.1M $0.2M - $250K Support and services $0.4M - $0.6M Included Indirect costs Downtime $2.1M - $2.8M $0.4M - $0.5M Performance degradation $1.0M - $1.4M n/a Confluent Spend $400K - $550K Total $4.8M - $6.5M $900K - $1.3M
- 79. Reduce total cost of ownership Operate more efficiently with lower infra cost, maintenance, and downtime risk Increase speed to market Deploy Kafka at scale within 1 week of starting with Confluent Accelerate and amplify business value creation Maximize return on investment Deliver higher returns with your project by launching faster and reducing operational burden
- 80. Maximize return on investment Confluent helps reduce time to market and total cost of ownership, leading to significant ROI improvement Self-managed Confluent Cloud Benefit with Confluent Initial app development $250k $250k No change Run-rate cost of Kafka ownership $300k $80k 80% lower cost First year revenue $0M $200k 75% lower time to market 3-year total revenue $1.9M $2.7M 44% higher revenue ROI* 50% 300% 6x higher ROI Illustrative Cumulative earnings (3 years) 6x higher return With Confluent Cloud Self-managed Methodology: ● Calculated as 3-year return on investment ● Assumes 25% COGS + 25% cost of Kafka in self-managed case; 25% COGS + 5% cost of Kafka in Confluent case ● Assumes 2 year time-to-market in self-managed case; 6 months in Confluent case ● Assumes 10% WACC SMALL EXAMPLE Use as appropriate
- 81. Maximize return on investment Confluent helps reduce time to market and total cost of ownership, leading to significant ROI improvement Self-managed Confluent Cloud Benefit with Confluent Initial app development $1MM $1MM No change Run-rate cost of Kafka ownership $1.3M $0.3M 80% lower cost First year revenue $0M $0.8M 75% lower time to market 3-year total revenue $7.5M $11M 44% higher revenue ROI* 50% 300% 6x higher ROI Illustrative Cumulative earnings (3 years) 6x higher return With Confluent Cloud Self-managed Methodology: ● Calculated as 3-year return on investment ● Assumes 25% COGS + 25% cost of Kafka in self-managed case; 25% COGS + 5% cost of Kafka in Confluent case ● Assumes 2 year time-to-market in self-managed case; 6 months in Confluent case ● Assumes 10% WACC MEDIUM EXAMPLE Use as appropriate
- 82. Maximize return on investment Confluent helps reduce time to market and total cost of ownership, leading to significant ROI improvement Self-managed Confluent Cloud Benefit with Confluent Initial app development $6MM $6MM No change Run-rate cost of Kafka ownership $10M $2M 80% lower cost First year revenue $0M $5M 75% lower time to market 3-year total revenue $45M $65M 44% higher revenue ROI* 50% 300% 6x higher ROI Illustrative Cumulative earnings (3 years) 6x higher return With Confluent Cloud Self-managed Methodology: ● Calculated as 3-year return on investment ● Assumes 25% COGS + 25% cost of Kafka in self-managed case; 25% COGS + 5% cost of Kafka in Confluent case ● Assumes 2 year time-to-market in self-managed case; 6 months in Confluent case ● Assumes 10% WACC LARGE EXAMPLE Use as appropriate