Return on Investment Profile: Microsoft SharePoint Portal Server

Prepared by Nucleus Research Staff
April 2001

The Company

Rare Medium is a consulting and investment company focused on Internet services technologies. The company has developed web business plans, on-line brand strategies, broadband and wireless content, and other initiatives for clients including Betty Crocker, Microsoft, Epson, and Stride-Rite. Rare Medium also incubates, invests in, and manages private companies with Internet-focused business models. Rare Medium's team of about 1100 engineers, designers, user interface experts, and sales and administrative personnel work in offices across the United States and in London and Singapore.

The Challenge

Effective project management and innovation are key to Rare Medium's success. To facilitate collaboration and knowledge management, Rare Medium built an intranet running on Microsoft IIS and a number of different applications including Knowledge Track's Knowledge Center, Orbital software, and IFM/Lotus QuickPlace. One-third of the compant's employees are engineers and programmers, so different teams had found systems that worked for them, including shared drives and Web sites - and could write links and viewers to different systems as needed.

As Rare Medium grew, it outgrew its intranet. Those responsible for managing documents were overwhelmed as the volume of information increased, causing bottlenecks. Difficulties in integrating QuickPlace with Exchange and Active Directory made expanding QuickPlace for information sharing an unlikely enterprise solution. Employees were spending more time searching for information they needed as groups found creative yet isolated solutions to their collaboration needs. Rare Medium's recognition that it needed a new system for collaboration and information sharing was driven home by plans to purchase and integrate a new human resources application. Rare Medium needed an application to share and version information in a flexible way that could also be easily linked to other systems and tools.

The Strategy

Rare Medium started looking at the offerings of portal vendors including Brio and Plumtree in the fall of 2000. Because Microsoft had a close relationship with the company, it learned of Rare Medium's search for a better system and suggested it consider the SharePoint Portal (then Tahoe). Late in 2000, Rare Medium tested SharePoint Portal release candidate 1 beta and decided to become an early adopter. On January 1, 2001, Rare Medium replaced its intranet and Knowledge Center with SharePoint Protal RC1 beta. The company has continued to add content and features to SharePoint Portal since January, and is planning to move to SharePoint Portal RC2 beta in April. Web parts link Rare Medium's human resources system, a professional services automation tool, and the QuickPlace sites into SharePoint Portal.

As they are using an early release, Rare Medium's strategy has been to manage expectations of users by providing content and new Web parts as needed - but not to announce a timeline or plan for the future of SharePoint within the organization.

Key Benefit Areas

The company recognized the following key benefits from moving to SharePoint Portal:

  • Increased productivity. Rapid searchable access to information, proper version control, and integration of data and information from various sources into one portal has reduced the time Rare Medium employees spend searching for information and verifying its integrity. The company's emphasis on billable hours and internal utilization factors means much of that saved time has had an impact on productivity.
  • Reduced IT support costs. Rare Medium's old mix of systems required a lot of maintenance to keep them working together and detective work to figure out what to do when they didn't. Now IT personnel can focus on building other projects instead of supporting the intranet.

Key Cost Areas

Ongoing personnel costs associated with indexing information into SharePoint Portal make up the largest cost item in RareMedium's budget. Other organizations with a less technically savvy user group - or with user barriers to sharing information - may spend more on training and promotion of the application.

Lessons Learned

Rare Medium believes that SharePoint Portal's basic environment - even in its beta form - is a good intranet portal starter kit. The packaged themes and templates provide a basic framework, and Front Page-like tools have enabled Rare Medium to devolve some application updating responsibilities to administrative - not IT - staff. Rare Medium will continue to watch the development of product releases for improvements in the following:

  • Indexing. Improvements in the indexing reliability of SharePoint Portal should drive reductions in the amount of time needed to index and re-index documents.
  • Advanced folder features. Because RC1 requires admins to set folder features before entering documents, folder re-building may be necessary if advanced feature needs are discovered later.
  • Web crawling. The greater the level of granularity in the Web crawling functionality, the more rapidly an organization can add information to SharePoint Portal - without exposing confidential or "hidden" drive files to potential security risks or unauthorized access.
  • Subscriptions and applications. As subscriptions and application views are key to the effectiveness of SharePoint Portal, Rare Medium and other customers should investigate the availability of Web parts and subscriptions for their specific needs.

Calculating the ROI

Rare Medium's return has come from two main areas: reduction of maintenance costs by replacing a number of different custom-linked systems with one coherent one, and increased user productivity from a centralized collaboration and information organization. Rare Medium is a Microsoft Gold Certified Partner, and as an early adopter had internal Microsoft expertise and free software that most regular customers wouldn't. The cost and benefit estimates of Rare Medium's SharePoint Portal project have been adjusted using Nucleus Research metrics to account for amounts that may have been reasonably associated with the project had Rare Medium not been a close Microsoft Partner. These adjustments include an increase in the consulting and software costs required to deploy SharePoint Portal.

See Rare Medium ROI Analysis.

Ian Campbell, Vice President, Nucleus Research gave permission to use this case study at DSSResources.COM on Wednesday, April 18, 2001. For more information check Posted May 5, 2001. A PDF version of this case is available at