The Business Value of Migration to Amazon Web Services
Published on 10 Oct 2022
The Cloud Value Framework helps enterprises to create a thorough business case for cloud computing by tracking their progress across four value dimensions. AWS Cloud Economics created the Cloud Value Framework after consulting with over 100 business clients and reviewing over 1,500 public AWS case studies. The findings reveal four major areas where AWS clients are gaining business benefits by migrating to cloud computing:
- Cost-cutting measures
- Employee Productivity
- Resilience in Operations
- Business Flexibility
This eBook includes an overview of how the cloud alters business and a study of the four Cloud Value Framework elements described above.
Recognizing Cloud Computing
Consider how the power-grid revolution transformed the industry to grasp the revolutionary potential of cloud computing. Before the widespread establishment of electrical utilities, businesses had to purchase and operate their generators to power their machinery. This necessitated a considerable upfront capital investment (capex) and continuous repair, maintenance, and replacement expenditures.
Perhaps most critically, it reduced company resilience, agility, and productivity.
Utilities eventually started generating energy centrally and selling it to companies through the power grid. Businesses might use utility-provided electricity not only to decrease expenses and capex but also to concentrate their energy and investment on increasing product quality, establishing better production processes, and servicing their consumers.
Now, fast forward to the twentieth-century computer revolution. Initially, businesses usually acquired, implemented, and maintained their computer resources. Establishing a data center, like building a power generator, needed significant upfront capital, a long procurement cycle, and the skills and personnel to manage it.
Just like the power grid allows businesses to get energy from a centralized provider, the internet allows them to access centralized computer resources such as AWS. As with an electric utility, businesses can avoid huge upfront hardware expenditures and pay for their use. These organizations could concentrate their personnel on differentiated and value-added work, increase the dependability and security of their power, and be more nimble and responsive to their consumers, in addition to lowering expenses.
Putting the Cloud Value Framework into Action
The Cloud Benefit Framework highlights how AWS migration generates quantitative value in addition to cost savings:
Savings on expenses
Capacity planning is often a key difficulty in conventional data centers. It requires precisely estimating technological requirements and buying equipment 6-9 months before operational. Furthermore, firms often provide 20-50 percent more than peak demand to minimize service failures. According to the Natural Resources Defense Council, typical server usage is just 12-18%.
Increased staff productivity is another method for clients to get value from AWS. Employees in the data center industry spend a lot of time on work that does not distinguish the company. Previously, for example, many employees would have been committed to acquiring, configuring, and maintaining physical servers.
Resilience in Operations
Unplanned outages caused by security breaches, hardware problems, software bugs, or human mistakes may be very costly. One IDC research, "DevOps and the Cost of Downtime: Fortune 1000 Best Practice Metrics Quantified," estimates that the average yearly cost of downtime for Fortune 1000 businesses is $1.25-$2.5 billion.
The existing IT approach hampers innovation. If a team wants to create a new application or service, it must provide resources to do so. This takes more time and money, delays the time to market, and reduces innovation budgets. Another major stumbling block is the cost of failure. For example, if a firm that uses on-premises infrastructure attempts and fails to launch a new product, it must maintain the gear acquired to operate the project.
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