How do you calculate your savings or financial benefits while planning to migrate to the cloud?

2.9k views22 Comments

CTO in Software, 11 - 50 employees
If one expects savings from cloud migration then you are looking at this through the wrong lens and will most likely be very disappointed. Core benefits of cloud are agility and elasticity.
5 1 Reply
Vice President / IT Services / Digital Workplace leader in Software, 10,001+ employees

I read your comment after my Post and agree.  Costs are only one piece of the puzzle.  Competitive advantage, agility, scalability, etc are the key factors to consider.  Of course, cost always comes into it but in my experience, in most cases, the financial calculations don't even truly capture all the real costs moving to cloud.

VP of Global IT and Cybersecurity in Manufacturing, 501 - 1,000 employees
Agree with Mike. Always start with the why -  the where/what may not end up being a benefit or cost save at all, software can run anywhere, start with why. 

If you are looking at estimating the potential cost savings of using the AWS cloud vs. running workloads on-premises you may look at this tool -
CIO in Education, 1,001 - 5,000 employees
Agree with those that have commented so far. The cloud is less about the direct cost savings on core infrastructure, more about the indirect benefits that can be gained via agility, and ability to redirect internal labor to things that are more strategic.
ISSO/Systems Administrator in Manufacturing, 51 - 200 employees
For us, it is not about savings, but about reliability and uptime. Cloud isn't going to be necessarily cheaper.
COO in Healthcare and Biotech, 5,001 - 10,000 employees
Agree with all of the prior comments. With the exception of some very one-off and unique use cases such as seasonal applications (eg, flu shots, Super Bowl app, Thanksgiving or Christmas influenced apps), cost savings are not the driver to move to the cloud. Rather, it is flexibility of changes, nimbleness, agility, and a modern platform that can adapt. For that reason, systems that infrequently change are not good candidates for cloud migration. Not is a 100% cloud migration often a good goal. Most companies end up being hybrid, unless they started off cloud-native and never did any acquisitions of companies with “legacy” apps.
Enterprise Interaction Architect in Hardware, 10,001+ employees
Agree with the above, but also very much depends on how well you can account for your current (on-prem) costs, including indirect costs.  Also, to build on the other comments, how much downtime costs you now and other items that can be much harder to quantify - and therefore we approach them as a philosophy or principle.
VP, Technology Manager in Education, 10,001+ employees
Savings on cost of resources for application support.
VP, Technology Manager in Education, 10,001+ employees
We tend to see savings from increased uptime and smaller impacts for maintenance, but those that have been difficult to quantify.
ISSO and Director of the IRU in Healthcare and Biotech, 10,001+ employees
We calculate the savings based by scalability and realizability. Cloud infrastructure is just way easier and cheaper to keep up with the latest technology and infrastructure. We need to be able to rapidly scale up on some of our systems. The initial costs may be higher but the long term costs are more beneficial to us.
Vice President / IT Services / Digital Workplace leader in Software, 10,001+ employees
We look at all aspects of costs to include infrastructure, support costs, any potential rent savings if we no longer need space in a Datacenter or Co-Lo, potential power savings, etc.   There are some decent 3rd party companies that help do those calculations based on Energy usage, space, infrastructure, etc.   You have to be very careful though because there may still be a bottom line cost to the company (Rent for example) that doesn't go away just because you move it to the cloud. You really need to validate which are real savings vs potential savings and then make decisions.  

Sometimes its not even costs that are the overall benefits so you need to calculate if it gives you agility or competitive advantage which you can then tie back to a financial uptick.   All in all, if you are ONLY looking at financial savings, you are likely missing many other things to include in the decision making process.

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