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Tomlinson Real Estate Group, one of 2nd Watch’s clients, recently participated in an IDC White Paper. Daily I am amazed by the divergence between the “old way” and the “new way”. At times this is a way of thinking or how we leverage technology, either way I notice that resisence to the “new way” can be a barrier to growth and profitablity. This is not to say that companies should rush out and fork lift everything to the cloud. However, if companies are not seriously looking at the cost savings and ROI from moving to the cloud, and looking with clear lenses, then they may be left behind in the next 10 years. The IDC report is a comprehensive view on what companies are realizing by moving to the cloud. Enjoy – Jeff
New IDC White Paper – Business Value of Amazon Web Services Accelerates Over Time
Analysts Randy Perry and Stephen Hendrick of IDC have just published a commissioned white paper titled The Business Value of Amazon Web Services Accelerates Over Time. You can download the paper now by clicking on the link to AWS blog http://aws.typepad.com/aws/2012/07/new-idc-white-paper-business-value-of-amazon-web-services-accelerates-over-time.html
Earlier this year, IDC interviewed 11 organizations that use AWS in an effort to understand the long-term economic implications of moving their workloads to the cloud. As part of the study they also looked for changes in developer productivity, business agility, and the ability to deliver new applications that could be attributed to AWS. The AWS customers that they talked to included Samsung, BankInter, Fox, Netflix, Tomlinson Real Estate Group, United States Tennis Association, and Cycle Computing.
The paper contains a complete recitation of their findings. To summarize:
- The five-year TCO of developing, deploying, and managing critical applications on AWS represents a 70% savings compared to deploying the same resources on-premises or in hosted environments.
- The average five-year ROI from using AWS is 626%. Interestingly enough, the return grows (when measured in dollars of benefit for each dollar invested) over time. After 36 months, the organizations interviewed were realizing $3.50 in benefits for each $1 invested in AWS. After 60 months, the benefit grew to $8.40 for every $1 invested.
- Over a five year period, the companies saw cumulative savings that averaged over $2.5 million per application. This included savings in development and deployment costs (reduced by 80%), application management costs (reduced by 52%), and infrastructure support costs (reduced by 56%). Again on average, these organizations were able to replace $1.6 million in infrastructure with $302,000 in AWS costs.