Cloud technology is undoubtedly a technological marvel of the 20th century. Though the advantages of cloud migration are many, businesses need to primarily consider ROI specifying factors before making this move. These include some factors like key cost reduction, productivity enhancements and revenue transformation.
Generally the revenue from the cloud is calculated as the difference between the benefits that cloud offers and the cost for migration.
To determine the ROI, companies should use the existing application costs as the standard and decide the suitability of migrating to the cloud. Assessing this migration involves considering things like
- Knowing which applications will be deployed to the cloud
- Studying the workloads and requirements of each application
- Identify the strategy you can use on-premise cloud or PaaS
Cost savings from the cloud
Categorizing and estimating rough costs of the applications are your best bets to for possible cost savings. You can generate an ROI of close to 50 percent from a tier 1 workload and an ROI of 70 percent from a tier 3 workload.
The average expenditure for cloud software is 16% of the total IT expense. Due to great flexibility , you can continue to use your software from anywhere in the world, with any system. This means that you will spend less on software licensing. Transforming fixed-cost software licensing model to subscription based recurring cost model is targeted at much better revenue.
Productivity from cloud affects ROI directly. Building applications upon PaaS requires 25 –50 percent lesser effort. Maintenance is at a reduced spending of 20 percent less.
Infrastructure costs by 30 percent less with the help of automated scripts, use of standard stacks, reusable components, and open-source tools.
Cloud-based developers become highly agile and productive with the use of PaaS, which essentially provides the entire set of services that one needs for developing a full-fledged application. In addition to this, maintenance and infrastructure improvements are part of the productivity improvement that gives cloud ROI improvement.
Cloud Computing Services can be quite productive for any organization as you can see. The assessment of ROI of moving to the cloud may be a process that takes into account a large number of factors some of which were outlined here. However, it is every bit worthwhile to get a clear understanding of which cloud service you should adopt.