Your Roadmap to Azure Savings
Saving money has always been a primary motivation behind any cloud strategy. But exactly how will your organization benefit financially from a public cloud solution such as Microsoft Azure?
Will the ROI come primarily from the reductions in hardware costs? Fewer dollars going to personnel, rent, power and climate control? Or will the payback be less about reduced costs and more about the increased sales you might obtain by streamlining cumbersome business processes or delivering better customer experiences?
All good questions. For answers that might help you get your Azure cloud strategy on the right financial footing, take advantage of the Navisite white paper—Your Roadmap to Azure Savings: Getting Full Value From Your Investment in Azure, which uses data drawn from a series of Total Economic Impact studies of Azure prepared by Forrester to chart typical ROI scenarios. You can download the white paper here.
Many attempts at measuring the value of IT investments have foundered because of over-reliance on financial metrics that are generally too limited to fully capture the strategic benefits IT delivers in terms of innovation or customer experience. The Forrester TEI model is designed to provide a more holistic look. The Forrester TEI studies are based on extensive research on the behavior of actual Azure users combined with risk-adjusted estimates of costs and benefits that Forrester calculated using its proprietary TEI methodology. Forrester has used its TEI model to study a wide range of IT solutions, including at least five studies on Microsoft Azure: IaaS, PaaS, SQL Database, SQL Warehouse and Cloudyn cost management The result is one of the most complete pictures you will find anywhere of the financial returns that are possible with Azure.
Here are some overall observations from the several Azure TEI studies Forrester has conducted:
Resource reductions generate the biggest savings: The use of the cloud to lower the amount of on-premises resource investment, including data centers, server administration and testing, typically accounts for for the largest portion of the savings in the case of both IaaS and PaaS.
Speed delivers value: The rapidity with which infrastructure can be acquired, new processes implemented, or new services developed was repeatedly cited as a major benefit that contributes significantly to ROI calculations (e.g., faster retiring of data centers or more sales per year, or the ability to spin up resources on an as-needed basis).
Faster, simpler testing: PaaS makes it possible to quickly create test environments that directly match development and production environments. The spin-up is much faster, testing can start immediately, and there is no need to go back in and do regression testing when there is a platform change. When the testing is complete, you can turn off the environment.
Streamlining future app development: One user interviewed by Forrester suggested that its future apps would be developed 3–10 times faster than those of other companies because of the experience it had already gained with Azure.
The long tail of existing resources: It inevitably takes time to wind down data centers or get out of outsourcing contracts, which reduces returns. Large organizations, in particular, will be operating in both modes for years to come, and possibly forever. In the case of the IaaS study, the applications that were transferred to the cloud via lift-and-shift were likely the easiest and least risky to move. ROI will inevitably decline for later, more difficult applications.
A well-executed cloud strategy can help you reduce IT spending, streamline cumbersome business processes and realize significant increases in sales and profits. To maximize your ROI, you will want to aim to hit the mark in all those areas. And while you are doing that, you will want to pay careful attention to how you are managing your cloud investment.
According to some analysts, making effective use of the on-demand nature of the cloud (and not being forced to maintain excess server capacity) accounts for the largest portion of the 30–40% cost-of-ownership advantage that the cloud has over on-premises deployments There is a growing consensus that by not paying enough attention to right-sizing their cloud VMs and performing basic cloud housekeeping (e.g., shutting off unused cloud services), today's cloud users are significantly overspending.
For more insight on exactly how the financial benefits of Azure will play out in your organization, talk to Navisite. Helping organizations get a realistic understanding of costs and benefits of Azure is a key part of how we can help you.
As one of a very select group of some 40 Azure Expert Managed Service Providers (MSPs), we have extensive experience helping organizations of all kinds get as much as they can from their Azure investments.
If your organization is looking to navigate the journey to Azure, contact us today to see how Navisite's Azure Management Services can help you fully map out and plan that process, or call us directly at (888) 298-8222 to learn more.