The report was based on in-depth interviews with 11 AWS customers. The goal was to find out the long term economic benefits, which include business agility, developer productivity, and the business opportunities that arise from IT being freed from tactical routine work and able to focus on strategic, leading edge technologies.
“Overall, the organizations interviewed recognized annual financial benefits averaging over $518,000 per application. The most significant benefit comes from moving applications onto AWS infrastructure due to lower capital and operational costs. This reduction in capex and opex accounted for over 50% of the overall benefits found in the study. IDC observed significantly increased developer productivity on Amazon cloud infrastructure services compared with prior implementations,” IDC said. “The companies interviewed experienced greater developer productivity across all of the key software development life-cycle activities, which was a direct result of the extensive development and runtime services that are provided by Amazon cloud infrastructure services. Developer and IT staff productivity accounted for nearly 30% of overall financial benefits.”
While some strategic thinking can come from a freed up IT staff, AWS itself encourages experimentation and leading-edge thinking by easing the testing and implementation of new business models.
It Just Gets Better and Better
The big surprise was just how all these benefits increase the longer you use AWS. “There is a definite correlation between the length of time customers have been using Amazon cloud services infrastructure and their returns. At 36 months, the organizations are realizing $3.50 in benefits for every $1.00 invested in AWS; at 60 months, they are realizing $8.40 for every $1.00 invested. This relationship between length of time using Amazon cloud infrastructure services and the customers’ accelerating returns is due to customers leveraging the more optimized environment to generate more applications along a learning curve,” IDC said.
TCO is also a high point, as AWS cost 72% less than an on-premises app over the course of five years. Over that same five years, your ROI should be around 626%, and the payback period is a scant seven months.
Nucleus Research took a similar look at AWS economics (run link here), and found a big part of the value came from increased uptime. IDC was likewise impressed. “End users benefited from fewer service disruptions and quicker recovery on Amazon cloud infrastructure services, reducing downtime by 72% and improving application availability by an average of 3.9 hours per user per year,” IDC found.
AWS can have a big impact on DevOps too. On the IT side, productivity went up 52%. Developers can be far more productive, with the hours needed to produce the same value shrinking by 80%.