What Is the ROI of a Cloud Transformation?
As more and more organizations make the move to the cloud, it can be tricky to really pin down the value of that transformation. Moving to the cloud can be a daunting, costly, and time-consuming task, especially considering that any interruption in business-as-usual won’t be acceptable for customers or end users. While there are many ways to go about a cloud transformation (lift and shift, containerization, low code, etc.), replatforming is a tactic that can have a powerful end result. But, the prospect of going this route generates a lot of concern in many organizations.
Some of the questions that I am typically asked about replatforming are:
“What is the return on investment (ROI) for replatforming in the cloud?”
“How do you justify the cost?”
”What is the timeframe for ROI on a total rebuild?”
My answer to those questions starts with a number of lenses and approaches to looking at ROI in the first place:
- In the world of digital transformation, ROI isn’t solely about how much money a particular product makes, but the value of the whole customer experience. If one piece of the system is not performing, then a replatform can make a real difference in the overall experience and should be considered.
- Mergers and acquisitions are becoming more commonplace in the technology industry. In satisfying the due diligence required in such situations, a replatformed product is worth more and will perform better than an old, outdated, unscalable product. We have recently seen much more stringent technical due diligence, both in strategic acquisitions and in private equity. The ROI of replatforming? Looking good when your product is under review for acquisition.
- Partial replatforming with microservices provides a less risky approach and can easily lead to a complete re-platform over time, without a huge upfront budget. Replatforming doesn’t need to happen overnight or all at once, but taking steps toward it today will put you ahead in the future. A partial replatform allows you to reap the benefits of replatforming, without taking on all the risk that comes with completely rebuilding a product.
- Cost savings also have to be factored in. If a replatform is focused on the appropriate use of cloud technology then ROI needs to include those cost savings as well. When calculating the R in ROI ensure that you include cost savings from shutting down data centers, third party hosting, and co-location facilities that you currently use.
The Bottom Line
It’s becoming more critical for organizations of all sizes and industries to make the move to the Cloud, because the customer experience will soon depend on it. While there might be challenges and roadblocks, undergoing a cloud transformation is inevitable. Certainly, there is a significant ROI in replatforming, but take the time to consider all options, as every organization has different needs, “speeds,” and desired outcomes.
Looking for some help along your cloud transformation journey? The experts at Exadel are here to help. With our years of expertise across all cloud platforms and a strong innovation culture and process, we can work with you to integrate our complete Infrastructure-as-Code (IaC) solution, resulting in code that works just for you and is owned 100% by you. With our CrossKube solution, we can help get a Kubernetes environment up and running in the cloud fast. Reach out today to get started!