Organizations See Cloud Benefits Beyond Cost Reduction

By Greg Tavarez, TMCnet Editor  |  October 20, 2022

Cloud is the foundation for digital business and is the standard platform for today’s as-a-service delivery models. Understanding cloud is more than a scalable alternative to on-premises infrastructure technology, organizations accelerated their legacy migration to cloud. In two to three years, 70% of all technology infrastructure will be cloud-based, according to The Hackett Group’s recent study, the Cloud Services Study.

Sure, the most common objective for cloud migration among companies is cost reduction – and for good reason. The study showed that typical companies will see post-migration reduction in technology infrastructure costs of 12%.

Other benefits of switching to the cloud, though, include a 36% increase in developer time devoted to innovation, a reduction in time to market for new product features and functionality, as well as a reduction in downtime by 52%.

However, top performers see even greater benefits based on the study. For example, compared to the 12% reduction in technology infrastructure costs, top performers saw a 37% reduction. Top performers also saw a 57% decrease in time to market for new application features or functionality compared to 53% for typical companies.

Even when it comes to cybersecurity, top performers are reaping more benefits. Security was a big concern in the early days of public cloud hosting. As concerns diminished with cybersecurity proving to be more robust and effective than in-house capabilities, a little less than half among typical companies made cybersecurity a goal compared to 61% of top performers.

Why are the top performers in the study seeing more benefits? Well, the peer group reflects their cloud migration goal from a legacy perspective. This means when they set out to migrate to the cloud, theier goals were focused more on cost reduction. Top performers, on the other hand, realize that cloud will facilitate improvements to applications and provide a better service experience because of fewer system disruptions. 

“To truly drive the maximum benefit, top performers make the cloud part of their operating DNA and treat it as a core competitive strategy,” said The Hackett Group Principal Michael Spires. “They assess their workloads to determine the proper migration methodology and focus on optimizing them in the cloud.”

The Cloud Services Study, splitting peer groups and top performers, was designed as the first step in a five-year investigation to help companies understand cloud migration and ongoing management of costs, value, performance and experience.

“This study was designed to look beyond the hype and truly quantify the benefits of both moving to the cloud and maximizing the benefits of cloud infrastructure,” said The Hackett Group Principal Michael Fuller. “The results clearly show that companies are using the cloud to deliver broad strategic value.”

The bottom line is that, yes, nearly every company will enjoy benefits when moving to the cloud, but those that prioritize cloud as a strategic objective, will increase see greater gains in productivity, efficiency, and business results.

Edited by Erik Linask
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