Business value is all about understanding what drives cloud adoption, why it matters to customers, and the tangible outcomes businesses can achieve. The concept of business value helps determine the long-term health and well-being of a business, including but not limited to its economic value. It might show up as reduced costs, freed up resources, reduced downtime, and improved decision-making.

AWS Cloud Economics developed the Cloud Value Framework as a conceptual structure intended to build a comprehensive business case for cloud adoption and helps articulate the value of adopting the cloud. It does this by measuring and tracking progress of customers who migrated to AWS against four key pillars of value:

Cost savings

Staff Productivity

Operational resilience

Business agility

Most customers begin their cloud journey focused on cost savings. However, they typically see the most long-term benefits in the other pillars. In this module, we dive deeper into each of the four pillars and how they contribute to cloud value.

One way we can quantify a projection of business value efficiently is through value benchmarking. Benchmarking helps us inform customers about what their peers are doing in an objective, data-driven way. Benchmarking quantifies real customer outcomes through:

Commissioned research studies across large populations of AWS customers.

Deep dive interviews and research 1:1 with customers post-migration.

1. Cost Savings

As a customer cloud journey progresses, customers typically think about cost savings in two ways:

Maintaining or reducing total AWS spend, regardless of usage.

Allowing costs to rise in response to increased demand.

Organizations see cost savings as decreases in IT spend and infrastructure spend. After migrating to AWS, customers can observe a 4% decrease in the total IT spend as a percentage of revenue and a 20% decrease in the total infrastructure spend as a percentage. Cost reductions can continue as customers migrate to additional AWS cloud services.

This chart shows how costs continue to go down (blue bars) as customers transition more fully to cloud (gray bars).

As a customer cloud journey progresses, customers typically think about cost savings in two ways:

Maintain or reduce total AWS spend regardless of usage

Allow costs to rise in response to increased demand

After migration to AWS, organizations see improved staff productivity across many areas of the business including admin management capacity, focus on strategic work, and ability to focus on new feature development.

The tasks a server administrator might be performing with on-premises hardware. When moved to AWS, tasks such as hardware repair and server planning might be reduced or eliminated altogether, freeing up capacity for staff to focus on more strategic work. In this example, we’re looking at a subset of tasks that a server administrator would be performing. A server administrators responsibilities will vary by organization. Along with the tasks, we indicate the typical reduction in time spent on the task, based on what other AWS customers have achieved.

The business value that the cloud generates in the form of resiliency includes increased system availability, reduced latency, higher SLA achievement, and better security.

Businesses see this through increased availability, improved security, and reduced unplanned outages. These variables have significant financial implications but quantifying them can be difficult. They also require some understanding of the cost of unplanned outages and service interruptions.

These figures are important for awareness about the cost of downtime and unplanned outages.

Operational resilience is important because the cost of downtime and security breaches can be high, as shown in the graphic. Analysts, like IDC, say that critical application outages can have a billion-dollar-impact on organizations annually. These figures highlight the importance of creating customer awareness.

Agility refers to the ability to respond quickly and effectively to changes in business conditions or disruptive business events. Winning in a digitally competitive industry or market depends heavily on agility in product development.

Business agility promotes more experimentation, which increases the pace of innovation. As innovation increases, risk of high-cost, late-stage failure reduces.

Here are some additional benefits of business agility:

Simplify requirement design by using built-in operational solutions (for example, scaling and security). Deliver cloud-native products using hundreds of AWS and third-party solutions.

Increase the speed to build and test through continuous integration and delivery pipelines. Lower the cost of experimentation by spinning up or shutting down services quickly.

Reduce maintenance cost and simplify operations with AWS providing IT infrastructure services and AWS or third-party managed services options.

Eliminate deployment wait time with automated application development and smaller deployment batches.

We have covered in this blog the value of cloud management in business and how it benefits the business in various value benchmarks and also in the value framework.

Author Name

Vaishnavi Shetty