Cloud Maturity Drives Significant Benefits

Increasing Cloud Adoption Drives Significant KPI Improvements

IDC Business Value Research conducted for this study shows that cloud adoption is improving key business outcomes across the board.

There are significant business benefits of moving up the cloud maturity scale (Table). IDC determined that organizations can achieve double-digit improvements in IT costs, strategic allocation of IT budget, customer experience, and ability to meet SLAs by moving from an Ad Hoc cloud strategy to Opportunistic, and similar or greater gains from moving from Opportunistic to Repeatable. They can even achieve single-digit increases in topline revenue.

Importantly, while the benefits accrue to everyone, they accelerate as you move up the adoption scale. Even those who are Ad Hoc should be able to achieve benefits by moving to Opportunistic, but the greatest benefits are found the higher you go on the adoption curve.

Table 1: Increasing Cloud Adoption Can Yield Significant Benefits

Mature Cloud Adopters Are Achieving Millions of Dollars in Benefits

This study quantified the economic benefits the most mature cloud organizations are realizing, broken down by category (Figure 3). On average, organizations studied are gaining $1.6 million in additional revenues per application deployed on private or public cloud and $1.2 million in cost reduction from leveraging cloud adoption to enable better business outcomes.

The revenue increases were largely the result of sales of new products and services, gaining new customers, or selling into new markets. Of particular note, revenue gains were attributed to:

  • Increased innovation resulting from shifting IT resources from traditional maintenance activities to new, more strategic innovative initiatives.
  • “Internet of Things” (connected devices with IP addresses that are not traditional computer or mobile devices). In these cases cloud enabled companies to launch IoT products faster and made it easier to roll out platforms, scale those platforms for more users, and get development environments up and running faster.

Operational cost reductions stem from running the business on a more scalable, reliable and higher performing environment. These include:

  • Improved agility. Cloud enables IT to develop and deploy business applications faster, which in turn helps the business reduce costs associated with new products and services dependent on those business applications.
  • Increased employee productivity. Cloud enables employees to enjoy more reliable access to key business applications from any location, at any time, and using any device - resulting in more efficient use of time.
  • Risk mitigation. Cloud enables more consistent and reliable application availability, reducing the costs of unplanned downtime and data recovery.
  • Infrastructure cost savings. Cloud enables more automated and efficient infrastructure, providing a consistent platform and allowing organizations to scale without having to over-provision up front or add expensive resources.
  • Open source benefits. Cloud enables open source, which provides infrastructure cost advantages, avoidance of hypervisor costs, and technical advantages associated with a big code base resource pool that can be repurposed.