The Doppler Quarterly Special Edition 2019 | Page 44

CASE STUDY
25% Savings in 18 Months
A multinational software and manufacturing firm faced rapidly growing IT operating
costs tied to its legacy IT outsourcing provider. With a monthly IT spend of $14.5M, the
company identified cloud adoption as a key driver for cost reduction. To determine the
potential savings, CTP conducted a TCO study comparing the current environment to
target cloud endpoints. In the graph below, we show the company’s 18-month TCO. In
this case, the TCO compares using an IT outsource model vs. a hybrid cloud (public
cloud services + an IT outsource provider). This TCO model calculates a payback period
of 6 months for a hybrid environment, with savings growing to $4M per month (25
percent reduction) at month 18.
Monthly TCO: IT Outsource vs Hybrid (Cloud + Outsource)
Figure 3: 18-Month TCO for an enterprise manufacturing company
highlighting growth to a 25% savings.
The next graph shows the company’s total run rate comparison between lift-and-shift
vs refactoring vs colocation for a single enterprise application. Note that the run rate for
colocation is lower, at first, in this model. However, it goes up significantly over time, rel-
ative to the cloud run rate which does not grow at the same rate, and in many cases
shifts downward as the cost of compute and storage declines over time.
42 | THE DOPPLER | SPECIAL EDITION 2019