The graph below shows the company ’ s total run rate comparison between liftand-shift vs refactoring vs colocation for a single enterprise application . Note that the run rate for co-location is lower , at first , in this model . However , it goes up significantly over time , relative 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 .
For this application , payback is at 6 months if the application is lift-and-shifted , or a 18 months if the application requires a major refactoring . Of course the cost of migration , whether it be lift-and-shift or refactoring , impacts the savings and when they are realized . Keep in mind that you need to consider the existing and future run rates of each approach prior to making your final decision .
Total Run Rate Comparison for a Single Enterprise Application
Application-level analysis for a single enterprise application . We see that this type of application-level analysis enables granular and data-driven justification for additional investments in cloud .
What ’ s Next ?
Cloud provides the perfect opportunity to change the way your organization runs IT . With cloud , IT has a much more positive influence on the business and is better aligned with strategic goals . IT will no longer be a drain on company resources , and many enterprises will find that the newfound efficiency and agility of cloud adds huge value to their bottom line . After all , IT is there to serve the business , not the other way around .
While few will dispute the hard cost savings of cloud , there is always a need to create a compelling business case that clearly defines the value of agility and other soft benefits . While it is important to remember that there are rare scenarios where cloud does not make economic sense , generally , you ’ ll find a strong ROI and reduced TCO . Ultimately , you won ’ t know the full costs and benefits until you define your business case and run the models .
52 | THE DOPPLER | SPRING 2016