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How Soon Will You Save Money When You Migrate to the Cloud?

Oct 13, 2023 | AWS, Cost Optimization, FinOps

If you’re considering migrating your organization’s infrastructure to the cloud, cost optimization is probably one of the big motivators. In a study by Enterprise Strategy Group, organizations that migrated to AWS from on-premises solutions saw a reduction of up to 66 percent in overall infrastructure costs. These substantial savings are just the tip of the iceberg, though, as the journey to the cloud promises even more financial benefits.

So, how fast can you start seeing an impact on how much money you’re spending? 

Short answer? Almost immediately. 

Longer answer? Cost savings when migrating to the cloud can begin right away with the elimination of on-premises infrastructure costs. As you optimize your cloud resources, leverage automation, and focus on operational efficiency, you can continue to save money in the long term as well. 

Ultimately, the speed at which your organization can save money in the cloud depends on how effectively you manage your cloud resources and take advantage of the cost-saving opportunities offered by your chosen cloud provider. In this blog, we will explore how quickly you can save money when you migrate to the cloud and what that process looks like. 

The Benefits of Cloud Migration

Migrating to the cloud is not just a trend; it’s a strategic move that organizations make to modernize their operations, cut operational costs, enhance agility, and ultimately boost their bottom line. A study conducted by The Hackett Group for Amazon Web Services (AWS) highlights the tangible benefits that businesses can achieve when migrating to the cloud. These benefits include the following:

    • 69 percent decrease in unplanned downtime
    • 43 percent lower time to market for new features
    • 29 percent increase in staff focus on innovation
  • 20 percent cost savings on technology infrastructure

When you migrate to the cloud, the speed at which you save money depends on various factors, including your organization’s specific needs, the size of your migration, and your approach to cost management. However, many businesses can begin realizing cost savings relatively quickly after migrating to the cloud. In the following sections, we’ll explore more about what this timeframe could look like.

Realizing the Immediate Benefits of Migrating to the Cloud

Cloud migration offers both short-term and long-term benefits that impact your bottom line. Some cost savings are immediate. By moving to the cloud, you eliminate the need for on-premises infrastructure, which includes expenses like purchasing and maintaining servers, data centers, and associated hardware. You also reduce the costs of managing, securing, and upgrading these resources. This can lead to immediate cost reductions—research suggests organizations using AWS Cloud instead of on-premises data centers cut their yearly IT expenditures by 25 percent.

Cloud migration also allows your IT staff to shift their focus from managing infrastructure to more strategic tasks. As a result, you can realize cost savings through improved operational efficiency and increased staff productivity. 

Cloud providers like AWS offer a pay-as-you-go pricing model. This means you only pay for the services and resources you use. There are no upfront capital expenditures, and you can scale resources up or down as needed. This cost flexibility begins immediately and continues throughout your cloud journey.

Long-Term Cost-Saving Perks 

While some cost savings are immediate or short-term, the long-term savings can be substantial. By reducing hardware, energy, and maintenance costs, you can achieve ongoing cost savings. Additionally, cloud providers often reduce their prices over time, further contributing to long-term cost reduction.

As you develop your infrastructure on the cloud, your cloud provider will offer a range of cost optimization tools that allow you to monitor and control your spending. By leveraging these tools, you can identify cost-saving opportunities and make adjustments as needed. Depending on the complexity of your environment, you may start realizing cost savings through optimization tools within the first few months or as you fine-tune your cloud deployment.

AWS also offers a range of automation tools to ensure that customers do not overspend. For example, solutions like Amazon Simple Storage Service (S3) Intelligent-Tiering automate data lifecycle management, saving customers substantial amounts in storage costs. This solution alone has saved customers $750 million in storage costs since 2018.

Finally, cloud migration can also lead to cost savings indirectly by fostering innovation and driving revenue growth. By freeing up resources and enabling faster time to market, you can create new products, improve customer experiences, and ultimately increase your bottom line.

Related: Unlocking Cost Savings and Efficiency: How Cloud Computing with AWS Empowers SMBs

Preparing for Cloud Migration

Before diving into cloud migration, it’s crucial to ask some foundational questions to assess your readiness. Identified by AWS, these questions serve as a guideline for aligning your business goals with the potential benefits of migrating to the cloud:

  1. Innovation and Speed-to-Market: Are your on-premises systems hindering your ability to innovate, develop new products, and deliver a superior customer experience?
  2. Cost Savings and Productivity: Could you save time and money by migrating to the cloud and freeing your team from managing hardware, software, licenses, security, and compliance?
  3. Infrastructure and Business Systems: Is your current infrastructure performing at its peak and delivering the insights needed to compete effectively?
  4. Skill Gaps and Modernization: Does your team have the necessary skills for a seamless migration, or should you consider engaging with experts or third-party vendors for assistance?

Related: Simplifying AWS Cloud Migration: 3 Phases for Success in the Cloud

nClouds can Help

According to a survey by Gartner, 47 percent of organizations lack the skills and expertise to manage their cloud environments. Partnering with an AWS consulting partner can provide ongoing support and help fill that skills gap. Migrating to AWS with nClouds offers several benefits, including expertise, cost-effectiveness, scalability, security, and ongoing support.

If you’re considering a move to AWS, partnering with nClouds can help ensure a successful migration and a smooth transition to the cloud. Contact us to get a free Fast Path for Migration Readiness by nClouds.

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nClouds is a cloud-native services company that helps organizations maximize site uptime, performance, stability, and support, bringing out the best of their people and technology using AWS