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Lowering TCO | Maximizing Business Value with AWS

Posted on May 2, 2019 by MarkRichmanMarkRichman

In this blog series, I’ve covered how organizations that adopt Amazon Web Services empower themselves to drive measurable business success through cost savings, cost avoidance, and operational resilience, with dramatic reductions in downtime, improved resource efficiency at the task level, and greatly enhanced business agility.

Now, let’s discuss how these benefits are realized in practice.

Reduce and Simplify Your Application Stack

So how do these cost savings actually work in practice?

In a typical application, either run in a traditional datacenter or colocation facility, you’re paying for the application itself, the underlying OS, hypervisor, storage, servers or VMs, SAN, networking, power, and so on. This adds up to a lot of overhead.

Reduce the cost of running applictions by reducing and simplifying the application stack

Reduce the cost of running applications by reducing and simplifying the application stack

Moving to AWS abstracts away the majority of these costs, replacing them with services that can automate them while drastically reducing costs. Longer term, applications that can be run using microservices, such as Lambda, can reduce costs even further.

Lowering TCO Through Optimization

Reducing costs at the application level are very impactful. But how can you continue to drive down overall costs for your organization more holistically, once your workloads are deployed on AWS?

The “lift & shift” TCO model used to build a business case for a cloud migration doesn’t fully capture all the ongoing cost reductions that are possible.

Cost optimization over time continues to drive down costs through ongoing improvements.

You can refine your cost model through activities such as:

  • Instance right-sizing
  • Improving elasticity
  • Continuously measuring, monitoring, and improving your environment
  • Moving databases to a managed service such as AWS RDS
  • Optimizing storage into frequently accessed hot storage, versus infrequently accessed cold storage

So the initial lift & shift, that some customers find easiest to do first, is really just the tip of the iceberg in terms of long-term cost savings.

Putting it all Together

Having covered all 5 pillars of our value proposition, let’s put it all together in context.

Consider the following table. This represents my typical AWS enterprise client, applying all 5 pillars we’ve discussed so far.

The results are quite compelling. Note that cost is not the first value driver on the list.

This client began by benchmarking how well they performed, and what they saw as their key value metrics and performance indicators. We can track changes after moving into an AWS-based architecture. This value analysis has a very tangible bottom line.

With a $14.2M initial investment over 18 months, coupled with organizational focus from the top down (and bottom up), over 300 applications were migrated to AWS.

The result – over $14M in year-over-year savings!

Value analysis

Value analysis

This progress is where the rubber really meets the road.

Practical implementation on AWS drives agility, speed, cost savings, reduced cycle time, and adds value to business and people.

I really enjoyed writing this blog series for you, and I look forward to hearing your feedback!

Questions about the concepts presented in this article? Feel free to drop me a line at mark@linuxacademy.com.

Next Steps

Your organization needs qualified professionals to help mitigate the risks involved in migrating to the cloud. Make sure your staff are properly prepared with hands-on training from Linux Academy.

With Linux Academy for Business, you can:

  • Increase your IT team’s efficiency
  • Combine the benefits of in-person and online training, maximizing your budget
  • Turn constant cloud technology changes into a strength
  • Get your team certified and ready to meet the needs of your customers.

Learn more by downloading this Linux Academy for Business Overview or contact sales today to see how you can optimize your workforce productivity.

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