Measuring Software ROI for Cloud Transformation
As enterprises adopt a cloud of choice, they look to extract more cloud maturity across the cloud journey with an engaged services partner. Managed Service Providers (MSP) and System Integrators (SI) are creating new cloud practices, focused on delivering value to enterprises. Typically, enterprise use cases are broken down into typically four buckets:
- Cloud Migration: Focused on migrating from on-premises to the cloud with a public, multi or hybrid cloud strategy. Assisted by the Migration practice.
- Cloud Modernization: Focused on modernizing applications by migrating workloads and automating continuous integration and testing practices to ensure optimal in-cloud operations. Assisted by the Modernization practice.
- Cloud Management: Focused on ensuring in-cloud use case deployment and management of in-cloud applications via simultaneously triaging cost, performance, security and compliance data. Assisted by the Operations Practice.
- Cloud Transformation: Focused on codifying best cloud practices via industry benchmarks, gap analytics and application automation. Assisted by the Strategy Practice.
In order to assist with the service deliveries, MSPs and SIs use Cloud Management Platforms and Tooling (CMPT) to accelerate engagements and reduce cost in services. Adding software to enable services adds to higher per engagement margins, lower resource burden and higher engagement depth. At Cloudamize, on average, we have been able to reduce the cost per delivery to 1/5th of a completely manual professional services engagement and at 1/4th the time. We believe that cloud ROI is a measure of cost, agility and scale. In order to assist MSPs and SIs in their evaluation journey on how to measure ROI, here is a simple framework we believe can add value in tracking their own success and evaluating prospective software partners.
- Architecture Cost: This includes the cost of assessments and migrations to the cloud for developing a suitable cloud and solution strategy that provides on-going value. With software TCOs, migration planners and cloud landing zones, this can reduce the project lead time from 3 months via a completely manual engagement to 3 weeks with technology.
- Development Cost: This includes the cost for cloud systems developers to modernize applications by building custom data lakes, rearchitecting application architecture via containers and / or shipping end to end releases. By institutionalizing CI/CD pipelines and orchestrating infrastructure as code assets, much of the development cycle can be automated without worries around knowledge gaps or compliance requirements.
- Operations Cost(Opex): This includes the cost of managing multiple internal systems and ISVs simultaneously. Much of the existing CMPT tooling today is fragmented with large cost burdens on running RFPs by use cases, managing multiple vendor contracts and triaging support across differing SLA requirements. End to end platform partnerships create higher cost savings by driving all use cases’ and SLA requirements via a single vendor.
- Consulting Cost: MSPs typically retain architects on the bench to ensure that the required capabilities remain in-house for on-demand projects. Using cloud-native tooling such as blueprints and in-cloud management trackers, these capabilities can be driven by technologies to reduce the cost burden of idle resources and drive higher agility from existing teams, leading to higher margins.
- Time to Application Migration: Running migrations involves multiple assessments and detailed workload planning before effectively migrating to a CSP or CSPs of choice. Time to application migration can be measured as an aggregate of time to cloud suitability, time to cloud strategy, time to cloud readiness (including IAM permission, audit trails and development, production and sandbox account setup) and time to migration.
- Time to Application Modernization: Modernizing applications includes the aforementioned steps, depending on the data center and cloud strategy of choice. In addition, it includes time to response, time to production, time to microservice uptime and time to application uptime to ensure that all pipelines are monitored and optimized.
- Time to Application Optimization: This goal is more nuanced and requires a more holistic understanding of the enterprise’s goals. Cost, performance, security, and compliance are common areas of focus, that may be sequenced or run in parallel based on the size of the cloud services team. This is also an aggregate of time to resource compliance, time to threat response and time to application optimization.
- Time to Cloud Transformation: This represents the holy grail and encompasses the achievements of all the phases that transform the cloud. The overall goal is to have software manage the on-going operations of an enterprise’s application portfolio for practices to focus on new opportunities. Complimentary technology partners focus on automating time to best practices by measuring time to benchmarking, time to auto right-sizing and time to new cloud opportunities.
- New Capabilities: Two major goals for most service providers include building out new practices and beefing up existing practice expertise. Software partners should augment the capabilities of the practice to create new service offerings via limited investment on both sides. The best software partners recognize these goals and enable easy experimentations in new capability areas to grow with their services partners.
- New Geographies: Scaling into new geographies has massive product and resource localization hurdles. Not only does it require local business know-how, but an in-depth understanding of the compliance expectations in the market. Software automation can enable remote scaling of practices by scaling assets that codify these best practices and compliance expectations to focus on customer experience and service delivery.
- New Channels: With new capabilities via software partners, service providers can explore business development opportunities that may build new books of business around channel and technology partnerships. Additionally, an indirect by-product of adding new capabilities could be organic growth from new customer segments that could have low touch and higher revenue implications.
- New Insights: Besides new customer growth, service providers are focused on increasing the lifetime value of customers via renewals. By deriving insights on customer health and technology readiness levels, service providers can action out insights to improve the CSAT and, thereby, longevity of customers.
To learn more about Cloudamize’s approach to maximizing service provider ROI or for inquiries regarding the framework, please contact us today.