A noticeable trend is emerging as organizations increasingly move their computing, storage, and networking operations to the cloud. The 2023 Cloud Computing survey by Foundry (formerly IDG Communications), which engaged 893 IT decision-makers, revealed that 66% anticipate a rise in their cloud expenditures over the coming year. One of the primary motivators for these migrations, highlighted by 34% of respondents, is the objective to lower the total cost of ownership (TCO).
For years, businesses of various sizes have opted to shift their IT infrastructure to AWS, primarily due to the notable cost advantages compared to sustaining on-premises setups. The extent of these savings has been validated by a recent report from TechTarget’s Enterprise Strategy Group (ESG), which indicates that organizations can cut their compute, storage, and networking expenditures by as much as 66% by transitioning their on-premises workloads to AWS cloud infrastructure.
AWS provides savings, improved price-performance, operational efficiencies, and enhanced customer experiences. The ESG report amalgamates qualitative and quantitative analysis based on interviews with existing AWS users, thorough ESG research, and a conservative economic model, showcasing the savings and benefits organizations might realize by migrating to cloud infrastructure.
Relocating data and workloads from on-premises systems to AWS can result in substantial advantages, including cost reductions from infrastructure, enhanced price-performance, greater efficiency, and improved experiences for end-users and customers. The ESG economic validation report concludes that organizations leveraging AWS cloud infrastructure enjoy cloud-based innovations, faster time to value (TTV), increased business agility, and diminished organizational risks.
According to ESG, AWS customers maximize savings by utilizing AWS services and monitoring tools to optimize costs further, with the flexibility to scale resources up or down as needed through pay-as-you-go pricing models. ESG’s conservative three-year TCO model contrasting AWS with traditional on-premises infrastructure costs found that customers experienced the following:
- A 63% reduction in compute costs utilizing Amazon Elastic Compute Cloud (EC2) instances powered by AWS Graviton processors, AWS Lambda for serverless compute, and cost-optimizing solutions like Amazon EC2 Auto Scaling, Savings Plans, and Amazon EC2 Spot Instances.
- A 66% decrease in networking costs by eliminating or minimizing on-premises networking equipment and connectivity while streamlining network operations with services like AWS Cloud WAN and AWS Direct Connect.
- A 69% drop in storage expenses using Amazon S3 Intelligent-Tiering, Amazon S3 Glacier storage classes, Amazon EFS lifecycle management, and Amazon EBS SSD Storage instead of traditional on-premises storage arrays.
While the ESG report independently confirms the advantages of migrating workloads to AWS Infrastructure as a Service—such as reduced costs, enhanced performance, and improved operational efficiency—organizations like Snap Inc. and FORMULA 1 have been reaping these benefits for years.
Snap, which operates the widely used visual messaging app Snapchat, has over 363 million daily active users who share and save photos and videos. Initially focused on ephemeral content, the app has evolved into a platform where users can store media long-term if they wish. As Snap’s storage demands increased, the company sought to optimize storage without sacrificing performance. In 2016, Snap transitioned its data to AWS. “We opted for AWS due to its global reach, outstanding performance, and competitive pricing that allowed us to reinvest in our business,” states Mia Roberts, manager of the media delivery platform team at Snap.
To optimize storage costs for permanent content, Snap implemented Amazon S3 Glacier Instant Retrieval, which provides low-cost storage for data that is rarely accessed but needs quick retrieval. The company migrated over 2 exabytes of data—approximately 1.5 trillion media files—effortlessly to Amazon S3 Glacier Instant Retrieval. “The fact that no customer noticed this significant migration to Amazon S3 Glacier Instant Retrieval was a big win for us,” Roberts notes. “It was a seamless experience for Snapchatters, with no production issues during the entire migration.” This transition led to savings of tens of millions of dollars on storage costs, all while maintaining performance. Snap has configured Amazon S3 in 20 AWS Regions globally, allowing customers to retrieve data in milliseconds.
AWS’s global infrastructure also enhances Snap’s agility. When the company was founded in the early 2010s, its backend infrastructure was centralized in one U.S.-based data center, which could lead to performance lags for users. “If two users in Frankfurt were chatting, the data had to travel back and forth to the U.S., causing delays,” explains Ryan Smith, SVP of Engineering at Snap. “This affected the conversation’s flow.” However, by migrating to AWS, Snap gained access to data centers worldwide, allowing users to communicate with reduced lag. “Having data centers in locations like Frankfurt, India, or Sydney provides us with real-time access to the speedy tech our customers expect,” Smith adds.
Formula 1 (F1) has also significantly benefited from migrating to AWS, saving considerable time and money. The organization has reduced computational fluid dynamics (CFD) simulation times by 80%, from 60 hours to just 12 hours, according to James Lee, chief technical officer for Formula 1. By utilizing AWS Graviton-based Amazon EC2 instances, F1 has decreased the cost of running CFD workloads by 30% and anticipates further savings, possibly reaching 40%. F1, known for the fastest regulated racing cars, began migrating its data and workloads from on-premises IT to AWS in 2018 to enhance performance and cut costs.
Previously, F1 operated most of its workloads from its Technical Centre, a mobile facility that traveled to each event globally and managed media broadcasts. The Technical Centre combined two systems: the track-based Event Technical Centre and the UK-based Remote Technical Centre. The data resided on local servers at these venues, which F1 would transfer overnight due to the large file sizes, providing analysts with data when they arrived.
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