Hitachi Vantara recently commissioned Forrester Consulting to conduct a Total Economic Impact (TEI) study to examine the value that customers could achieve using cloud and application modernization services from Hitachi Vantara. To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four decision-makers at companies with experience using cloud and app modernization services from Hitachi Vantara. The organizations were from various industries including insurance, fintech, pharmaceuticals, and nonprofit. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization representative of the participating companies.
Forrester Consulting’s analysis determined that the composite organization is a global enterprise with annual revenues of $500 million and 3,000 employees. The analysis also assumes that the composite organization:
- Had been using on-premises business hardware but decided to pursue a digital transformation to improve its operations.
- Initially planned to transform by migrating infrastructure and modernizing applications using in-house resources and increasing the size of the engineering team to meet the workload for the transformation project.
TEI Study Key Findings: Quantifiable Benefits
After the investment in cloud and app modernization services from Hitachi Vantara, interviewees reported faster cloud implementations with cloud migration services, improved efficiency to rearchitect applications with application modernization tools, and fewer engineering resources required to manage the cloud environment. Hitachi Vantara enabled these results through its expertise, cloud best practices, and cloud accelerator platform.
As applied to the composite organization, Forrester found the following risk-adjusted present value (PV) quantified benefits of the solution:
- Speed to cloud migration, which was 58% faster than planned. According to interviewees, organizations initially estimated that cloud migration would take a year or more, but cloud migration was completed seven months faster than expected. Moreover, organizations did not need to grow their internal engineering teams as they had originally anticipated for the cloud migration. Improved efficiency of time and resources for cloud migration enabled by Hitachi Vantara totaled more than $300,000.
- Time savings of more than 85% for internal engineering teams working on cloud application modernization. With the Hitachi Vantara tools and resources made available via the updated cloud environment, engineers working on cloud applications were more efficient in refactoring, reengineering, and rearchitecting applications. Without the tools and resources enabled by Hitachi Vantara, the engineering team would have spent more time trying to modernize applications. This cost avoidance translated to more than $700,000 in total savings over three years.
- Ongoing support and management services, which saved more than $2.7 million. Without cloud and app modernization services from Hitachi Vantara, organizations would have continued purchasing and maintaining on-premises hardware, which would have required additional resources to manage the cloud environment. Given Hitachi Vantara’s resources and its expertise in managing cloud projects, interviewees avoided additional hires and additional spending, which led to a savings of more than $2.7 million over three years.
After assessing implementation and services costs, risk-adjusting for realistic and conservative estimates, and estimating the future value of cloud and app modernization services from Hitachi Vantara, Forrester found that over a three-year period, the composite organization experiences a 114% ROI, $2.03 million net present value, and 10-month payback period.
Moreover, interviewees’ organizations experienced additional benefits that were hard to quantify but still impactful. Decision-makers noted improved capacity to work on modernized applications with the tools and services available within the cloud environment; engineering teams were more efficient in building new capabilities and updating applications, with quicker turnaround times for release management. Interviewees also realized greater governance and compliance management for regulations using the cloud architecture and Hitachi Vantara’s expertise in managing cloud projects. Lastly, working with Hitachi Vantara, engineers found greater efficiency with application performance within the cloud environment, resulting in fewer application failures.
For more information, read the full 2022 TEI study, “The Total Economic Impact™ Of Cloud And Application Modernization Services From Hitachi Vantara.”
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