New Research Finds Big Returns for Companies Choosing Cloud
Posted on: May 31, 2017 | By: Jim Bertler | Acumatica, ERP Selection
One of the biggest decisions that executives need to make in a modern software selection process is this: “Should our business stick with an on-premises application, or should we make the move to the cloud?” This decision is one that can’t be taken lightly, but new research has just been released that could help sway their decision.
Companies Choosing Cloud Seeing 2.1x ROI and Growing
A new whitepaper released by leading research firm Nucleus Research has found that companies choosing the cloud are seeing big results. How big? According to the report, cloud application projects deliver 2.1 times the relative return on investment (ROI) of on-premises ones – up 24% since their 2012 analysis, which marked the difference at 1.7 times.
Better yet, with advances in cloud technology over the years, these applications are becoming even more feature rich, meaning that these numbers are expected to grow with little end in sight.
So why are companies moving to the cloud and why is it bringing these results? Nucleus analyst Rebecca Wettemann explains that not only are cloud applications more affordable from the outset, but are becoming more accessible and functional.
“Companies continue to invest in cloud applications and infrastructure projects because of the lower initial cost and faster time to value. As more and more vendors have invested in moving their solutions to the cloud, the breadth of availability of cloud platforms, applications, and services has grown – as well as the complexity of cloud applications available,” writes Wettemann.
Through adaptability, integration, and customization at lower costs—both at the outset and during the life of the product—companies are seeing immense value.
Two Reasons the Cloud Drives Savings and Returns
Cloud Delivers 2.1 Times More ROI points out two main numbers that should make anyone considering a switch to the cloud sit up and pay attention.
Consulting and Implementation: The cost to implement cloud applications is 63% lower than on-premise, up from 40% in 2012.
Support Personnel: The cost in support personnel for cloud applications is on average 55% lower than on-premises
On top of this, the cloud offers one more big selling point: seamless and simple upgrades. Rather than a painful bi-annual upgrade process that involves hundreds of IT hours, consulting fees, debugging, and retraining, end users at cloud organizations walk in on a Monday with updated software that is just as easy to use as it was when they left on Friday.
What’s more, all of this savings is seen on the balance sheet, meaning that leaders can reinvest these savings—creating a chain reaction of returns.
Going Further: Cloud Piles on the Benefits
The savings and returns don’t stop at lower consulting, implementation, and support costs. The report finds that the cloud offers even more advantages to companies:
- Promises Kept: If something goes wrong, the vendor for the cloud application has to fix things. And they have to fix it all the way, not just “good enough to keep working”… unlike an on-premises IT department might need to do.
- A Partner for Your Business: On Premises vendors and even some unscrupulous vendors could leave you stuck in the rain. Finding a trustworthy vendor who is willing to understand and adapt to the needs of your business will help minimize the likelihood that you will, in the words of Nucleus, “cut and run” in the first six months.
- Going Green and Saving Green: Nucleus also posits an important point—cloud applications use an average of 91% less energy than on-premises. That’s great for your budget and the environment.
Whether it’s in the form of lower startup costs, higher flexibility of the applications, reduced need for support personnel, the maintenance responsibility of the vendor, or the environmental savings—these provide overwhelming proof that “it’s hard to argue against the cloud.”
For more details and analysis, read the whole Whitepaper about how cloud solutions are very worth the ROI.
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2020 Nucleus Research Report on ERP Technology