The Cloud Value Framework enables organizations to build a comprehensive business case for cloud computing by measuring and tracking progress against four key dimensions of value. AWS Cloud Economics developed the Cloud Value Framework by working with more than 100 enterprise AWS customers and analyzing over 1,000 public AWS case studies.
The results show four main areas in which AWS customers are realizing business value by moving to cloud computing:
This whitepaper provides an overview of how the cloud is transforming business and an analysis of the four aspects of the Cloud Value Framework listed above.
Understanding Cloud Computing
To understand the transformative power of cloud computing, consider how the power-grid revolution modernized manufacturing. Before the development of widespread electrical utilities, companies had to buy and run their own generators for electrical power to operate their machines. This required significant capital expenditure (CapEx) upfront, as well as ongoing repair, maintenance, and replacement costs. Perhaps most importantly, it made companies less resilient, agile, and productive. Eventually, utilities began producing electricity centrally and selling it to businesses through the power grid. Not only could businesses reduce costs and CapEx using utility-provided power, but they could also focus their energy and investment on improving product quality, developing better manufacturing processes, and better serving their customers. Now, fast-forward to the computing revolution of the 20th century. In the beginning, companies typically purchased, deployed, and managed their own computing resources. As with a power generator, building a data center required large, upfront CapEx, a lengthy procurement cycle, and the expertise and staff to run it all. Just as the power grid enabled companies to get electricity from a centralized utility, today the internet provides a way to access centralized computing resources such as AWS. This allows companies to avoid large, upfront hardware investments and pay only for what they use, as with an electric utility. In addition to reducing costs, these companies also were able to focus their employees on differentiating and value-added work, improve the reliability and security of their electricity, and be more agile and responsive to their customers.