AWS Insights

Moving from on premises to the cloud with AWS delivers significant cost savings, report finds

There is clear momentum to shift compute, storage, and networking functions to the cloud. According to the 2023 Cloud Computing survey released by Foundry (formerly IDG Communications), which surveyed 893 IT decision makers, 66% of respondents expect their cloud spending to increase over the next year.

One of the top factors driving these migrations—cited by 34% of respondents—is a desire to cut the total cost of ownership, or TCO.

For years, companies of all sizes have chosen to migrate their IT infrastructure to the cloud with AWS because of the significant cost savings they can achieve compared to maintaining on-premises environments.

The extent of those cost savings received significant validation, as TechTarget’s Enterprise Strategy Group (ESG) recently released a report that illustrates how organizations can reduce their compute, storage, and networking costs by up to 66% by migrating on-premises workloads to AWS cloud infrastructure.

AWS delivers savings, price-performance, efficiencies, and enhanced customer experiences 

The ESG report combines qualitative and quantitative economic analysis based on interviews with current AWS end users, extensive ESG research, and the creation of a conservative economic model, illustrating the range of savings and benefits that an organization might achieve by moving their infrastructure to the cloud.

Migrating data and workloads from on-premises environments to the cloud with AWS can deliver significant benefits — in cost savings from infrastructure, price-performance, efficiency, and the experience of end users and customers.

The ESG economic validation report concludes that by building on AWS cloud infrastructure, organizations benefited from cloud-based innovations and realized faster time to value (TTV), improved business agility, and reduced risk to the organization.

According to ESG, AWS customers were able to maximize savings by using AWS services and monitoring tools to further optimize costs with the ability to flexibly scale resources up or down as needed with pay-as-you-go pricing models. ESG’s conservative 3-year TCO model compared using AWS to the costs of running workloads on traditional on-premises infrastructure, and found that customers experienced the following:

While the ESG report offers independent validation of the value of migrating workloads to AWS Infrastructure as a Service — including reduced costs, increased performance, and improved operational efficiency — organizations such as Snap Inc. (Snap) and FORMULA 1 (F1) have been seeing those benefits for years.

Snap saves costs on storage and improves latency to boost the user experience

Snap builds the popular visual messaging application Snapchat, which counts more than 363 million daily active users who use the app to share and save photos and videos. Though Snapchat started with a focus on ephemeral content, such as photos that would disappear after a few seconds, the app has become a place for Snapchatters—as Snapchat users are called—to store media and memories long term, if they choose.

As Snap’s storage needs increased, the company needed to optimize storage without diminishing performance or compromising user experience. In 2016, Snap migrated its data to AWS. “We chose to migrate to AWS because of its global reach, excellent performance, and competitive pricing that, in turn, gave us the ability to reinvest in our business,” says Vijay Manoharan, manager of the media delivery platform team at Snap.

To optimize the cost of storing permanent content, Snap adopted Amazon S3 Glacier Instant Retrieval, which is designed to deliver low-cost storage for long-lived data that is rarely accessed and requires retrieval in milliseconds.

Snap migrated more than 2 exabytes of data—roughly equivalent to 1.5 trillion media files—seamlessly to Amazon S3 Glacier Instant Retrieval from Amazon S3 Standard-IA.

“The fact that no customer noticed this major migration to Amazon S3 Glacier Instant Retrieval was a big win for us,” Manoharan says. “It was a seamless experience for Snapchatters, and we had no production issues during the entire migration.” As a result of the migration, the company saved tens of millions of dollars on storage costs, according to Manoharan, all without losing out on performance. Snap has configured Amazon S3 in 20 AWS Regions around the world so that customers anywhere can retrieve data in milliseconds.

In addition to delivering savings on storage costs, AWS global infrastructure also helps Snap enhance its agility. When Snap was first starting out in the early 2010s, its backend infrastructure was a centrally located monolith, with a single main data center in the United States, according to Jerry Hunter, SVP of Engineering at Snap. This could cause hiccups in Snapchat’s performance for users.

For example, if two users in Frankfurt were communicating with each other, data would need to go back and forth to the company’s data center in the U.S., which meant that there could often be lags in when a user’s response showed up in a chat.

“This is a conversation,” Hunter says. “If you’re not speaking quickly, it doesn’t feel like a conversation.” But by moving to AWS, Snap gained access to data centers around the world, allowing its users to more seamlessly communicate with reduced lag.

“Bringing all of that to a data center in, say, Frankfurt, or in India, or Sydney gives us real-time access to that speedy tech that our customers expect,” Hunter says.

Formula1 gains efficiency in file transfers and saves on complex computing tasks

Migrating to AWS has saved F1 significant amounts of time and money. By using AWS, F1 has reduced computational fluid dynamics (CFD) simulation times by 80%, from 60 hours to 12 hours, according to Pat Symonds, chief technical officer for Formula 1. And relying on AWS Graviton-based Amazon EC2 instances, F1 has cut the cost of running CFD workloads by 30% and anticipates even more savings, according to Symonds. “We think our cost savings could grow to 40%,” he says.

F1 has the fastest regulated racing cars in the world, which race in the annual international FIA Formula One World Championship. The organization runs races all over the world, and in 2018 F1 started migrating its data and workloads from on-premises IT to AWS to improve performance and save costs.

Before F1 adopted the cloud, it ran most of its workloads from its Technical Centre, which physically traveled to every event around the globe and ran most of its media broadcast, according to Ryan Kirk, lead cloud architect at F1.

The Technical Centre was a combination of two systems: its now track-based Event Technical Centre and UK-based Remote Technical Centre. The data would live on these track-local servers, which F1 would then transfer overnight due to the large size of these files. This would then provide data to F1 analysts when they came into work the following day.

When F1 decided to partner with AWS in 2018, it sought to increase the speed and efficiency of these types of processes. For example, AWS Direct Connect allowed F1 to have the underlying bandwidth for the large data transfers. And F1 configured an AWS DataSync agent within its Remote Technical Centre to handle the communication between DataSync and the file source. The combination allowed F1 to conduct the transfer with high speed and efficiency.

F1 has also benefited greatly from using AWS compute power for highly complex projects. F1 decided to redesign its cars to reduce the impact of the turbulent wake that limits the speed and acceleration of following cars, which would allow spectators to see more overtakes and closer wheel-to-wheel action, Symonds says.

To do so, it needed to move away from its on-premises CFD technology environment, which it uses along with wind tunnel testing to design and test the aerodynamic properties of cars.

“We wanted more fidelity in terms of simulation detail for designing our cars,” Symonds says. “Also, we needed more scalability and we wanted to reduce our simulation cycle, so we could perform more complex CFD simulations while decreasing overall execution time.”

F1 migrated its CFD simulation environment to a high-performance computing (HPC) platform using AWS infrastructure. F1 chose to use a combination of Amazon EC2 C5n instances and the AWS Graviton2-based C6g instances to gain maximum flexibility in terms of pricing and performance.

“We can now run huge models, with more than half a billion cells,” says Symonds. “This is only possible because of AWS.”

Conclusion

The ESG report argues that organizations that have moved to the cloud “are delighted they did, as they are now benefiting from the results of having embarked on an innovative data journey that helps them constantly improve their business.”

To simplify and accelerate their migration to the cloud and ensure a successful transition to a comprehensive global modern data architecture, organizations must select their cloud partner wisely, the report argues.

The ESG report validates that AWS “helps organizations achieve this vision as a trusted and reliable partner” at each step along the cloud journey, “starting with its migration acceleration program, then supporting each step from rehosting legacy applications, operating powerful hybrid environments, and finally modernizing to deliver world-class data services across the organization.

AWS, the report concludes, “helps customers gain an economic and operational advantage by continuously innovating across every service and solution area to improve performance while maximizing savings.”

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