Report: Cloud migration could provide annual cost savings of 43%

Cloud computing concept. Hand with ethernet cable connecting into cloud.

TSO Logic Inc., a company whose software helps companies optimize their applications across data centers and the cloud, has just bolstered the argument for migrating to the cloud.

In its latest report, “The Economics Behind Cloud Migration and Enterprise Transformation,” the company reveals research showing that some 45 percent of virtualized operating system instances running on-premises would be more economical if they were running in the cloud, offering cost savings of up to 43 percent annually.

TSO Logic said drew its research from an algorithmic analysis of anonymized data from its North American customers, who represent multiple industries. It claims that 26 percent of OS instances are over-provisioned, and that migrating them to a cloud instance would reduce costs by up to 36 percent.

In addition, the company says that 25 percent of the 10,000 physical servers it analyzed are at least three years old. It says the workloads on these Generation-5 servers could be performed on 30 percent less Generation-9 servers, thanks to gains offered by the latter’s more advanced processors. According to TSO Logic Chief Executive Officer Aaron Rallo, the analysis shows that enterprises could enjoy substantial savings by migrating workloads to the cloud.

“Cloud migration is not an all-or-nothing proposition,” Rallo said in a statement. “By understanding current compute, how it’s used, and the economic differentials between current and future states, you can make smarter decisions about cloud strategies and other transformation investments.”

TSO Logic also said that companies could boost efficiency by updating their on-premises infrastructure. Based on historical utilization, it believes that the same workloads could be done on 54 percent fewer servers if they were updated and provisioned correctly.

Photo Credit: Mobiloitte Flickr via Compfight cc