Drive innovation and accelerate business outcomes with benchmarking

Good afternoon and welcome everyone to this session.

So um for this session, we're gonna talk about benchmarking and use it to drive cloud adoption. Before we really begin, how many of you like data? Awesome. Awesome, because that's what we're here to talk about - the benchmarking data, right?

So um for I would because I value benchmarking, we believe when it comes to cloud adoption, it is crucial for decision makers to understand how cloud can drive benefits for IT and lines of businesses.

So today we're gonna talk about how we can use this data to drive innovation and accelerate business outcomes.

And my name is Nan Chen. I'm a Business Development Manager representing the AWS Value Benchmarking and later I'll be joined by my colleague, Megan and Cai from our amazing customer Bottomline Technologies.

I'll be delving into some of the business benefits attained by hundreds of AWS customers and how to use this benchmark data to quantify the value for your industry. After that, Megan will introduce Cloud Economics and how they use benchmarks to build business case for AWS migration and modernization.

Last but not the least Cai will share how Bottomline Technologies leverage a custom business case to quantify the value and shape their cloud strategy.

So what is value benchmarking and why does it matter?

Benchmarking involves the strategic comparison of performance metrics against industry standards or best practices. And the goal is to identify the areas for improvement and drive organizational excellence.

So at Value Benchmarking, we provide you the quantifiable data to help you understand the cloud value.

And according to a McKinsey survey, when it comes to cloud adoption, the primary barrier for chief IT executives lies in their ability to craft a compelling business case for the target state of cloud adoption.

The data we provide includes both IT and business specific metrics which we'll look at in just a minute and these insights are designed to help you compare your performance with industry peers, identify and prioritize cloud use cases, accelerate your decision making process and track and optimize your cloud performance.

So where does cloud business value come from?

According to IDC research, this chart illustrates the distribution of economic benefits from moving to AWS. They broke the total value into four categories and estimated dollar value for each for cloud adoption as opposed to having on prem infrastructures.

The first economic benefit refers to how cloud can drive down the IT infrastructure cost and this accounts for about 5% of the total value. After that risk mitigation contributes 10% of the value and 29% comes from enhanced IT staff productivity.

As you can see, majority of the value will come from improved business productivity where AWS solutions can help you improve the business agility and in some cases enable your competitive advantages.

Let's now contextualize this using the AWS Cloud Value Framework. This framework was developed to help organizations like yours to build a business case for cloud.

So this includes five key pillars of cloud value across the top from tactical aspects including the cost savings to more strategic ones on the right hand side, such as business agility and sustainability.

And cloud adoption provides tangible benefits across the IT, lines of businesses and sustainability.

And on the screen shows you some of the metrics. According to our research, when it comes to IT benefits, this refers to as we saw earlier, cloud helps drive down the infrastructure cost and improved staff productivity, reducing the on-prem IT downtime and improve business agility for such as you can develop new features faster for your IT applications.

On the other hand, when it comes to business benefits, this tends to focus on a company's financial and business operations. As you can see the metrics can vary significantly across different industries.

On the lower half of the screen, it shows some of the benefits specifically for the life sciences industry. As an example, we'll look at this in more detail. Here just to point to reduced manufacturing downtime and increased throughput for this company's drug pipeline.

So how do we measure these benchmarks? And more importantly, how do you quantify business value with them?

So I'm gonna walk you through how we did it across different industries. Since mid 2022, our team initiated a series of industry studies. As you can see, the industries are covered - 9 different industries along with sustainability.

The goal for these studies are to measure the business benefits across industries for AWS migration. So each of these studies focus on a single industry and measure business specific metrics.

We surveyed a total of 900 global customers of AWS and covered more than 300 different business metrics to avoid bias. We worked with research analyst firms who conducted these studies in a double mask fashion, meaning AWS and the survey respondents remained unaware of each other's identity so they can answer truthfully.

Let's get to some specifics. I'd like to walk you through some results, some of these results using three different industries - life sciences, games and independent software vendor (ISV).

So what is the cloud value for the life sciences industry? For those who aren't familiar - this includes companies such as pharmaceuticals, biotech or medical device manufacturers. And these companies dedicate substantial R&D resources to develop a pipeline of drug or device candidates. And a few number, a small number will progress from R&D to the clinical development phase. And from there fewer still will successfully make it to commercialization and cloud can play a pivotal role across this value chain.

Here are some of the value drivers, how cloud can make a real impact. And for instance, the AWS solutions can help researchers to integrate disparate databases seamlessly and derive insights faster. And once getting into the clinical development phase, artificial intelligence and machine learning solutions help this trial sponsors to better and faster identify the suitable patients and recruit them.

According to our study of more than 100 life sciences organizations who have been using AWS - after cloud migration, they saw an average of 34% increase in their daily process data, 19% time reduced to qualify and initiate new clinical trial sites, 27% reduction in their manufacturing downtime and the 50% increase in their drug pipeline throughput.

Looking at a real example of one of our life sciences customers. So this is a large multinational pharmaceutical company that operates more than 60 manufacturing sites globally. So before migrating to AWS, their production data was transmitted periodically from their local sites to a central system where the data was prepared for reporting. As a result, their operational decisions were made without real time data.

So to modernize their manufacturing environment, they decided to leverage the AWS Internet of Things or IoT to optimize their database and facilitate real time interpolation and facilitate this predictive models. This new system allowed their site operators and corporate users to access real time throughput data for all their factories in order to ramp up or down their production lines. And this helped them to minimize their drug shortages and optimize capacity.

To quantify the value for this use case, which is important for decision makers to make the call of adopting cloud or not - this customer had an estimated $1.3 million peak revenue per day per product. And at the time, they had 100 and 49 product candidates in their pipeline. By industry standards, about 10% of those will eventually get into commercialization.

According to our study, the life sciences organizations save on average six days in ramping up their production lines. So when you dollarized the value of adopting AWS solutions, this equates to more than $100 million in revenue growth for this large company.

Now let's change gear and look at a different industry - this is to quantify the value for the games industry. We surveyed companies such as games developers, online real money games and companies that specialize in games publishing or operations.

And within this very dynamic industry, the companies go through a continuous flywheel of game development launches and refining the gaming experience and user acquisition and retention, right?

So we identified some of the use cases within each stage and how AWS can help them drive value here. For instance, our games customers saw on an average of 21% reduction in developer time to create or deploy new features. A 29% reduction in new games time to market.

We were able to help this company refine the gaming experience by reducing latency, which on average is 20-34%. And lastly, we help them drive their revenue per game developer by 34% on average.

Again, let's look at an example, this is a games developer and publisher that has been working with AWS for a few years now. And they faced some typical challenges of the industry to consistently publish and produce high quality titles while accommodating fluctuations in their player demand.

So AWS provided this scalability and high performance capabilities that enable the development of this 3D graphics creation tools. The tools were used for creators to build more than 2 million 3D meta humans.

And according to our study of the games industry, our customers saw an average of 21% of reduced time in developing new features. And when you calculate the dollar value for this process, this use case expected to generate more than $40 million for this company.

Before I conclude, I'd like to show you an example of where we use benchmarks to build a business case for one of our ISV customers.

So this is a company that has been working with AWS for a few years and they wanted to look retrospectively how, what kind of value they gained from us and whether they should increase their workload on AWS or you know where they stand.

So we worked very closely with several leaders in their company and identified some top use cases for where they applied AWS services.

And here you can see some areas including the developer productivity and we help them drive engineering productivity by reducing infrastructure incidents and adding incremental margins through faster product release.

And under each case, there are one or more value drivers and the dollarized value was calculated based on customer input as well as our ISV specific metrics.

The resultant business case resonated strongly with the executives of the company who decided to further their cloud adoption and work with AWS.

Now with that, let me hand over to my colleague, Megan to talk about Cloud Economics and how they use benchmarks to build business cases.

Thank you, Nan for walking us through that. So my name is Megan Dickerson. I'm from the Cloud Economics team.

I love that. I'm seeing so many of you with phones out capturing pictures, I wanna make sure everyone knows Cloud Economics is actually a complimentary service of AWS. So anyone that's interested in having us help you drive this data for your own customized area, we would love to do that with you.

So I'll walk you through our process a little bit but absolutely, towards the end, we'll have a call to action and more steps there.

So how does Cloud Economics work overall, we start with the model to estimate the value of the customers. So we have 26 financial and operational values. These contain items such as Gartner, the Department of Labor and Statistics. Other approaches such as that we put that into our Cloud Value model.

So as Nan was saying, there's 1000 customers that are in our Lift and Shift models, we have 505 in our Modernization and we have 900 in our New Industry Benchmarks. And we use that to leverage together to create our Cloud Value estimates.

So how does this work in reality? I like to think of it as a funnel. So if you start at the top of the funnel, we're looking at your benchmark data overall, we take that information and then as we get actual customer data, typically through automated fashions, we will use that to refine the estimates and create a customized view for your specific company.

So as we look to the right here where that purple line is or the purple arrow is, that's ultimately where we want to get. It's a combination of thousands of peer sets from the industry benchmarks along with your specific data to help come up with a refined estimate.

What is the business case look like? So these are a few samples of what we produce. When we're creating the business cases, we start with an executive summary. This will help give your C-suite your executives that you're working with to prepare, who was involved in creating the business case, who helped us gather the data? What type of data did we get? Was it automated? Was it a annual CMDB database? Things of that nature?

We go through high level financial overview. What data centers were in scope all of those sorts of things.

The next one is your financial impact results. So just like the examples we were just looking at, we'll look at your overall cost optimization. So it compares them between your on-prem and your AWS. And we look at staff productivity through using more automated functions on AWS. What value is created there, we then look at your operational resilience, so limited downtime on AWS in comparison to on-prem and then finally business agility. So faster features to market more quick releases things of that nature.

Then we have the carbon reduction benefit. So here's how we're looking at how you're meeting some of your ESG goals. Being able to be more carbon neutral on AWS and AWS has many commitments out there through the Climate Pledge and others to meet those as well.

On the bottom, we have our infrastructure savings summary. This is your TCO comparison between your on-prem and AWS. We're going through the different comparisons between compute storage networking and then AWS support and we give a breakdown across whatever timeline works for your company.

We then have a five year cash flow summary and that can be customized again as well for timelines. And then we make sure we have all of the assumptions used. So anything that went into the business case data that you gave us, we make sure to have documented so that that's left with you and your company and you can reference that data as needed.

So what are some examples of actual value that real customers have achieved on AWS? I'm not gonna go through all of these and the lists are much greater, but we wanted to just call out a few of them.

So for cost savings, the Weather Company reported that they were able to reduce from 13 data centers down to six as well as Time Inc had a 50% reduction in the app costs overall.

For staff productivity, again, through more automation, you're able to free up more of your staff's time. So C2C reported that half of the infrastructure team requirement was now there to manage the infrastructure. So they were able to reduce the team in half.

39 years of computational chemistry was condensed into nine hours for Novartis. So those are some pretty overwhelming numbers.

For operational resilience Capital One was able to improve their security posture. And then Kellogg's migrated SAP on Oracle to AWS with zero unplanned downtime across five countries.

And then finally, business agility. Bristol Myers Squibb was able to have clinical simulations in 98% faster than they were on-prem. So again, that's just a small sampling of, of the data that's out there.

So how do we look at putting all of this information together? The left side of this graph is going through our traditional Lift and Shift model. So this is again where we talked to the 1000 customers did the double blind surveys for this. We look at the cost savings, we layer on additional value created from your staff productivity, your operational resilience and then your business agility to come up with a total cost. And that's what you see in that first dark blue pillar.

Then we look at things like modernization. So now adding in containers serverless, things like that into the mix. And we follow that same process in terms of the additional value that's created to come up with what your full optimization opportunities are.

So what is modernization at the highest level? Modernization is talking about getting more towards cloud native services. We're generally looking at things like containers and serverless in our business cases, but that can be customized for what you need as well.

We have three main pillars that we look at - the infrastructure. So those different types of platforms, operational patterns. These are your people process technology, making sure you have the right governance in place. Looking at things like the overall agility and a more agile process and then architecting and how are we architecting on the cloud?

This is a view that comes from a 2021 survey that we did with Nucleus. So again, another double blind survey, but I wanna make sure we're calling out specific KPIs so that you can see the real value that people saw.

So we went through four different pillars, we have containers, serverless, managed data and then managed analytics. And as we go through these, I really want to call out some of the specific benefits that people saw as they started using containers, companies were experiencing five out of eight business agility KPI improvements with up to a 45% increase.

One of two operational resilience KPIs improved by over 40%. When we look at serverless, five out of six cost saving KPIs improved by up to 39% and three out of five staff productivity KPIs improved by up to 30%.

For managed data, six out of eight KPIs improved for up to 71% and then for managed analytics. Similarly, six out of eight KPIs improved for up to 71%.

So the big takeaway here that you can see on the bottom is the highly effective companies are the ones that are making the mix of all of these. Don't just not just using one or two, but the more you combine together, the larger your value will continue to grow. And we can see that on the slide too.

So we broke down what some of the top achievers were - highly modernized organizations are using all four of those pathways that I just showed you on the previous slide.

By organizational revenue, we typically see that companies under 10 billion in total revenue are those that are achieving more of these values. Some of that is due to less complexity in their IT systems and whatnot.

And then by cloud spend across the different KPIs spending more on cloud infrastructure receives greater business value with that.

I'd like to turn it over to Cai who recently worked with our team so he can give you a real life example of how the teams worked.

Great, thanks Megan.

Good afternoon everyone. My name is Cai, I'm from Bottomline Technologies. Before I get started with the details of our partnership with AWS and how we teamed up with them to come up with business cases for cloud migration. I'd like to take a step back and provide more information about who we are, what we do as a company and where we are from a technology transformation journey perspective. And then the process we followed to lock down a couple of use cases that I'm gonna talk about today.

Bottomline Technologies, we focus on simplifying business payments primarily in three areas. One is commercial digital banking. The second one is accounts payable space. And the third one is legal spend management area.

When we look at how we offer these products to our customers, we offer these products in 14 plus globally distributed data centers. And these products run, I would say approximately 20,000 VMs.

So in all our global data centers, when you look at the usage of our products, I would say 700,000 plus businesses, they use our products on a daily basis resulting in almost $6 trillion payments annually. That's a trillion with T.

So you can imagine the complexity of managing these products in our data centers. This also comes with data residency requirements that we need to take care for our customers.

So when we were going through this transformation journey, a couple of years ago, we looked at data residency requirements for customers in various parts of the world to look at options. Like what happens if we provide DR as an example, disaster recovery capabilities in our data centers in different regions.

Unfortunately, from a cost perspective and from business perspective, we found that to be not an option for us, then we started teaming up with AWS to see can we offer DR capabilities for some of our products in AWS as an option?

That's LegalX - one of our products where we started looking at, how do we offer the DR specific aspects of this particular product that we offer to customers in AWS?

When we were going through the benchmarking exercise, working with our AWS team here, what we found out was a 71% reduction in terms of the infrastructure spend when compared to how we operate the systems in our data centers.

And also because AWS offers multi-regional cities and the ability to instantiate I would say any service within seconds more improved cities in terms of what we can offer to our customers.

And most importantly, the biggest advantage for us in terms of making this choice of going with AWS as a DR is time to market where when you look at, especially if you're running your products in data centers, you probably are familiar with the lead time for any big initiative if that requires a significant amount of hardware.

And if you need to order hardware lead time is always a factor from business perspective. For us, I would say it's usually 2 to 4 months, the lead time based on the hardware that you need to order on the amount of hardware you need to order.

So when we started looking into the benchmarking process and the use of AWS to help us from a DR standpoint for LegalX, we found that 90% of time saving, especially when it comes to the metric of time to market. That obviously means that we can be much faster from a revenue realization perspective. For us that's 75%.

So this is a classic scenario of cloud migration strategy from DR perspective for some of our products.

The other piece of modernization aspect that we were looking at a couple of years ago was what is the best way to migrate our applications to AWS. Again, we have bunch of options, lift and shift to can be completely modernized before you actually move to cloud.

In my perspective, there is no right or wrong answer to that. It's really the complexity of the applications, the user base and the financial model that determines, whether it's a lift and shift and are you know, more modernized before you actually move to cloud.

In one of our cases, digital banking products that we offer that are used by 33% of US's largest banks - from a commercial banking product features perspective. This is a product that is built in a big monolithic architecture where we are running on traditional architecture, not necessarily, you know, microservices or cities or containers.

The decision we made was when you look at the migration strategy in AWS, especially if you know, you're familiar with migrating any classic legacy application to AWS. AWS has a very well defined seven R based migration strategy.

From my perspective, what we did was we chose three Rs as part of the migration strategy for our digital banking portfolio.

The first part is really Rehost, which is nothing but can we just lift and shift the application to AWS?

The second one is Relocate - once you're done with the lift and shift, how do you relocate core components of your tech stack? What I mean by that is from a business perspective. A couple of years ago, we made a decision to move away from our tech stack, which was a combination of I would say third party software plus open source software to more alignment with open source software as part of our future tech strategy.

So with that, we are right now looking at one of those three platform components that we need to look at to completely revamp the product architecture.

The final phase that will be working on is the Re-architecture, which is nothing but all the more architectural and guiding principles, microservices API gateways, our containers are ML and AI solutions on top of data.

So we are looking at those as part of the architecture component as part of this process.

Where we are today, we completed the Rehosting for a few customers from a demo perspective. We are working with AWS team to align on best practices when it comes to Relocate and Re-architecting some of those core components in our product.

So far, the partnership has been phenomenal. I would like to thank AWS team for a great partnership so far as part of the cloud journey and we're going to continue to work with them for future phases of this project too.

With that, I'm gonna hand this off to Megan to go through the next steps and closing remarks.

Great, thanks Cai.

So in terms of next steps, as I was mentioning earlier, we have a call to action if you're interested in partnering with Cloud Economics, get with your account team and let them know that you'd like to either do a look at business value benchmarking or perform a Cloud Economics business value case with us. We're happy to work with you on that. Here is the remaining transcript formatted for better readability:

In terms of the benchmark reports, this is the latest list of all of the benchmarks that we currently have available.

This presentation will be going out afterwards. So you should be able to access all of those. If you have any challenges with accessing any of the links, feel free to reach out to us as well and we can help with that.

So with that, I'd like to thank you all for coming and spending the time with us.

Do you want to point to a survey if you could please fill that out for us? That helps us get better data in terms of what you're looking for so we can continue to enhance these presentations moving forward.

And we do have some extra time. So we're gonna actually come off to the right side of the stage and if you have any questions or would like to talk to us about engaging more with your customers or your companies, we're happy to do so.

So, thank you all.