The Total Economic Impact™ Of Microsoft Azure PaaS

Application-Development-Related Infrastructure Cost Savings

• Evidence and data.

  The interviewees’ organizations were able to reduce the infrastructure used for application development over time. Many had multiyear migration plans and staged retirements after ensuring migrated applications were fully up and running in the Azure PaaS environment.

  • The service cloud manager for the transportation company said their organization started the closure program for its data centers in 2019. They said: “The smallest one has already been migrated and shut down. The next is planned to be shut down next year. The last is expected to be shut down in 2025. Data-center closing is a big program and requires a lot of effort.” This interviewee also said their organization is doing at least the same with fewer systems. They said, “That’s the fundamental benefit of [Azure] PaaS.”
  • The principal technical architect of the professional services firm said their organization removed one data center and dramatically reduced the footprint and investment in another facility. They said: “All of that has been or will be depreciated in the calendar year 2023. As long as we can meet our goals, we will prevent investment in that captive data center, and we’ll start seeing savings in investments. These things have a five-year lifecycle. That’s not really quick savings, but it will prevent investment in our captive data center starting in calendar 2023.”
  • The chief technology officer of an insurance company confirmed payback was not immediate due to the overlap in time when both platforms were in use. They said: “It will pay off in a few years. There is always the parallel cost of the infrastructure. You don’t shut it down on Day X. You always have a little parallel phase that you need to keep as close as possible. There is always three [or] six months [when things run in parallel], and that has an impact on the budget.”
  • The head of IT strategy for another insurance firm also discussed the need to run the two environments in parallel. They said: “As we retire more and shut down the existing on-premises server, we need to make sure that the cloud server is running properly for at least three to four months’ time. In that period of time, the cost is going up — not going down — because we have to keep the on-premises system running at the same time as we have the expenses in the cloud. We’re taking another year to shut down three of our data centers.”
  • The VP of enterprise architecture at the technology company echoed this and said: “We have our own data center with VMs to host applications for our customers. We are currently in the process of migrating these applications to Azure managed cloud.”

• Modeling and assumptions.

  Forrester assumes the following about the composite organization:

  • The composite organization spends $50 million per year ($100,000 per application on average) for infrastructure related to application development and hosting.
  • After deploying Azure PaaS and migrating 15% of its applications to the new platform by the end of Year 1, the composite organization retires infrastructure commensurate with this amount the following year.
  • The composite organization migrates an additional 25% of its applications in Year 2 (representing 40% of the total), and it retires infrastructure commensurate with this amount in the following year.

• Risks.

  Operational differences that may impact the financial benefit associated with application development-related infrastructure cost savings include:

  • The cost of prior infrastructure used for application development and hosting.
  • The extent to which the organization can effectively plan, prepare, and migrate applications to the Azure PaaS platform.
  • The order and pace at which the organization migrates applications to Azure PaaS, including time spent refactoring applications if needed.
  • The organization’s policies for retaining backup infrastructure in order to mitigate risk associated with migrating applications.
  • The speed and ability of the organization to decommission environments.
  • Migrating from other cloud infrastructure solutions, which may result in lower cost savings.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $19.1 million.

Application-Development-Related Infrastructure Efficiencies

• Evidence and data.

  Interviewees said Azure PaaS does not require as many resources as on-premises or IaaS implementations on an ongoing basis. Microsoft handles virtually all server administration tasks, so organizations can focus on other activities.

  • The principal technical architect at the professional services firm said: “The things that people focus on are now dramatically different. Before, our database teams spent a lot of time managing versions and patching and all of those other things. There’s the operating system and the firmware and all those other things. With Azure PaaS services, those are all entirely managed, so those groups that are running full platform and service don’t have to maintain that equipment.” The interviewee continued: “I think that the operating-system patching — because we still asked for it — is probably maintained by one or two people. Whereas, before, it was probably [maintained by] a whole team of maybe 10. If you think about every capability and service, there was someone or some people managing that lifecycle that no longer has to be managed.” All in all, this interviewee estimated their organization went from 25 to 30 people managing all aspects of application infrastructure down to three.
  • The head of IT strategy at an insurance company echoed this, saying: “[Before,] if we needed to set up a Windows server, it would take them one day to set up the Windows server plus another week to establish network connectivity, making sure that the lines are all connected for those browsers and hardware. Deploying a simple website — just the infrastructure setup — took one FTE around two months’ time to get the hardware purchased and set up. With Azure PaaS and DevOps, we can do it within one week.”
  • The service cloud manager for the transportation company said, “More automation and tasks managed by the cloud provider means more time available for the internal teams to work on other tasks.”

• Modeling and assumptions.

  Forrester assumes the following about the composite organization:

  • The composite organization has 150 systems administrator FTEs responsible for supporting application-development-related infrastructure.
  • After deploying Azure PaaS, the composite organization migrates 15% of its applications to the new platform by the end of Year 1, an additional 25% of applications in Year 2, and 30% of applications in Year 3.
  • As applications are migrated, support of the legacy infrastructure for those applications is reduced by 50% in Year 1, by 70% in Year 2, and by 90% in Year 3.
  • The average fully burdened annual compensation for a systems administrator is $140,000.
  • Systems administrators recapture 75% of the time saved to put toward other work efforts.

• Risks.

  Operational differences that may impact the financial benefit associated with application- development-related infrastructure administration efficiencies include:

  • The size and maturity level of the team responsible for support of infrastructure used for application development.
  • The extent to which the organization can effectively plan, prepare, and migrate applications to the Azure PaaS platform.
  • The order and pace at which applications are migrated to Azure PaaS, including time spent refactoring applications if needed.
  • The organization’s policies for retaining and supporting backup infrastructure in order to mitigate risk associated with migrating applications.
  • Prevailing local compensation rates for systems administrators.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV of $10.3 million.

Application-Development Efficiencies

• Evidence and data.

  Interviewees said the Azure PaaS platform and having access to related Azure DevOps services enabled developers to work much more efficiently.

  • The head of IT strategy for an insurance firm described how their organization’s development team is deploying to the cloud in a much faster way. They said: “It’s four to five times faster. For us to implement a single feature, originally it may have taken us two to three weeks. Now, it’s two to three days.” The interviewee explained that their organization is able to take advantage of microservices and APIs so that if one part of an application is broken, it doesn’t affect the entire application. They said, “We’re getting 90% benefit.”

  • The service cloud manager for the transportation company said: “Due to the greater reliability and availability of the [Azure] PaaS platform, developers are working faster [and] more efficiently than they were before.” This interviewee could not quantify this benefit, but they feel their organization is now twice as efficient because it has fewer incidents and less downtime. Because Azure PaaS provides a more structured environment for modernizing applications, developers spend more time on value-added activities.

  • The principal technical architect for the professional services firm explained: “For some of our application PaaS platforms, the teams by design are able to focus on the code and not the platform management itself. They’re not configuring and tweaking the web server, for example. They’re really focusing on the code. And I would say that would be a big [benefit]: the idea that there is less need for some of these ancillary teams like database administrators because you’re able to use and interact with the service. Maybe [it’s] in a more constrained way than you would have an on-premises deployment, but it pushes you into a direction that’s more supportable.”

  • The VP of enterprise architecture for the technology firm noted that resource provisioning is much simpler with Azure PaaS. They said: “It’s very easy for our engineering teams to provision new technologies for exploration purposes. This enables rapid prototyping and quicker customer feedback. The DevOps team also found Azure PaaS to be valuable to build new deployment pipelines. This drastically reduces our time to build and market solutions.”

    Speaking more generally about development efficiencies, this interviewee distinguished more efficient development practices from the actual time spent developing. They said: “Development times are exactly the same, but the process is easier. [With] the traditional model where we developed with the clients or applications, managing those dependencies across the teams was messy. ... The development process is more efficient working on cloud.”

• Modeling and assumptions.

  Forrester assumes the following about the composite organization:

  • The composite organization has 1,500 FTEs responsible for application development.
  • After deploying to Azure PaaS, the composite organization migrates 15% of its applications to the new platform by the end of Year 1, an additional 25% of applications in Year 2, and 30% of applications in Year 3.
  • Productivity improvements impact developers working with applications migrated the previous year and roughly 50% of applications migrated the current year, which equates to 30% of applications in Year 2 and 55% in Year 3.
  • After applications are migrated to the Azure PaaS environment, developers working with those applications experience an improvement in productivity from DevOps automation and reuse of code and architecture, growing to 5% in Year 2 and to 10% in Year 3.
  • The average fully burdened annual compensation for an application developer is $140,000.
  • Application developers recapture 75% of the time saved to put toward other work efforts.

• Risks.

  Operational differences that may impact the financial benefit associated with application development efficiencies include:

  • The size and maturity level of the application development team, including developers’ experience, capabilities, and effective use of DevOps for cloud-native development.
  • The extent to which the organization can effectively plan, prepare, and migrate applications to the Azure PaaS platform.
  • The order and pace at which applications are migrated to Azure PaaS, including time spent refactoring applications if needed.
  • Prevailing local compensation rates for application developers.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV of $7.2 million.

Revenue Loss Avoided From Improved Application Uptime.

• Evidence and data.

  The interviewees said the Azure PaaS platform is a more resilient development environment compared to on-premises. Developers leveraged cloud-native patterns to ensure greater resiliency for their applications.

  • The service cloud manager for the transportation company said the Azure PaaS platform provided a more reliable and more available environment for application development. In their view, this was the most valuable benefit because it provided more flexibility and gave more time back to the developers. They said: “There are fewer incidents joining applications running on the Azure PaaS platform. There’s more uptime. It’s one of the fundamental benefits of Azure PaaS, that it’s more reliable, easier to maintain. It’s a better performance for the same price.”
  • The head of IT strategy for an insurance company estimated the uptime for their organization’s on-premises development environment was somewhere between 92% and 93%. They said ,“With Azure PaaS and DevOps, it’s now 99.99%.”
  • The principal technical architect of the professional services firm noted that improved uptime and reliability came after working in the cloud for a while. They said: “In the beginning, Azure was known to have more reliability events. And then maybe we also had to mature, too, to understand the idea that the cloud may have more blips and brown outs. We had to make our applications more resilient to those things.”
  • The VP of enterprise architecture for the technology firm said their organization’s customers gained a huge performance boost after the company migrated applications into the cloud. They said: “We redesigned one of our critical components in the client server app by developing it in the cloud. The fact that we were able to use an event-driven architecture made the overall solution highly scalable and resilient. This is only possible using cloud-based systems.”
  • The chief technology officer of an insurance company agreed that reliability is better with Azure PaaS, but they do not consider it an important benefit for their organization. They said: “To be honest, we don’t have super high reliability requirements, especially for commercial insurance payments. If you send the policy out 2 hours later, it’s okay. It’s very rare that downtime is an issue.”

• Modeling and assumptions.

  Forrester assumes the following about the composite organization:

  • 5% of the organization’s revenue is impacted by application downtime.
  • Prior to deploying to Azure PaaS, the organization experienced an average of 7.5% downtime per year related to applications.
  • After deploying to Azure PaaS, the composite organization migrates 15% of applications to the new platform by the end of Year 1, an additional 25% of applications in Year 2, and 30% of applications in Year 3.
  • After the migration to Azure PaaS, application downtime is reduced 90% for those applications migrated to the platform.

• Risks.

  Operational differences that may impact the financial benefit associated with revenue loss avoided from improved application uptime include:

  • The size and maturity level of the application development team, including developers’ experience, capabilities, and effective use of the Azure PaaS platform for development.
  • The amount of downtime experienced prior to Azure PaaS and the impact of that downtime on the organization’s revenue streams.
  • The extent to which the organization can effectively plan, prepare, and migrate applications to the Azure PaaS platform.
  • The order and pace at which applications are migrated to Azure PaaS, including time spent refactoring applications if needed.
  • The organization’s operating margin.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $3.8 million.

Revenue Gains From Faster Application Production

• Evidence and data.

  Most of the interviewees’ organizations were able to increase the speed of application development to production and improvement cycles as a result of migrating to Azure PaaS, enabling their organizations to better serve customers. Although, for some, this is still a work in progress.

  • The principal technical architect at the professional services firm said that before using Azure PaaS, delivery of infrastructure delayed their organization’s development teams. They said: “Someone says, ‘I need a server,’ and maybe three months later, they would get it. Right now, someone says, ‘I need an application platform and a database ready,’ and they can have that in a few hours. ... Now, they can start developing on their own, which has had a dramatic impact on our ability to meet customer and business objectives and allowed us to execute on those [projects] with higher revenue, [provide] better client experience, and [be] able to move faster against our competitors than before.”
  • The VP for enterprise architecture for the technology firm said: “I can definitely see us releasing more versions than four a year, but we are not doing that today because we are still in this journey of modernizing our existing suite of applications. Releasing more frequent upgrades is a goal.”
  • The chief technology officer for an insurance company said their organization’s time to market had improved but that it wasn’t at full scale yet. They said: “That’s just part of the transformation journey. It has slightly improved, and it will dramatically improve over the next months because we have invested heavily in using DevOps tools [and] rolling this out globally. We have a few teams that piloted this where we can see the benefit, and now we are really scaling this through the organization, mandating or onboarding everyone on DevOps, [and] following certain standards we defined. And, through that, we can see big benefits.”

• Modeling and assumptions.

  Forrester assumes the following about the composite organization:

  • 0.5% of the organization’s revenue is enhanced by improved time to market associated with application releases, updates, and upgrades.
  • After deploying to Azure PaaS, the composite organization migrates 15% of its applications to the new platform by the end of Year 1, an additional 25% of applications in Year 2, and 30% of applications in Year 3.
  • After deploying to Azure PaaS, time to market is reduced by 50% for those applications migrated to the platform.

• Risks.

  Operational differences that may impact the financial benefit associated with revenue gains from faster application production cycles include:

  • The size and maturity level of the application development team, including developers’ experience, capabilities, and effective use of the Azure PaaS platform for development.
  • Development timelines experienced prior to using Azure PaaS.
  • The extent to which the organization can effectively plan, prepare, and migrate applications to the Azure PaaS platform.
  • The order and pace at which applications are migrated to Azure PaaS, including time spent refactoring applications if needed.
  • The value that faster and richer application feature sets contribute to the organization’s revenue streams.
  • The organization’s operating margin.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $2.8 million.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Internal transformation.

  Interviewees said the shift to the Azure PaaS platform and an integrated DevOps approach to development had a profound impact on their organizations’ internal IT and development teams as work moved off on-premises development environments. More automation and tasks managed by Microsoft Azure meant more time available for these teams to work on other, more value-added activities.

  • The VP for enterprise architecture at the technology firm said: “It’s fully automated with reporting and end-to-end visibility to our developers. It was a game-changer because the developers don’t worry much about deployments anymore. The DevOps teams help the engineers through the deployment journey including setting up monitors, etc. In the traditional deployment model, the engineers don’t have too much visibility beyond delivery. In the newer model, the developers get to see how their applications respond and behave in various situations. They can proactively identify and work on issues instead of being manually notified by the end user or a support agent.”

  • The principal technical architect for the professional services firm described how day-to- day work has changed. They said: “It’s been a big cultural shift. One of the things that we Instituted at about two-and-a-half or three years ago was a self-service model. They’re maintaining a platform that allows the application teams to deploy their own cloud infrastructure, their own SQL servers, their own VMs, [and] their own platform-as-a-service app services. They have shifted more to enabling technologies versus doing the work of building platforms, like monitoring platforms and cloud delivery services, and then helping enable the teams to be self- sufficient.”

    This interviewee summed it up by saying: “It is a dramatic difference. Now you’re now focusing at a higher level of operations. The database team, for those that are running all on [Azure] PaaS, can be focused entirely on database performance, tuning, [and] indexing. Application teams are not worrying about the runtime version. They can use any of the runtime versions by invoking them and, then once a month, they’ll just get patched for them. You really focus your effort on automation and repeatable deployment in the best practice and far less on the day-to-day maintenance.”

  • Interviewees said developers needed to learn new ways of working in the PaaS environment. The chief technology officer of an insurance company said: “[Before,] we had a central team providing services, which the business applications team used. None of the business applications teams had to worry about security or infrastructure stuff. The moment we went into Azure PaaS with a full federated model as we initially did, all of the teams were suddenly on the hook for the security aspects and some infrastructure-related aspects regarding the use of database services, etc.”

• Reusability.

  Access to Azure DevOps via the PaaS platform enabled developers to reuse code more efficiently. The head of IT strategy for an insurance company explained: “With Azure DevOps, we are able to do more reuse of code [and] reuse of architecture. We are trying to see how we can avoid reinventing the wheel again and again. We improve the infrastructure and then we think about how we can reuse our existing architecture or reuse existing code.”

  Reuse of code was also a key objective for the chief technology officer at another insurance firm. They said: “We want to modernize everything we bring into he public cloud [and] really reengineer it in a way to make it API-first to make sure whatever we build is only built once and can be reused. The cloud helps with that reusability.”

• Auto-scaling flexibility.

  Interviewees liked the fact that their organizations could easily scale up or down and only pay for what they use, giving them the agility to experiment more freely in their development activities while avoiding overprovisioning costs.

  • The principal technical architect at the professional services firm explained the appeal of auto-scaling in economic terms. They said: “If you own your data center, you have to buy for that peak, and then it sits unused even though you already own it and are deprecating or depreciating it. In the cloud, you would pay for what you need, and you would be able to expand out to what you needed and then contract back down. Scalability has been key.”
  • The VP for enterprise architecture of the technology firm confirmed their organization took advantage of auto-scaling to avoid overprovisioning in the cloud. They said: “Absolutely yes. As we run into peak loads, it will auto-scale out and then scale back in [automatically].”
  • The chief technology officer at an insurance company indicated their organization had a limited use for auto-scaling but still found it beneficial. They said: “We have a few applications where there is a high peak of usage — [for example] during peak renewal season of our business where we just need to scale up our infrastructure there. We could actually see that we had a big benefit. But for most of our applications, we have a steady load of transactions. It’s fixed capacity or consumption we need.”

• Business impact of application modernization.

  Because Azure PaaS relieves developers of infrastructure responsibilities, the composite organization’s developers can focus more intently on application-based innovations that meet customer needs and benefit their business.

  • For the chief technology officer at the insurance company, “It’s the innovation capabilities you get through all the parts coming together, which enables you to focus on the business applications. You don’t have to worry about infrastructure topics. We still have to worry a little bit about security, although the environment helps us.”

    This interviewee explained: “Digitalization eventually arrived in the insurance industry. While a lot of our applications we are building for our in-house clients, more and more there are software offerings we make to the outside world, to our clients, to our brokers, et cetera, so a lot of the concepts like multi-tenancy or API-first has become super relevant for us. And definitely, let’s also make sure we can offer it to the outside world as an investor-published API or service, for instance. That is, of course, where Azure PaaS platform helps us find the time to do this technically and securely, by providing access management in the right way.”

  • The VP of enterprise architecture at the technology firm also described an initiative to integrate applications to facilitate information exchange for their organization’s customers, and they credited Azure PaaS with helping to make that happen. They said: “Azure provides Power Automate, a low-code/no-code tool where you can drag and drop connectors and then easily write information into an API. I don’t have to have a developer hand-coding these connectors. I can just simply drag and drop and, with some simple configuration, share information in any format. That is very key ... It’s basically enabled the teams. If we decide to invest in a concept, we can find what works and [what] doesn’t work much faster. ... As you move to these autonomous squads, the teams can do experimentation. They can find out if something in the market works a lot faster. Instead of making two moon shots every year, you’re able to get out there with 10 or 15 or 20. It does pay off in the long term, having the ability to find out what works. If you think about how that can manifest itself in meeting business challenges and needs, what I can tell you is that’s an easily measurable outcome of our cloud journey.”

• Security, policies, and controls.

  Some but not all interviewees agreed that Azure PaaS provides a more secure environment for development. While audit trails make compliance a more straightforward process, cloud-based security requires a change in mindset that some interviewees’ organizations struggled with.

  • The principal technical architect at the professional services firm said: “Everything is visible and logged in the public cloud, [which] means that we have a dramatically more secure environment with higher visibility to the environment. Right now, our ability to deploy things uniformly every time [and] our visibility into what’s connecting and trying to be connected means a dramatic reduction in the likelihood of an attack being successful. ... Because of the visibility and the logs and the audit trails, compliance is a fairly straightforward process. We can look inside the code and see if someone’s compliant with certain code practices. We can look into the access logs to see if we’re compliant there. We can audit those sorts of things.”
  • The chief technology officer of an insurance company confirmed certain aspects of security and compliance were easier. They said: “Certain central services are still required, but [Azure] PaaS makes it much easier to roll out policies and controls. We immediately know which resources are impacted. We immediately know which resources and which teams are out of policy. It makes it much easier than before. ... There is still a lot that we have to do ourselves. Security always has these different layers protecting the data center [and] protecting the servers up into all these software layers. Of course, the cloud takes on some compared to when we were on-prem with a data center in the lower layers. When it comes to the software layers and how you build software and set user management, it is the same as before. There is still a lot we need to be secure. To be fair, you don’t have to worry about patches on your database and servers. That’s definitely a benefit from being in the cloud.”
  • The service cloud manager for the transportation company noted: “[Azure] PaaS allows us to define the basis of compliance, but the level of compliance requested by our company doesn’t always fit with the Azure compliance rules. [On the other hand,] the Azure PaaS platform is quite easy to work.”
  • In contrast, the head of IT strategy at an insurance company said their organization struggled to set up role-based controls in the new environment. They said: “The security team still has the mindset of running the security in an on- premises way. I fear that it’ll become more dangerous because no one is actually taking control of the governance part and the security part.”

• Cost management.

  The interviewees’ organizations relied on a combination of tools, including Microsoft’s Cost Management + Billing to monitor and manage cloud costs.

  • The chief technology officer for an insurance company noted that working in the Azure PaaS environment required their organization to become “super rigid” about cost management. They said: “That’s the ultimate mindset change our teams needs to get. In earlier times, this was a yearly planning process where cost was distributed as pay per plan, not pay per use. Now, in the public cloud, you need to do daily housekeeping, where what you reserve today is less cash out today, not next year or later. That’s a mindset change we’ve made. We invested a lot into giving a full infrastructure cost overview to the application teams.”
  • The principal technical architect for the professional services firm indicated their organization used a combination of Microsoft tools and other tools to keep development teams focused on costs. They said: “We have a fairly new synapse model that allows us to provide reporting and better chargeback capabilities to the lines of business. There are some tools that we use on the finance side, but most of it is driven by data and reporting available in Azure that we expose through things like Power BI reports, so the teams know where their costs are. [Before], it was fairly opaque, and it was kind of a best guess. Now, it's absolute. There’s no guesswork. This is exactly what you’re spending as a squad and by application. Chargeback is not that practical with a captive data center, but it is easily possible with the public cloud because the teams are in control to some degree of their excess spend.”
  • The service cloud manager for the transportation company found Azure’s cost management system easier to use compared to a competitor’s tool, and the VP for enterprise architecture at the technology firm said they like that Azure’s reports offer advice and recommendations for managing costs, such as decreasing consumption without sacrificing requirements.

• Keeping up with the new.

  Interviewees said one benefit of having Microsoft manage their organization’s platform was gaining access to the latest technology, which one interviewee felt was harder to do when their company managed its environment itself.

  The principal technical architect of the professional services firm said: “[We now have the] ability to take advantage of those things that are released in monthly life cycles by the cloud providers. [We] don’t have to do anything. [We] just get it, whether it be something kind of boring — like new backup capabilities or new cost reduction opportunities to new capabilities — that allow us to do things that we couldn’t do before. Of all the things [and] the biggest picture, that’s the biggest benefit. We can talk about auto-scale and other business attributes, but the idea that we get to take advantage of these enormous, probably historic, investment scales is pretty great.”

• Attraction/retention.

  All of the interviewees felt the Azure PaaS platform had a positive impact on their organization’s ability to recruit and retain developers.

  • The principal technical architect at the professional services firm said: “Because we’re doing more interesting things related to cloud- native technologies, it has helped measurably in our company’s HR scores and surveys. ... That’s absolutely part of the retainment, and it has made it easier to have a global workforce.”
  • The VP for enterprise architecture at the technology firm noted: “The fact that we were migrating into a cloud [and] building cloud applications [has played a big role]. ... We trained some of the development teams on the cloud and they are super excited. They are excited about the fact that they work in the newer environment. ... There was a learning curve, but once we brought the developers into this new way of developing applications, it was eye- opening. It actually helped us a lot [with] retaining our employees, encouraging them, [and] showing them a career path.”
  • The head of IT strategy for an insurance company said that Azure PaaS made recruitment easier. They said, “It’s very easy to ask a few questions and know whether [candidates] actually have used Azure before.”
  • The chief technology officer at an insurance company said they believe Azure PaaS helped attract and retain development staff. They said, “It does because it’s an exciting journey for a lot of people.”
  • The service cloud manager for the transportation company noted: “When we hire someone, [Azure] PaaS makes it easier for these people to learn on the job. And they can work on a wider range of activities and applications. They have a wider range of paths [career options] because [Azure] PaaS is easier to work with.”

• Reliable service and support.

  Interviewees had good things to say about Microsoft’s support services.

  The VP of enterprise architecture for the technology firm said: “We get great support from Microsoft. Our account manager has been excellent. We usually get in touch with the right resources within a day to discuss any problems or new ideas we may have. In addition, we have a standing biweekly meeting to discuss and bounce ideas for new product development successes. It has tremendously helped us build products faster.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Azure PaaS and later realize additional uses and business opportunities, including:

• Continued innovation.

  The interviewees anticipated future benefits of their organizations’ investments in Azure PaaS to come from innovation.

  • The chief technology officer of an insurance company said, “It gives us the ability to profit from the innovation happening with the technology.”
  • The VP of enterprise architecture for the technology firm echoed this. They said: “Our investment in Azure PaaS is going to help the company sustain our growth rate in the future. If we don’t do this now, then we may have a big issue in the future in terms of supporting our existing customers who are looking for cloud- based answers, the connections, and the different market channels for selling our products. I would probably say if we don’t do this, then we are going to be behind the curve in the future.”

• Continued migration to cloud.

  The interviewees said their organizations were still in the process of migrating applications to the cloud.

  • The principal technical architect at the professional services firm said their organization was between 95% and 90% complete, while the head of IT strategy estimated their organization would be 90% migrated by the end of 2022 and hoped to be 100% migrated by the end of 2023.
  • The chief technology officer for the insurance company said that despite some initial missteps, their company remained committed to its migration and modernization strategy. They said: “We stopped a lot of the things we started doing over the past two years because the cost savings were not coming through in that sense. We still believe we need to continue that journey on the public cloud for a lot of good reasons [and] finding the right talents. There are now more reasons for wanting to have the latest technology. Cost saving is only one of the factors in the revised business case.”

• Exploring multicloud strategies.

  Some of the interviewees’ organizations had already deployed or were actively exploring how to operate in multiple clouds to augment their core applications running on Azure PaaS and to avoid lock-in effects.

  • The principal technical architect for the professional services firm said: “We have done an evaluation of what multicloud means to us and we will start investing now that our cloud practice is fairly mature. ... In the foreseeable future — let’s say [in] five years — we intend to have our primary compute and storage footprint to be in Azure, but [to] leverage other clouds to augment applications that are not necessary.”
  • The chief technology officer of an insurance company noted: “We are actually having a lot of discussion on lock-in effects. How much cloud- agnostic should we develop versus [embracing] the lock-in and go for all the cloud-native stuff that Microsoft gives us because that’s where the innovation comes in? That’s an interesting topic we are discussing right now. ... As of now, Microsoft is still the preferred vendor where we really build up the expertise at this point in time.”

• Extending PaaS to other infrastructure.

  The head of IT strategy for an insurance company mentioned that their organization is exploring options for migrating AS 400 mainframes in Azure.

• Further use of automation.

  The head of IT strategy for an insurance company said: “Our next step is trying to automate with [Azure] PaaS. The ability to optimize and automate most processes and reduce manual work is definitely a good way to go.”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).