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Chasing ROI, Orgs Ramp Up AWS Spending

The promise of higher revenues and lower maintenance costs is prompting many Amazon Web Services (AWS) customers to increase their cloud spending by as much as 30 percent.

That's the upshot of a new survey by 2nd Watch, a provider of managed AWS services and a Premier Consulting Partner in the AWS Partner Network (APN). Earlier this year, the company polled 1,000 executives from U.S. companies that use AWS and have 1,000 or more employees.

Over a third of respondents (36 percent) said that their current investments in cloud have already brought measurable returns on investment (ROI). A slightly smaller number (30 percent) said that they're still waiting on those returns but are nevertheless on track to achieving them.

2nd Watch found that this general optimism about the cloud's impact on bottom lines has led many businesses -- nearly half of all respondents -- to boost their spending on cloud-native AWS services this year. Roughly 35 percent plan to increase their spending on solutions like Amazon Aurora, AWS Lambda, Amazon Redshift and DynamoDB by anywhere between 10 and 20 percent in 2017, while another 13 percent expect an even steeper year-over-year spending increase of 21 to 30 percent.

The top two motivators for businesses increasing their spending on cloud-native services were the potential benefit to their revenues (chosen by 31 percent of those surveyed) and cost savings (24 percent). Other reasons included improved service to customers (22 percent) and faster product and service launches (20 percent).

"The survey results are consistent with what we're seeing and hearing from our customers," said Jeff Aden, co-founder and executive vice president of marketing at 2nd Watch, in a statement Thursday. "They are making new investments into these cloud-native services as payoff from previous investments show up, and they're looking for new ways of creating value and driving down costs."

Despite most of them being eager to to invest in cloud services, however, respondents pointed out a number of roadblocks to greater adoption. Lack of expertise was a major one, identified by 34 percent of those polled as their biggest concern and likely the reason that 36 percent are outsourcing the implementation duties to partners.

"As far as challenges go, the largest enterprises will continue seeking support from leading providers that are experts in public cloud and have experience migrating and managing enterprise workloads," Aden said.

Other notable obstacles included insufficient budgets (according to 28 percent) and lack of support from executives (21 percent).

Among the survey's other findings:

  • Sales and marketing departments were cited by 32 percent of respondents as being the biggest beneficiary of increased cloud spending, followed by customer service departments (19 percent) and product developers (18 percent).
  • About 29 percent of those surveyed expect to invest in their storage and database technologies to accommodate the increase in cloud services usage. Another 27 percent plan to invest in software and 26 percent in new servers and networking infrastructure.

About the Author

Gladys Rama is the Senior Site Producer for RCPmag.com.