Switch to Save | A cloud cost-benefit report for e-commerce


Problems you experience without the cloud

If you’re not taking advantage of a cloud-based hosting method, then you’re likely experiencing a few recurring problems. First of all, using a homegrown or legacy solution can make it very difficult for organizations to consistently release digital content and update product catalogs properly. Additionally, you may be using excessive energy to roll out just a few products and content pages.

Putting so much effort in to a small change can slow down your business operations from a marketing standpoint, and cause customers to lose interest. In today’s age, it’s more important than ever for brands to communicate new and relevant content to their customers. This has to be done quickly and on an ongoing basis.

Cloud cost-benefit report | Quantified benefits to cloud customers

Now let’s talk numbers since they’ll have a lot of weight on your decision as to whether cloud-based is the best method for your company. These decisions are huge, and it’s important to understand their financial impact. When companies switch to cloud-based hosting, they find that they can save a ton of time when it comes to updates, and this saves them money too.

Content and Product Management

Specifically, companies can see a 50% decrease in the time it takes for typical content and product management updates. This is because the cloud makes content management easier and updates can be created almost instantly. Better yet, the cloud can allow you to build updates once and then publish them across multiple channels.

This drastically reduces redundant development efforts in this area. From a conservative standpoint, organizations can save 50% of development and content creation effort, which can result in a 3-year present value savings of over $1M. With this advantage alone, you can already start to justify the average costs of moving your digital experience over to a cloud-based hosting method.

Cloud-based vs. On-premise Solutions

In general, the average cloud-hosted CMS or digital commerce system yields more savings than an on-premise solution. Particularly, organizations are able to save on infrastructure hardware and the maintenance costs involved. Companies can save as much as $875K by switching from an on-premise solution to a cloud-based one.

AI-based Personalization Engines

eCommerce implementations can also give you impressive features such as AI-based personalization engines and campaign management tools. Using these resources, companies are able to generate more revenue since they can provide more context to overall content messaging. Not only can customers find exactly what they’re looking for, but their information and behavior can be tracked so that they can be led to other attractive purchases, often increasing average order value.

Particularly, these features can yield 3% increases in site conversion rates, 5.5% increases in customer basket sizes, and give your company an expected return over $4.5M.

Cloud cost-benefit report | General efficiency benefits of the cloud

Next in our cloud cost-benefit report, we’ll observe some general benefits from switching to the cloud. In short, making this switch is going to turn your team into a well-oiled machine. This switch will decrease work for your team’s developers, content creators, and marketers. In turn, this will allow them to spend more time on creating more valuable user experiences. Ultimately, this will allow you to reach more consumers at scale since there will inherently be more time freed up to reach them.

To double-check that this is working, you can look for higher conversion rates on your site, as well as greater basket sizes and reduced labor inputs.

With more time to spend on the site experience, you will see higher overall customer satisfaction. This is largely due to the fact that your customers will be offered more meaningful content. Of course, this will also give them a more meaningful relationship with your company.

The last consideration is a benefit for marketers specifically. This is that using a CMS that leverages the cloud can remove the need for excess marketing tools, which can save you even more time and money on current subscriptions to such tools.

Cloud cost-benefit report | Cloud switching costs

Of course, all of this potential revenue analysis is pretty useless without knowing the costs. Switching costs can make or break this decision, depending on the company. When you break it down, the costs to expect are related to licensing, migration and integration.

Many cloud hosting methods are included in a larger platform, sold as a platform-as-a-service (PaaS). These costs are annual and in the ballpark of $800K over 3 years.

As far as migration and integration go, this is largely a labor-induced cost, as it takes many developers to successfully implement the platform and migrate your content and data properly. Migration periods typically last about 3 months, followed by a full month of testing. For all of this labor, you can expect to incur a one-time cost of around $300K.

A re-cap of cloud-hosting benefits

Now, to conclude this cloud cost-benefit report, let’s do some basic math. With potential revenue opportunities totaling $4.5M and total costs of about $1.1M over 3 years, you’re looking at a profit of around $3.4M. That’s a lot of cash, and it’s not even including the figures you will save by making the switch.

The money-aside, this is what it really comes down to. Making the switch now will only continue to save you money in the future. Simply put, companies all over the world are re-platforming their eCommerce experiences, and these platforms involve comprehensive cloud capabilities. This is because businesses are becoming increasingly more concerned about future scale, as they should be. They also understand that the improvements in team efficiency and content strategy will be largely responsible for this future scale.

Switching to the cloud is a heavy investment, but it is a necessity to remain competitive today. You may be doing fine with your on-premise system now, but the longer you hesitate to switch, the more these above potential savings will dry up.

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