In order to calculate the total cost of ownership for developing cloud-native application infrastructure, OutSystems analyzed the costs incurred when setting up and scaling cloud-native infrastructure, as well as just when building the first applications on the same platform. The report also includes a detailed maintenance cost analysis with a dedicated team. Total cost of ownership is divided into two phases:
- Stage 1: Infrastructure costs – On average, companies spend $2.7 million to set up their cloud-native infrastructure. These expenses include creating, building, managing, maintaining, and scaling a cloud-native infrastructure built from scratch. The costs associated with tools and services correspond to 21% of the total price for this first phase. The complexity of the task, as well as the need to hire and integrate cloud-native experts such as architects and developers within the team, contributes to the high cost of the operation. These expenses, along with payroll costs, account for 79% of the total cost for this phase.
- Phase 2: Application development costs – On average, companies spend $2.9 million building their first applications on their new infrastructure. This amount takes into account the time required to develop applications (about 12 months), the effort required to build applications using traditional coding, and the expansion and maintenance of the required infrastructure. It also includes the training and development of in-house developers.
The high cost of Phase 1 is explained in part by the recruitment and integration costs associated with building a team with very specific skills. Kubernetes, microservices, cloud-native architecture, CI/CD, and DevSecOps are some of the hardest skills to hire and earn the highest salaries. Costs related to recruiting talent, finding recruiters or professionals, or time spent interviewing and supporting new recruits also contribute to a higher total cost of ownership. The rest of the expense is attributed to the amount of effort it takes – even after building a team of experts – to integrate the dozens of new services and technologies that go into the infrastructure assembly.
Patrick Jane, Director of Information Systems at OutSystems says:
Cloud-native applications have a distinct advantage over legacy systems. There is no doubt that cloud-native applications are responding faster to market, providing better user experience, and providing greater scalability and flexibility. However, we must remember that this change also represents an overhaul of the traditional software development process – a process that most companies are not equipped to handle. High performance low code provides a way to greatly speed up the entire process as well as reduce stress on developers and reduce the total cost of ownership.
Take advantage of high-performance low-code code to reduce total cost and execution time
Recognizing the cost and pressure that developing cloud-native infrastructure places on businesses, OutSystems developed OutSystems Developer Cloud (ODC), the first high-performance, low-code solution for building cloud-native applications. It combines low code throughput with core capabilities for building high-performance cloud-native applications. ODC relies on a modern architecture that integrates Kubernetes, Linux containers, microservices, and AWS cloud-native and wireless services in order to be able to intervene in various areas, from data to IT, including security and networking. With ODC, customers can quickly and securely build applications that scale to hundreds of millions of users.
The complexity and explosion in diversity of cloud services means that it can take months or even years and millions of dollars to build a comprehensive traditional cloud-native infrastructure, all before developers can start building their first application. High-performance low-code in a cloud-native ecosystem helps companies significantly increase developer productivity and reduce expenses when building cloud-native applications.
The Cloud-native Development: High Cost of Ownership report analyzes the resources required to integrate Kubernetes, cloud-native tools, and microservices, and identifies the true cost of the skills and infrastructure required to become cloud-native. Infrastructure and application development costs are taken into account to determine the total cost of ownership (TCO). The report also takes into account variables such as company size, internal skills, the country in which teams are employed, teams’ operating models, and the complexity of the suite of applications to be updated. Overall, the total cost of ownership (TCO) model, infrastructure tools and services, resources required for each phase and associated costs have been designed and calculated by in-house experts and validated by industry analysts and numerous clients who have even applied the process of adopting a “cloud-native” infrastructure.
OutSystems was founded in 2001 with the mission of empowering every company to innovate through software. OutSystems’ low-code platform gives technology leaders and developers the tools to quickly build and deploy their own applications. The company’s community includes more than 600,000 members, and more than 400 active partners and customers in 87 countries and in 22 industries.
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