TCO For a Cloud-Native Environment? $5.6 Million

A report published today by OutSystems, a provider of a low-code platform for building applications, estimates the total cost of building and maintaining a cloud-native IT environment is, on average, $5.6 million. More challenging still, the report notes it can take 18 months to achieve that goal.

OutSystems CTO Patrick Jean says the report makes it clear that organizations need to be sure the application they are building is fit-for-purpose for these types of complex IT environments. In many cases, organizations can achieve their goal using a low-code platform that is much less expensive to deploy and maintain, he added.

OutSystems calculated the TCO of a cloud-native application development environment based on what is required to build it and the personnel required to maintain it. On average, businesses will spend $2.7 million standing up their cloud-native infrastructure, spanning the architecting, building, managing, maintaining and scaling a built-from-scratch cloud-native infrastructure. The costs associated with tools and services account for 21% of the costs of this phase. Add in the cost of hiring and onboarding cloud-native experts such as architects and developers, and this phase of analysis accounts for 79% of the total cost of this phase.

The second phase covers the cost of application development, with organizations, on average, spending $2.9 million to build their first applications from scratch over a 12-month period.

OutSystems is making a case for building cloud-native applications using an enterprise-grade low-code platform that eliminates most of the heavy lifting associated with building and deploying applications. The overall goal is to eliminate much of the friction the development teams today encounter when building applications using legacy platforms, said Jean. Most organizations will not have the fortitude required today to build modern cloud-native applications without relying on a low-code platform, he adds.

The OutSystems report arrives when the pace at which organizations are building and deploying cloud-native applications on Kubernetes clusters is finally accelerating. However, there is also a debate over to what degree many of those cloud-native applications, like Kubernetes, are fit for purpose. As more enterprise IT organizations start to build and deploy cloud-native applications based on microservices, they are discovering that Kubernetes is one of several complex building blocks that need to be mastered. Kubernetes is best suited for highly distributed applications based on microservices that need to be managed at a hyperscale level. Many of the applications now being deployed on the platform might be better suited for a serverless computing framework that doesn’t require as much infrastructure and expertise to master.

Of course, the way TCO is calculated can vary widely. Once a cloud-native infrastructure environment is created, the cost of building and deploying subsequent applications steadily declines. Nevertheless, despite the prevalence of open source software, cloud-native computing does require a significant upfront investment to take advantage of the ability to dynamically scale infrastructure resources up and down. That capability should, over time, make it less expensive to run a cloud-native application than a legacy monolithic application that requires dedicated resources for each virtual machine it employs.

Mike Vizard

Mike Vizard is a seasoned IT journalist with over 25 years of experience. He also contributed to IT Business Edge, Channel Insider, Baseline and a variety of other IT titles. Previously, Vizard was the editorial director for Ziff-Davis Enterprise as well as Editor-in-Chief for CRN and InfoWorld.

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