Cloud Applications Multiply ROI by 1.7 Times Over On-Premise Solutions

September 18, 2012

40 percent reduction in consulting, less internal application support and growing benefits over time drive ROI beyond the low initial cost and speed-to-deployment advantages


BOSTON – September 18, 2012 – Companies are devoting an increasing share of their IT budgets to cloud project over traditional on-premise applications, resulting in an average of 1.7 times more ROI, Nucleus Research has found. In addition to low upfront costs and faster time to deployment, cloud applications deliver substantial other business benefits from multiple factors driving the cloud ROI multiplier effect.

Nucleus finds cloud applications require on average 40 percent less investment on consulting than those deploying on premise solutions, which often include funding towards development and testing. Other factors in the cloud ROI multiplier effect are ongoing application support and business analysis, reducing support personnel expenditures by 25 percent. With the flexibility of cloud based applications business users can adapt and expand their use over time, seamlessly enlarging the user footprint while taking advantage of incremental upgrades to drive greater productivity.

“Cloud has arrived as the first and most viable choice for applications. At this point, on-premise is really only a consideration for businesses that do not plan to grow, change or upgrade their applications. In areas such as mobile access, integrated analytics, improved workflows, and more intuitive user interfaces, cloud applications have the flexibility that all businesses need to grow far beyond what on-premise applications can offer” said Rebecca Wettemann, vice president, Nucleus Research.

Recent deployments show organizations are likely to continue the recent trend of adopting cloud applications given the significant magnitude of the cloud ROI multiplier effect on most deployments. The ongoing time-to-value advantages brought to customers and cloud vendors from continuous ROI that cloud applications deliver is far more than what is necessary to justify the annual subscription fees for services.

About Nucleus Research

Nucleus Research is a global provider of investigative, case-based technology research and advisory services that provide real-world insight into maximizing technology value. For more information, visit or follow us on Twitter @NucleusResearch.