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Cloud-native development costs on average $5.6M - report
Thu, 9th Mar 2023

OutSystems, a global leader in high-performance application development, has released new research breaking down the costs and staffing challenges of building a cloud-native development infrastructure from the ground up.

The research, 'Cloud-Native Development Report: The High Cost of Ownership', found the total cost of ownership (TCO) of a traditionally developed cloud-native approach is, on average, $5.6 million and can take 18 months.

To calculate the TCO of a cloud-native application development infrastructure, OutSystems analysed the costs accumulated when building and scaling a cloud-native infrastructure and building the first apps on that new platform.

The report also includes detailed analysis of building a team with the required cloud-native expertise.

The TCO is broken down into two phases:

  • Phase 1 - Infrastructure environment costs: On average, businesses will spend $2.7 million standing up their cloud-native infrastructure. These costs include architecting, building, managing, maintaining and scaling a built-from-scratch cloud-native infrastructure. The costs associated with tools and services correspond to 21% of the costs of this phase. Due to the complexity, hiring and onboarding cloud-native experts, such as architects and developers, to the team also contributes to the high cost. This, coupled with the salary cost, equates to 79% of the total cost of this phase.
  • Phase 2 - Application development costs: On average, businesses will spend $2.9 million building their first apps on this new infrastructure. These costs account for a 12-month application development timeline a conservative estimate and the effort required to build the apps with traditional coding as well as expansion and maintenance of the underlying infrastructure to support those new cloud-native apps. These costs include training and reskilling of in-house developers.

The expensive nature of the first phase of building a cloud-native infrastructure environment partly stems from the hiring and onboarding costs behind building a team with such specialised skills. Kubernetes, microservices, cloud-native services architecture, CI/CD and DevSecOps are among the most difficult skills to hire for and demand the highest salaries, the report states.

The backend costs of hiring talent, such as seeking out recruiting agencies/professionals and time spent interviewing and supporting new hires, are also contributing to a high total cost of ownership.

Accounting for the rest of these Phase 1 costs is the amount of effort even after a team of experts has been assembled required to integrate the dozens of new services and technologies together in order to assemble the run-time infrastructure.

Patrick Jean, CTO of OutSystems, says, "Cloud-native applications have the clear advantage over legacy software. There's no debate that cloud-native applications respond to the market faster, offer better user experience and provide superior scalability and resilience.

"But this shift also represents an overhaul of the traditional software development process one that most companies are not equipped to handle. High-performance low-code offers a way to dramatically accelerate the entire process as well as reduce the strain on developers and minimise the overall total cost of ownership."

Now generally available worldwide, OutSystems Developer Cloud (ODC), the newest solution in the OutSystems Platform, is the first high-performance low-code solution for building cloud-native applications. It combines the radical productivity of low-code with the essential capabilities required to build strategic, mission-critical, cloud-native apps.

ODC is built on architecture that includes Kubernetes, Linux containers, microservices, serverless and AWS native cloud services to tackle everything from data and computing to security and networking. With ODC, customers can rapidly and securely build applications that scale to hundreds of millions of users.

The complexity and exploding diversity of cloud services means it can take months to years and millions of dollars to implement a typical cloud-native infrastructure from the ground up all before developers can even begin building their first application. High-performance low-code for a cloud-native world helps organisations significantly ramp up developer productivity and avoid spending the millions of dollars it would take to build cloud-native applications from scratch.