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Hard Financial Analysis Cloud Migration

Cloud Migration

#Technology/IT #Technology #Analytics
ProHub Comment

This case tests the candidate's ability to structure a financial analysis, identify relevant cost components (CapEx vs. OpEx), and calculate ROI across a multi-year horizon. The candidate must proactively ask for missing data, perform accurate calculations across three years with varying migration percentages, and articulate both financial and strategic benefits.

Estimated Time 35 minutes
Difficulty Hard
Source PeterK
10 / 100
Boards is a visual analytics platform for B2B clients. Given recent trends, they’d like to build a cloud version of their platform. What would be the 3-year ROI of migrating all of their 1,000 servers to cloud?

Clarifying Information

  1. Exhibit 1. Project Execution Plan and Server Costs
  2. Expected cost savings from cloud migration are 30% of annual server costs
  3. The life cycle of a server is 10 years
Mock Interview
Interviewer

Boards is a visual analytics platform for B2B clients. Given recent trends, they'd like to build a cloud version of their platform. What would be the 3-year ROI of migrating all of their 1,000 servers to cloud?

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

Boards should migrate 1,000 servers to cloud over three years (60% in 2023, 100% in 2024-2025), yielding $3.5M in cumulative savings against $3.5M in migration costs, resulting in a 100% three-year ROI. The calculation requires careful attention to the phased migration timeline and the 30% savings multiplier applied to annual server costs.

Key Insights:

  1. Structure the problem around investment costs (2023-2025 migration investments totaling $3.5M) versus benefits (annual savings of 30% of server operating costs, scaled by migration percentage each year)
  2. Annual server cost is $9k (purchasing $10k/10 years = $1k depreciation plus $3k running costs plus $5k maintenance)
  3. ROI calculation: ($1.6M 2023 benefit + $2.7M 2024 benefit + $2.7M 2025 benefit) / ($2M + $1M + $0.5M investment) = $3.5M / $3.5M = 100%
  4. Beyond financials, consider strategic benefits (scalability, computational power, reduced operational complexity) and risks (vendor lock-in, switching costs, price dependency)