In this guidance, AWS defines cloud adoption as both migrating to the cloud and adopting a cloud operating model that supports continuous modernization. Migration is about moving existing workloads to AWS using the “7Rs” strategies: - Retire - Retain - Repurchase - Rehost - Relocate - Replatform - Refactor In this framework, migration specifically refers to the strategies used to move workloads to the cloud: retire, retain, repurchase, rehost, and relocate. Modernization is what happens next. It is the incremental change to workloads, processes, and organizations through: - Replatforming - Refactoring (including rewrite and rearchitecture) The document positions migration and modernization as parts of the same business value spectrum: - Rehost migrations typically deliver improvements in availability, resiliency, security, agility, and cost. - Refactoring applications to cloud-native services (for example, using serverless, containers, and managed services) builds on those gains and can drive significant business agility and revenue growth. The guidance cites that application refactoring on AWS can lead to revenue growth of up to 43%. The key takeaway for executives: moving to AWS is the starting point, not the finish line. You migrate to unlock initial benefits, then modernize continuously to maximize long-term business value, agility, and competitiveness.

The guidance highlights that AWS cloud adoption is closely linked to improvements in profitability and competitiveness, and that these benefits grow with both time and the percentage of workloads migrated. Key data points from the referenced studies: 1. Long-term financial impact over six years - EBITDA growth: 42.6% - Enterprise Value (EV) growth: 73.2% - Revenue per employee growth: 82.8% - Infrastructure costs for migrated applications decrease on average 20% per year over six years (from about 14% in year 2 to 30% by year 6). 2. Impact of time on AWS Businesses see increasing annualized EBITDA growth the longer they use AWS: - 1–3 years on AWS: 1.8% annualized EBITDA growth - 3–6 years: 5.4% - More than 6 years: 7.1% Enterprise Value (EV) follows a similar pattern: - 1–3 years: 5.4% annualized EV growth - 3–6 years: 8.3% - More than 6 years: 12.2% Revenue per employee also increases over time, from about 7.1% annual growth in the first three years to 13.8% by year six. 3. Impact of migration coverage (how much you move) Financial performance also correlates with how much of the digital estate runs on AWS: - Up to 50% of workloads on AWS: ~3.9% year-over-year EBITDA growth - 76% or more of workloads on AWS: ~9.2% year-over-year EBITDA growth The document summarizes this as the “AWS Cloud Value Flywheel”: - Investments in migration and modernization increase IT productivity through automation. - Productivity gains free teams to focus on higher-value work and faster innovation. - Faster innovation and time to market increase business value and profitability. - Improved financial performance then funds further cloud adoption and modernization. For executives, the implication is to prioritize getting a critical mass of workloads onto AWS and to stay committed over multiple years to fully realize these compounding benefits.

The guidance recommends a clear, staged approach that balances speed to value with long-term modernization. 1. Rehost first, then modernize - The fastest path to initial cloud value is to rapidly rehost most workloads to AWS. - After rehosting, you modernize infrastructure and applications on AWS to amplify benefits. - Rehost delivers a step change in availability, resiliency, security, agility, and cost. - Modernization (replatforming and refactoring) then drives deeper agility and revenue growth. 2. Treat migration as a “Migration Conveyor” The document introduces the “Migration Conveyor” model: - Think of migration as a conveyor belt that moves workloads into AWS quickly. - As workloads arrive in AWS, they are ready for infrastructure and application modernization. - This approach avoids getting stuck in long refactoring debates during migration and reduces the risk of “two-putt refactoring” (refactoring twice after rehosting). 3. Handle specialized workloads differently Some workloads need a different approach: - Specialized workloads (for example, mainframe, Oracle, SAP, or those with unique hardware or complex licensing) often cannot simply be rehosted. - For these, the guidance recommends: modernize first (replatform or refactor), then migrate. 4. Plan for continuous modernization from day one Once in AWS, organizations should: - Develop a plan to move toward cloud-native applications. - Avoid building and operating undifferentiated services and infrastructure; instead, use AWS managed services. - Prioritize refactoring using a mix of serverless (for example, AWS Lambda), containers (for example, AWS Fargate), and managed services to reduce cost and increase productivity and agility. - Establish a data strategy early, using managed databases (for example, Amazon Aurora) and analytics services (for example, Amazon Redshift, Amazon Kinesis, Amazon Athena) to speed up insights and decision-making. 5. Use a structured migration journey: assess, mobilize, migrate The guidance outlines three phases, supported by the AWS Migration Acceleration Program (MAP): - Assessment: Run an automated migration assessment (for example, with AWS Migration Evaluator) to inventory digital assets, understand utilization, and build a data-driven business case comparing on-premises TCO to projected AWS TCO. - Mobilization: Build the cloud foundations—operating model, tools, processes, and capabilities—to rehost at scale and operate mission-critical applications on AWS. - Migration and modernization: Execute large-scale rehosting, then systematically replatform and refactor to continue improving cost, agility, and innovation capacity. For executives, the recommended strategy is to: - Use an assessment to quantify the opportunity and align stakeholders. - Set clear migration goals and tenets based on that business case. - Rehost most workloads quickly to start the AWS value flywheel. - Modernize continuously on AWS, with special handling for complex, specialized workloads.