Vercel: Detailed Research on Benefits and ROI

Introduction: Examining the Impact of Vercel in Web Development

At Fishtank, we have experience implementing Sitecore XM Cloud and deploying Vercel for enterprise organizations across various industries. This article will examine the value and return on investment (ROI) that Vercel may bring to organizations, based on data and examples from a recent study. I found this content quite compelling, so forgive me if my attempt to present it factually leaves it feeling a little dry.

The Forrester Total Economic Impact™ Study: An Overview

This article draws from a report commissioned by Vercel and conducted by Forrester Consulting: "The Total Economic Impact Of Vercel's Frontend Cloud". This study, published in January 2024, analyzes the cost savings and business benefits that may be enabled by Vercel.

Forrester's Total Economic Impact (TEI) methodology aims to enhance a company's technology decision-making processes. It helps vendors communicate the value proposition of their products and services to clients, while also assisting companies in demonstrating and realizing the potential value of IT initiatives to management and stakeholders.

For this study, Forrester interviewed representatives from five organizations with experience using Vercel. The insights and data from these interviews were aggregated and combined to create a composite organization, providing a framework for evaluating the potential financial impact of adopting Vercel.

This approach offers a foundation for understanding the potential benefits of implementing Vercel in enterprise environments. As we explore the results of this study, we'll examine how Vercel may affect development processes and potentially contribute to business growth and customer satisfaction.

1. Breaking Down the Executive Summary: A Multi-Part Overview

The Forrester study's executive summary provides an overview of the potential impact of Vercel. Let's break it down into key components:

1.1 The Role of User Experience

The study suggests that performant, personalized, and dynamic websites are important for converting customers, while slow and unreliable websites may lead to abandonment and churn.

1.2 Next.js and Vercel

The report examines how five front-end development teams used Next.js and Vercel to build websites. This combination is suggested to have improved website performance, increased developer productivity, and lowered infrastructure costs.

1.3 Understanding Vercel

Vercel is described as a web application development and deployment platform. It provides software teams with environments for developing, deploying, and iterating on web experiences. This is achieved through automatic provisioning, scaling, and securing of dynamic web content across global edge networks.

1.4 The Next.js Connection

The study notes Vercel's role in developing and maintaining Next.js, an open-source framework for React. While Next.js applications are described as well-suited for Vercel, it's noted that Vercel also integrates with other open-source frameworks and languages.

1.5 The Composite Organization

Forrester created a composite organization based on the interviewed companies. This hypothetical entity is a large enterprise with $1.5 billion in annual revenue, a website with 250 million users, and a team of 50 front-end developers supported by designers and marketers.

1.6 Pre-Vercel Challenges

Before migrating to Next.js and Vercel, the organizations reportedly faced several challenges:

• Inefficient front-end development workflows
• Poor website user experiences
• Developers spending up to 40% of their time managing infrastructure instead of building new features
• Long page load times
• Frequent downtimes
• Poor search engine optimization (SEO)
• User experiences leading to customer loss

1.7 Post-Vercel Changes

After implementing Next.js and Vercel, the organizations reported several changes:

• Performant, content-rich websites
• Dynamic personalization for users
• More efficient development workflows
• Improved developer productivity
• Better team collaboration
• Faster iteration cycles
• Increased feature delivery
• Changes in website traffic and conversion rates

1.8 Key Statistics

The study reports the following statistics for the composite organization:

• Return on Investment (ROI): 264%
• Net Present Value (NPV): $9.53M

These figures suggest potential financial benefits from implementing Vercel.

By breaking down the executive summary in this way, we can see the nature of the benefits Vercel is suggested to bring to organizations. The study examines how Vercel may address pre-existing challenges, enable new capabilities, and potentially deliver financial returns.

2. Analyzing the Key Findings: Examining Vercel's Potential Impact

The Forrester study presents several key findings that suggest multifaceted benefits of implementing Vercel. Let's explore each of these findings:

2.1 Change in Infrastructure Management Time

The study suggests Vercel reduced the time developers spent managing front-end infrastructure.

• Before Vercel: Developers spent up to 40% of their time on infrastructure management.
• After Vercel: 90% reduction in time spent on infrastructure tasks reported.
• Impact: Developers reportedly saved time, which was redirected to enhancing websites and digital products.
• Value: For the composite organization, this time saving was estimated at $2.4 million.

Summary: The study suggests Vercel's automation of infrastructure-related tasks may free up developers to focus on other tasks.

2.2 Changes in Code Deployment Process

The study reports improvements in the efficiency of building and deploying code with Vercel.

• Time Change: 80% less time spent on building and deploying code reported.
• Release Frequency: More frequent releases reported.
• Quality: Streamlined workflows and features like Preview Deployments suggested to enhance code quality.
• Value: Time savings during code releases were estimated at $489,000 for the composite organization.

Summary: Faster build times and smoother releases with Vercel are suggested to lead to more frequent deployments, potentially improving development efficiency.

2.3 Changes in Feature Development and Website Enhancement

The study suggests Vercel enabled development teams to deliver more features and improvements.

• Quantity: Four times more major website enhancements reported.
• Performance: Up to 90% improvement in website performance metrics reported.
• User Experience: Creation of performant, dynamic, and personalized user experiences noted.
• Business Impact: These enhancements are suggested to have driven business value by improving conversion rates and reducing abandonment.

Summary: The study suggests Vercel's capabilities may allow development teams to work faster and more efficiently, potentially resulting in more frequent website improvements.

2.4 Improved Customer Conversion

The study suggests the enhanced user experience led to improvements in conversion rates.

• User Experience: More engaging, dynamic, and performant web experiences reported.
• Conversion Change: Increase in conversion rates noted.
• Financial Impact: Generated $2.6 million in incremental profits estimated for the composite organization.

Summary: The improved website performance and user experience are suggested to have translated to business growth through higher conversion rates.

2.5 Changes in Web Traffic and Revenue

The study suggests Vercel contributed to improvements in website visibility and traffic.

• Performance Metrics: Improved core web vitals (e.g., layout shift, page load times) reported.
• SEO: Enhanced technical SEO noted.
• Reliability: Improved site uptime during high-traffic periods reported.
• Financial Impact: Generated $7.7 million in incremental profits estimated for the composite organization.

Summary: By improving various aspects of website performance and reliability, the study suggests Vercel helped drive more traffic to websites, potentially leading to increased revenue.

2.6 Overall Impact

The combination of these benefits resulted in the following overall impact for the composite organization:

• ROI: 264% return on investment.
• NPV: $9.53 million net present value.

Net Present Value (NPV) is a financial metric that calculates the present value of all future cash flows (both inflows and outflows) over the entire life of an investment. It takes into account the time value of money, recognizing that money available now is worth more than the same amount in the future due to its potential earning capacity. A positive NPV indicates that the projected earnings generated by a project or investment exceed the anticipated costs, suggesting it's potentially a profitable venture.

These figures suggest potential financial advantages of implementing Vercel, indicating that the platform may not only improve development processes but also contribute to the bottom line.

In conclusion, the key findings from the Forrester study present a picture of Vercel's potential value. From changes in development workflows to potential business growth through improved website performance, the study suggests Vercel could be a useful tool for organizations looking to enhance their web presence and development capabilities.

3. Real-World Examples: Summarizing the Case Studies

The Forrester study included interviews with representatives from five organizations across different sectors. Let's examine the key facts, figures, and quotes from these case studies, highlighting the specific changes observed in each sector.

3.1 E-Commerce - Company A

• Release Frequency: Changed from monthly to bi-weekly.
• Build Time: Changed from 20 minutes to 3 minutes (85% reduction).
• Deployment Failures: Decreased from an average of 30 failures per deploy to near-zero.
• Rollback Time: Changed from 20 minutes to seconds.
• Traffic Handling: Reported ability to handle 5-10 times usual traffic during peak periods without downtime.
• Sales Impact: Direct-to-consumer sales increased by 62% in the first year after deploying the new site.

Quote: "The developer experience is just so much better. ... Ultimately, we're just catching bugs earlier and often. And that's been a huge, huge win." - Manager of Engineering

3.2 E-Commerce - Company B

• Development Timelines: 75% shorter for specific features reported.
• Example: A product customization tool that originally took four months to develop was rebuilt in one month by a smaller team.
• Technical SEO: Work that would have taken three sprints before was completed in days.

Quote: "Development has drastically accelerated now versus in the old world." - Principal Engineer

3.3 Financial Services - Company C

• Core Web Vitals: Improved by 75%.
• Page Load Times: Pages that previously took 16+ seconds to load now load in under 2 seconds.
• Image Optimization: Optimized over 7,000 images across the site.
• Conversion Rates: 5% increase in conversion rates correlated with a 13% improvement in site performance.

Quote: "We're talking about millions of dollars just from using a new framework and architecture and a very low-effort migration." - Senior Engineer

3.4 Financial Services - Company D

• Homepage Size: Changed from 186 KB to less than 20 KB.
• Cumulative Layout Shift (CLS): Changed from 0.15 to 0.01 (below the recommended 0.10).
• First-Page Load Times: Reduced by about 200 milliseconds.
• Largest Contentful Paint (LCP): Reduced by more than 400 milliseconds.
• Website Impressions: Changed from 3 million to 5 million impressions a day.

Quote: "In terms of experience, you're getting the page quicker, it's rendering quicker — it's a better experience, even on low-end devices." - Director of Infrastructure

3.5 Media Sector - Company E

The media company reported these changes:

• Release Cadence: Changed to twice per week from irregular releases.
• Deploy Time: Changed to 40 minutes.
• Change Failure Rate: Changed from 75% to a lower rate.
• SEO Performance: Changed from only 2-3% of pages ranking well to a higher percentage.

Quote: "Stability is the number one goal. We have peaks of traffic around major news stories. The joke before was that we've never had a major news story where the website hasn't broken. After Vercel, our website just worked through a major event." - CTO

3.6 Cross-Sector Observations

Across all sectors, common changes were noted:

• Infrastructure Management: Time spent on infrastructure management reduced by 90%.
• Code Deployment: Time spent on building and deploying code reduced by 80%.
• Feature Delivery: Four times more major website enhancements delivered.
• Website Performance: Improvements of up to 90% in key metrics.

These case studies suggest that regardless of the sector, Vercel may deliver changes in development efficiency, website performance, and business outcomes. The consistent theme across all interviews was the impact Vercel had on both the development process and the end-user experience, potentially driving business value.

4. Vercel's Impact: By The Numbers

To examine the magnitude of Vercel's potential impact, let's consolidate the key numerical findings from the Forrester study:

1. Return on Investment (ROI): 264%
2. Net Present Value (NPV): $9.53 million
3. Infrastructure Management Time Reduction: 90%
4. Code Deployment Time Reduction: 80%
5. Feature Delivery Increase: 4x more major website enhancements
6. Website Performance Improvement: Up to 90%
7. Conversion Rate Impact: $2.6 million in incremental profits
8. Website Traffic Impact: $7.7 million in incremental profits
9. Build Time Reduction: Up to 85% (from 20 minutes to 3 minutes in one case)
10. Page Load Time Improvement: Up to 87.5% (from 16 seconds to 2 seconds in extreme cases)
11. Website Impressions Increase: Up to 66% (from 3 million to 5 million daily in one case)
12. Direct-to-Consumer Sales Increase: Up to 62% in the first year for one e-commerce company

These numbers suggest Vercel's potential impact across various aspects of web development and business performance. From time savings in development processes to increases in website traffic and sales, the study indicates Vercel may be a useful tool for organizations looking to enhance their digital presence and operational efficiency.

5. A Critical Perspective: Considering Limitations

While the Forrester study presents evidence for the potential value of Vercel, it's important to approach these findings with a critical perspective and consider some potential limitations:

5.1 Scale of Organizations

The study focused on large enterprises with significant resources. The composite organization had $1.5 billion in annual revenue and a team of 50 front-end developers. This scale allowed for substantial investments and resulted in correspondingly large returns. Smaller organizations may not see benefits of the same magnitude.

5.2 Applicability to Smaller Organizations

While the principles of improved developer productivity and website performance may apply universally, smaller organizations might not have the same complex infrastructure challenges that Vercel addresses in large enterprises. The ROI for smaller teams might be different, potentially still positive but perhaps not as dramatic.

5.3 Investment Required

The study doesn't deeply explore the total cost of ownership, including potential expenses for training, migration, and ongoing maintenance. These costs could be significant, especially for organizations with complex legacy systems.

5.4 Generalizability of Results

The study is based on interviews with five organizations. While this provides valuable insights, it's a relatively small sample size. The experiences of these organizations may not be representative of all companies across different industries and sizes.

5.5 Long-term Benefits

The study focuses on a three-year period. It's unclear how the benefits might change over a longer timeframe, especially given the rapid pace of change in web development technologies.

5.6 Dependency on Vercel

Adopting Vercel may create a dependency on their platform. Organizations should consider the implications of this in terms of vendor lock-in and long-term strategy.

5.7 Comparison with Alternatives

While the study shows the benefits of moving to Vercel from legacy systems, it doesn't provide a comprehensive comparison with other modern web development and hosting platforms. This context could be valuable for organizations considering various options.

5.8 Impact of Other Factors

The study attributes significant business improvements to the adoption of Vercel. However, it's important to consider that other factors, such as changes in marketing strategies or market conditions, could have also contributed to these improvements.

By considering these limitations, organizations can make a more balanced assessment of whether Vercel is the right choice for their specific needs and circumstances. While the potential benefits are significant, each organization should carefully evaluate how these findings apply to their unique situation.

What This Means for Sitecore XM Cloud

The potential benefits of Vercel, as suggested by the Forrester study, have implications for Sitecore XM Cloud users. Vercel is the first front-end website host officially supported by XM Cloud, which could streamline the integration process for organizations using both platforms.

The combination of Sitecore running on Next.js, supported by the creators of Next.js (Vercel), presents an interesting proposition to say the least. This alignment could potentially lead to optimized performance, smoother updates, and a more cohesive development experience for teams working with both technologies.

However, it's important to note that Vercel is not the only option for hosting Next.js applications. Other competitors in this space include:

Netlify

While not the focus of this study, Netlify offers similar performance benefits for Next.js applications. It provides a robust platform for hosting static and dynamic websites, with features comparable to Vercel in many aspects.

Other Platforms and DIY Server Options

It's possible to host a Next.js front-end on various other platforms and servers. However, these alternatives may not offer the same level of operational benefits and simplicity as Vercel or Netlify. They might also potentially sacrifice some performance advantages. While these options exist, they may not provide a direct comparison to the specialized services offered by Vercel or Netlify.

The choice of hosting platform should be based on an organization's specific needs, resources, and existing technology stack. While Vercel shows promise, especially in conjunction with Sitecore XM Cloud, each organization should evaluate its options carefully.

Closing Thoughts: Solution of the Future

Vercel has positioned itself as a significant player in the front-end development and hosting space. The Forrester study suggests it may offer substantial benefits for large enterprises. At Fishtank, we have experience implementing Sitecore XM Cloud solutions for various organizations.

As the landscape continues to evolve, the combination of Vercel and Sitecore XM Cloud presents interesting possibilities. This pairing could potentially offer a powerful solution for organizations looking to enhance their web presence and streamline their development processes.

Vercel And the Enterprise CMS World

Sitecore XM Cloud is unique in that it’s a SaaS enterprise CMS that has been built with what I would I call native Vercel support. When you’re setting up your XM Cloud projects, you can select you Vercel instance and have a nearly automatic setup.

Obviously this research makes Vercel a compelling option. In our experience Sitecore XM Cloud is a perfect pair.

If you’re looking for to get started modernizing your stack and looking for strong partner, please reach out to us at Fishtank or directly to myself via LinkedIn.

Good luck and thanks a lot for reading.

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