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3 Steps to Predict Public Cloud Migration Costs

Cloud | Posted on November 24, 2017 by Jonathan White

There’s a simple reason why one in three businesses say their cloud migration was more expensive and complicated than expected. They planned it wrong!

But just because the explanation is simple, doesn’t mean the solution will be. Cloud migration using cloud services like Microsoft Azure is a complex affair, involving multiple new business paradigms, processes, and variables. All of which is incredibly daunting, and difficult, for a business to straddle – particularly those with little to no cloud experience.

What I’ve discovered working with Softchoice clients is with the right approach, you can develop a much more accurate understanding of what your cloud migration project will cost you. You can avoid unforeseen circumstances and end up getting the optimal cloud cost strategy.

Step 1: Start with “Why Migrate to a Cloud Solution” (and forget about cloud cost savings)

The first and arguably most important step when planning your cloud solution: Why migrate to the cloud? And why now?

Usually, I find there is a compelling event, something that triggered the conversation around cloud solutions.

  • Perhaps your key hardware is going end of life.
  • Maybe your software licensing agreements are up for renewal.
  • Maybe you had a devastating security breach, or are onboarding a new team across the country.

Whatever the answer, you need to be crystal clear about why cloud computing is on the table. Then you can properly consider your options and develop a deep understanding of whether it’s worth the move.

Here’s a little tip: your “Why” is not about cost savings!

Many people in the business world believe cloud solutions are primarily tools for costs savings. It’s not! In fact, cloud solutions often cost more than your existing on-premise solution, on the surface. The real value of cloud migration projects is due to the less tangible impact it has. Things like allowing your team to focus on innovation, shifting to OpEx models and improving productivity or time to market.

current state of data center environment before cloud migration

Step 2: Define the current state of your data center environment

Next up, you need a detailed and objective understanding of what your current data center environment costs to maintain, and its current usage through data analysis and objective measurements.

Unfortunately, this isn’t an easy process. It’s something many organizations fail to do correctly – if at all – during this crucial stage of cloud migration planning.

The reason it’s so hard is most businesses don’t possess the right tools to monitor and track their consumption of resources. And costs occur on many levels, across multiple business developments and are managed by many stakeholders.

That said, to create a solid current state profile, you must collect insights across three major categories:

Actual Data Center Usage and Consumption:

  • What resources are being used, and how much are you paying.
  • Everything from touching the storage, to the server, networking or your existing IT infrastructure.

NOTE: This isn’t about how your assets are configured – but how much of them are you actually using. On-premise configuration is almost never what you actually use – but hey, that’s why you’re migrating to the cloud!

Facilities and Utilities Cost:

Next, find out how much your data center is costing you from a utilities perspective.

Monthly cooling and power costs, and sometimes real estate, all add up to define your pre-cloud expenses. As with the previous step, you will want to know as much detail as possible about your contracts, your monthly costs as well as actual usage. Not all IT leaders have access to this so you may need to brand out to other departments to find these answers.

People Costs and Opportunities:

  • How much of your IT staff is dedicated to maintenance and infrastructure roles that simply won’t be needed?
  • More importantly, what kind of resources do you need/want in order to tackle your more innovative business priorities?

In the last stage you will develop a more robust answer to this, but start thinking now about resource re-allocation in the cloud.

Light bulb showing how you accurately predict your cloud cost strategy

Step 3: Accurately predicting your cloud cost strategy, aligned to business goals

Finally, it’s time to consider all the options to get a firm understanding of what the cloud costs you will incur – and how it will change your business.

At this stage, you conduct a detailed cloud cost comparison among various cloud solutions, vendors and your existing in-house costs. Be careful: there are many hidden costs, as well as opportunities, you need to be aware of when developing your cloud strategy:

Plan for surprise, hidden costs:

There is a long list of costs that catch businesses off-guard when operating in the cloud.

For example:

  • Data egress charges,
  • Spike to network bandwidth demand, as well as
  • Optimizing your data classification costs (e.g. don’t pay for top-tier data for rarely accessed data).

Identify dependencies:

This is one of the most important steps to properly roll out a new cloud solution. You must identify all your dependencies, and understand in which order, and to what extent, workloads and apps should move to the cloud. If you break one app by moving another to the cloud, you’ve just created a chain reaction that could impact a number of people!

Pick your first win:

Getting back to Step 1, you need to align your first move to the public cloud with your vision, in order to guarantee the most buy-in from decision makers. What are the low-hanging fruit, or the initiatives sure to make the biggest impact and align with your “Why”? Cloud projects must be clear and concise with cross-functional buy-in versus large campaigns lacking direction or cross-team support.

People transformation and alignments:

Now that your business is going through a cloud migration, what new skills will your existing team need to gain to keep the engines running? Training and education are much needed, often ignored, expenses. Ideally, you will also free up your team to focus on outcomes aligned to the business. What key priorities can you assign them to and how will that add to the success of your customers and your business?

Conclusion: Cloud migration may not be the easiest. But it is mandatory

A blog summary, however detailed, can’t do justice to the vast amount of work and time needed to properly predict how a cloud migration will impact your business. Especially in the second stage, we can’t stress enough how important it is to get data-driven, objective and measurable insights to fully understand your costs today, in order to compare them to what comes tomorrow.

If you had any questions or would like to learn more, get in touch with a Softchoice Representative.


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