Businesses are turning to cloud services to reduce costs, but sometimes this strategy can backfire. This is especially true when you’re making a massive shift from an on-premises IT infrastructure to a partially or entirely cloud-based infrastructure. Cost overruns with the cloud don’t have to be the norm for this transition; proper preparation and migration strategies can prevent these unexpected expenses from dampening your enthusiasm for the cloud.
Movement to cloud infrastructure is inevitable
Non-cloud IT infrastructure spending is losing ground in the battle against cloud infrastructure. Spending on non-cloud infrastructure still makes up more than half of the all IT infrastructure expenditures, but cloud spending has been rapidly gaining ground. In 2016, traditional infrastructure accounted for 62.4% of spending. The next year, it dropped to 57.2% of infrastructure spending.
As cloud chips away at the dominance of traditional infrastructure, CIOs starting their cloud migration journey might be bouncing back and forth between public, private, and hybrid clouds. Many businesses opt for a hybrid option to get the best of all worlds, but it’s good to consider the benefits of public and private clouds before you make a final decision. For example, public clouds come with platforms to boost development and reduce operational workload while private clouds have become popular in industries where security and compliance are major issues.
Cloud migration is often driven by cost. If you’re only paying for what you use — either in seconds or in storage space — you should, theoretically, be paying less.
Runaway costs are a real issue
A study pitting Amazon Web Services (AWS) against an on-premises system found the cost of ownership of the on-premises system to be close to half of what AWS charged, even on a discounted, three-year contract. While the study itself leaves out “hidden” costs such as operational electricity expenses, it’s a great demonstration of how migration to the cloud should be a careful exercise.
CIOs and their C-suite counterparts have to remember that migrating to cloud services can also mean huge system and platform upgrades. In addition, savings can take a while to appear, if they show up at all.
Cost overruns are incredibly common during the migration phase, largely because it’s a new environment and takes some getting used to. The best defense against this risk is to thoroughly research your provider’s cost structure, your migration plans, and the planned cloud resource allocation throughout your company. Once the research is done, everyone who has access to your cloud needs to know when and how much they can use it to stay within budget.
IT departments coming from an on-premises system might not always fully consider the byte-by-byte costs, especially if they’re relying on estimates from your current infrastructure. Assign current costs to your initial infrastructure so you can later compare costs to new cloud infrastructure, as well as expected migration costs. This helps connect the two ideas, especially for team members who might not always pay attention to important emails from the IT department.
Uncovering your current costs and establishing a baseline
Determining the savings and efficacy of a system is difficult if you don’t have thorough initial data. A do-it-yourself infrastructure assessment tool can help set you on the right path, but outside advice can often get to the heart of the issue. Since having good assessment data is an important part of determining how well your cloud migration went, eliminating error by reaching out to a top advisory firm is the best option.
A good consulting firm can help you pinpoint the data you need. However, you can also get started on your own. Assemble IT operational cost data, a list of all hardware and software (including their ages), current needs for the new system, keys skills your staff needs, potential areas for IT performance improvement, your infrastructure governance, a risk management assessment, and a list of corporate goals and implementation benchmarks.
Once this data has been collected, organized, and reviewed by people within your company or in partnership with your business, projections for cloud costs during and after migration should be a lot more accurate. And the more aware you are of the potential costs, the happier you’ll be in the long run.
The experts at Windsor Group can help you uncover the whole story about your current IT infrastructure, as well as provide a strategy session to get you on the road to a smooth cloud migration. Schedule your session today.