Many businesses, from startups to seasoned firms and small to large-scale organizations, are considering the benefits of migrating on-premises IT infrastructure to cloud computing. Many of our clients have found a number of benefits to such a move, including optimized flexibility, improved scalability, and reduced costs. Before you take the leap, it’s important to understand both the potential costs as well as the cost savings associated with migrating to the cloud environment.
Understanding current IT Infrastructure costs
In order to conduct a cost-benefit analysis for cloud migration, your organization needs to have a clear idea of what your current costs are for your IT operations. A thorough breakdown of your current costs will benefit you in two important ways: First, you’ll get a clear idea of just how much you spend, and second, you’ll begin to see what your operations in the cloud would look like, especially revealing how much your operations will require in terms of cloud resources. There are two areas you need to consider:
The most obvious direct costs are essentially the hardware and software that you have for your on-premises IT infrastructure. Getting a full understanding of how many servers you have and how much capacity you currently use will help you create a clear picture of your direct costs, but it also serves a second useful purpose. Reviewing your current operations will reveal any inefficiencies or indicate that you may be at or near capacity. This is especially helpful information as you consider your options moving forward. But your hardware and software also require a significant amount of other services that fall into the direct costs category. This includes any warranties that you maintain as well as contracts and software licenses. It’s also important to have your accounting team provide you with information about any parts and supplies purchases that are necessary for maintaining your system and ensuring that it is running smoothly. Other direct costs include labor — your IT staff, in particular — the facilities where you house your servers, and the cost of internet connectivity.
Indirect costs are sometimes a little more challenging to calculate, as your staff may need to estimate how many hours they spend on things such as training or onboarding new members of your IT team. But it’s important to consider all of the staffing resources your IT operations draw on and begin pricing that out.
Your audit of indirect costs should also include calculating just how much your business and your clients’ businesses lose for every minute your servers are down and you’ve lost connectivity. Your IT staff should be able to give you specific data regarding how often this has occurred in the last year and how long each event lasted. Obviously, what you’ll have to estimate is how much one of these events impacts your reputation and your clients’ loyalty.
Estimating cloud infrastructure costs
The process of reviewing your current operations is a necessary one, as it not only provides a clear picture of what you use, how reliable it is, and how much it costs, but it also gives you the information you need to estimate your potential cloud infrastructure costs. There are a lot of cloud providers, and many of them provide cost calculators. One such tool is the AWS Pricing Calculator, which can give you a good idea of the total cost of ownership (TCO). In order to estimate your potential costs effectively using the calculator, you’ll need to respond to its prompts for the information you have gathered when determining your current direct and indirect costs. If you don’t happen to have all of the information the calculator requests, you can select certain scenarios that it provides in order to get an idea of your costs.
During the migration process, you will pay a fee to move your data, but you’ll also still be running your regular operations even as the migration project is underway. In addition, as data is being migrated, you need to be sure that the data you have remaining on-prem and what you’ve already moved to the cloud environment remain in sync with one another. This is one of the biggest costs of the migration process because it involves a lot of labor to ensure that you maintain the integrity of your data.
Another important step is making sure that everything you have previously been running in your on-premises environment will actually run properly in the cloud. Integrating your systems with the cloud and then testing to ensure that everything keeps its original functionality is crucial.
You may not have the ability to complete a migration project using your own staff. After all, it’s a major undertaking, and it will likely require the full-time attention of your IT services team. This is one of the many reasons why hiring a team like ThorTech Solutions to help you with your migration plan is so important—it frees up your in-house team to continue doing the work they always have done. But there are other benefits to ThorTech leading your project. We have experience with migrations for multiple organizations of varying size, scope, and complexity, and we are well-equipped to anticipate and respond to any issues, and that results in a much more streamlined process.
Once your cloud migration project is complete and you’re reaping the cost savings and other benefits of migrating your on-premises infrastructure to the cloud environment, you’ll still incur post-migration costs. The direct costs will include fees for cloud services from your cloud provider, and those are likely to change as your business grows. But the scalability of your cloud services means that you’ll still only pay for what you’re using. You’ll also have recurring labor costs, either for your own IT staff or for continued support from a cloud services management consultant. Training, security, and compliance will also be ongoing costs to keep everything running smoothly. Integration and testing will continue throughout as well as you add or change functionality.
If you’re interested in exploring the benefits of migrating to the cloud infrastructure with a team you can trust, schedule a complimentary call with one of our experts.