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Best practices to avoid Cloud Migration hidden & indirect Costs
Cloud computing has transformed the way companies around the world do business in ways that many people don’t even realize. Cloud and cloud computing are long-running and the demand for infrastructure as a service, platform as a service, and software as a service is booming. Nevertheless, multiple reports show the pitfalls of cloud migrations from entire infrastructures or application landscapes. In multiple cases, a cloud migration from planning to go-live can take up to two years. The pitfalls of cloud computing lie in subtle elements such as different billing modalities of cloud providers and technical defaults in their own IT infrastructures. These elements can quickly destroy cost advantages unless IT specialists within the company do their homework and guard themselves against evil surprises.
From the experience that Xorlogics has gained in its projects regarding cloud migration, five essential recommendations emerge that are decisive for the success or failure of cloud migration.
- There’s a common misconception among IT managers in small and medium-sized businesses that the public cloud inevitably cuts costs and generates the best returns. All investment decisions should be fundamentally based on facts, instead of relying upon one’s gut feeling. The actual costs of public versus hosted private cloud must be studied in detail. Most companies and private IT users now rely on the ubiquitous cloud – both at home and at work. The pros and cons of the cloud are well known. But the hidden costs can sometimes become very painful. It’s particularly important for decision-makers in companies to carefully check the front end to avoid unpleasant surprises later.
- When it comes to the in-depth planning of when and which workloads should be migrated to the cloud, the existing managed contractual obligations that are connected to the existing data center are overlooked. This begins with rental contracts and ongoing depreciation of the hardware as well as their maintenance and support contracts. It is therefore important to use the terms to clarify the total costs of such on-premises contracts in advance, which accumulate in parallel to cloud operation. This enables a realistic cost-benefit calculation of the migration to the cloud and eases the decision of which steps and in which order the changeover should take place.
- Most public cloud providers can meet all common cloud requirements from a single source. The costs and services vary, however, and relying on a single cloud provider can be very risky. Instead of relying on one provider, a multi-cloud environment is beneficial for the long term. According to a study by Accenture, out of enterprises that have already moved to the cloud, 93% have adopted a multi-cloud environment that promises data security for companies by encoding data with specific techniques and distributing it across different clouds for greater protection against hacker attacks and data loss. Companies – willingly or not- are confronted with the requirements to adopt multi-cloud management. Those who are technically and organizationally prepared with appropriate solutions, experts and processes avoid cost traps – for example through workload analyses for better forecasts, rightsizing and the optimization of costs, the active use of the elasticity of cloud capacities for load peaks, or through monitoring unused services or anomalies in consumption identified.
- Alignment of IT resources with their cost can determine the profitability and allocation of cost per department or user. When estimating costs and planning budgets for cloud services, it is essential to understand how individual cloud providers measure the use of their resources and which criteria are used for billing – this ranges from hourly billing for the use of individual instances to costs based on data volume and outgoing data traffic in gigabytes per month, with different commitments. This means that companies should study in detail which cloud capacities, in which qualities, and over which periods of time, the various phases of cloud migration, must be planned.
- Of the many possible expensive changes for cloud migrations, two should be particularly highlighted, which can be avoided in advance by careful examination. The first one is the popular “lift & shift” approach, in which applications and data are transferred to the cloud quickly, without any adjustments. A cheap way that can lead to an unexpected cost explosion, such as the costs of the public cloud infrastructure & architecture adjustments for the cloud, followed by the considerable project planning effort. Another cost factor can arise from old systems or legacy systems, which for technical reasons cannot simply be migrated, but which must be kept with their data – mostly for legal reasons. The result: On-premises resources cannot be switched off to the planned extent and continue to burden IT budgets.
Understanding the difference between several types of cloud computing and identifying which one is the right fit for a growing business is tremendously important. The implementation of cloud strategies is associated with a complex interplay between consumption and costs, which is characterized by various technical and economic variables that change dynamically. Therefore, the IT and financial teams must work together to monitor all processes and systems that should be implemented at the same time as cloud migration. Some companies may not be used to this at first, but it helps sustainably to realize the optimal economic added value from cloud initiatives.
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