When you consider the costs of doing business, you might only see dollar signs―not uncommon. But if your organization is planning a cloud migration, it’s important to understand all costs involved, both hard and soft. Sure, calculating the hard costs of a cloud migration is critically important―new or additional hardware and software, maintenance agreements, additional materials, etc.―but failing to consider and calculate soft costs could mean pointed questions from C-level executives will embarrassingly go answered. And not knowing both types of costs could result in IT projects and initiatives being delayed or cancelled—there’s certainly a cost from that.
When you’re analyzing the many critical cloud migration components―developing risk assessments, analyzing the effects on business units, applications and interoperability―utilize the following information to help you uncover all associated costs.
First, you’ll need a Benchmark
It’s important to first understand all costs associated with your current IT infrastructure. If you haven’t calculated that cost, you won’t have a benchmark against which you can evaluate and compare the cost of a cloud migration. Calculating direct costs, such as software and hardware, is relatively easy, but ensure that you’re including additional expenses, as well, such as maintenance agreements, licensing, warranties, even spare parts, if utilized. And don’t forget to include the cost of power, A/C and bandwidth. If you need to confirm cost calculations, talk with accounts payable―they’ll know.
Hard Costs of a Cloud Migration (before, during and after)
Determining the hard costs related to cloud migrations includes any new or additional hardware required. That’s the easy part―calculating the monthly costs from cloud service providers is another issue. It has gotten easier, especially for Amazon Web Services (AWS) customers. AWS offers an online tool that calculate the Total Cost of Ownership (TCO) and Monthly Costs. But it’s still no picnic. Unless you have the cloud-related skillsets on staff, getting an accurate assessment of monthly costs might require you incur another, but worthwhile, hard cost―hiring a consultant who understands and can conduct a risk assessment prior to migration.
Cloud service providers charge customers a fee to transfer data from existing systems. And there might be additional costs in the event personnel is needed to ensure customers’ on-prem data is properly synced with data that has already been transferred. Ensuring this data integrity is important, but not easy, especially for an IT staff that is not experienced with prior cloud migrations.
Other than the monthly costs you’ll incur from your cloud provider of choice, such as AWS or Azure, consideration must be given to the ongoing maintenance costs of your new cloud environment. And while many of these are soft costs, there can be hard costs associated with them, as well, such as the ongoing testing of applications in the cloud.
The Hard-to-Calculate Soft Costs
If they’re not overlooked altogether, soft costs are seldom top-of-mind. Determining the value of your staff’s time isn’t hard to calculate (project hours multiplied by their hourly rate, which is calculated by dividing weekly pay by 40 (hours)), but locking down the amount of time a cloud migration has consumed isn’t easy. Now try calculating one that hasn’t taken place yet. There might be a cost in employee morale, as well, in the event the cloud migration doesn’t succeed or deliver as planned.
Consider the amount of time required to properly train staff and keep them cloud-educated into perpetuity―today’s cloud will look a lot different than future generations.
The testing and integrating of applications to be migrated takes considerable time, as well, and several factors must be considered, such as security, performance and scalability. Testing should also include potential risks that might result in downtime, and ensuring interoperability between servers, databases and the network.
Also, there’s a far greater than 0% chance your cloud migration won’t go exactly as planned, which will require additional man hours for proper remediation.
There are also soft costs associated with projects that are put on hold, especially if they delay revenue generation.
If questions exist, call on the experts
Here’s the great news―moving to the cloud, provided the migration is done carefully and comprehensively, will save considerable hard and soft costs now and in the future. Calculating the costs of a cloud migration is important, but not an easy or expeditious venture.
If you have questions about how to accurately predict the costs of a future cloud migration, contact GDT’s Cloud Experts at AWSTeam@gdt.com. They’d love to hear from you.