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Controlling Cloud Migration Costs: Best Practices

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For many companies, COVID-19 means the majority of their workforce is now remote. Because of this, cloud migration is more important than ever, and cost management is a close second. More and more businesses are transitioning their applications to the cloud, but, unfortunately, cloud migration is not a cheap process and can eat into a big chunk of your budget.

451 Research notes that a little over 50% of companies that recently migrated to the cloud point to cost as their biggest pain point. Applications that are built for on-premises servers will act differently when migrated to the cloud. Because of this, you need to spend time upfront restructuring those applications for running on the cloud.

It can be difficult to understand and estimate the costs associated with cloud migration, especially when it comes to indirect costs. However, there is a way to fully enjoy the advantages of your infrastructure moving to the cloud and stay within your budget. In this article, we’ll examine some best practices for controlling cloud migration costs and look at:

  • Cloud migration expenses
  • Controlling cloud migration costs
  • Cost control tools

Cloud Migration Costs

It’s clear that implementing a cloud strategy is the right choice in most cases, but how much cloud spending do you need to prepare for? Labor costs are going to account for most of the upfront project costs because you’ll need to ensure that all of your applications and files are formatted correctly, so they won’t break when migrated. Your IT department or managed service provider can help you with this.

You can take several approaches to migrating applications to the cloud. Refactoring applications is the best option long-term, but it can also be the most expensive. Because applications are built differently depending on whether they’ll be housed in the cloud or on-premises servers, they need to be reformatted in order to migrate to the cloud and retain the same functionality.

If you’re currently using server-based software, you may be able to purchase a cloud version more easily than paying to refactor your existing license.

A “lift-and-shift” approach moves over applications exactly as they are. This is usually a short-term fix, since most applications will need to be refactored eventually. With the lift-and-shift approach, your applications may still work but lose some functionality, or they may break altogether.

You’ll also need to determine what levels of bandwidth, server capacity and compute power you need for your infrastructure and make sure you’re getting the right amount of space.

As for ongoing costs, you might want to include a managed service provider (MSP). While you could hire someone in-house, a cloud engineer is probably going to be much more expensive than just hiring an MSP to handle the ongoing operations for you.

Another recurring cost you’re going to run into is the subscription for the cloud provider you choose. It’s a good idea to shop around to determine which provider is going to best meet your business needs, rather than just looking for the one offering the lowest prices. You might miss out on someone who could save you money in other areas. For example, bandwidth needs are one area where costs can unexpectedly balloon, so the subscription price is just a starting point. 

The major cloud services providers are Amazon Web Services (AWS), Google, Azure (Microsoft), IBM, and Alibaba, but there are many smaller firms out there. AWS might have advantages your company needs that Azure doesn't offer, or vice-versa.

Controlling Cloud Migration Costs

Choose the right size for your cloud infrastructure from the beginning

Look for the smallest infrastructure size that can reasonably accommodate everything you need it to do. You don’t want to be paying for a ton of space that you’re not using, and it’s much easier to add more space later in the cloud than it is with a physical network.

Hire a Migration Specialist

Cloud engineers and migration specialists can help you plan your cloud migration and cut out some of those upfront costs. This is an especially good option if you have a sizable internal IT team and just need some help with the initial move. If you need more ongoing help, service providers that specialize in cloud migrations can help you cut down on the time it takes to reformat applications and get them transferred into the cloud. They can also help you continue to cut costs once everything is migrated.

Use reserved instances for stable and predictable workloads

Instances, or “virtual servers” accrue costs while they’re running or storing data. You’ll be charged an hourly rate based on a variety of factors, including size and power level of the hardware and software you’re using, the times you’re actively working, and what region you’re in. These charges are your “on-demand” rate. However, if you commit to using (or reserving) a server for a longer period of time, usually one year, you can get a much better deal on that hourly rate. These reserved instances can save you a lot of money over the life of your cloud environment.

Plan for the migration holistically

According to Joe Kinsella, the CTO and Founder of CloudHealth Technologies, “We believe...cloud migration is a difficult, confusing process that must be approached in a holistic fashion.” If you plan to migrate your system to the cloud in parts, you may run into systems or applications that were working well together and suddenly aren’t. That’s because they were located on the same server and could communicate easily, but now one application is in the cloud and one is hosted on your on-premises server. Because of this disconnect, work is now much more inefficient, and both your cloud and on-premises servers could be working harder to make up for the disconnect and driving up costs. By creating a holistic migration plan, you can determine which applications work together, so you can keep them on the same servers or create APIs to connect them and keep your business running efficiently.

Cost Control Tools

You can also implement cost optimization tools to help automate some of the aforementioned best practices. Companies like CloudCheckr or CloudHealth monitor, analyze, and report on all of the cloud resources your organization is using to help you save money and prevent overspending. 

CloudCheckr starts at $499/month and allows users to quickly view and optimize their spend on Google Cloud, Azure, and AWS, as well as improve security. CloudCheckr offers SLA Management, demand monitoring, and performance analytics, so you know exactly where your cloud resources are being used.

CloudHealth’s pricing is not readily available, but their service provides users access to a healthy selection of data analytics to help optimize and automate their cloud environment. CloudHealth offers multi-cloud management, so all of your cloud infrastructures are easily accessible, and workflow approval to help streamline your migration.

These technologies won’t provide the human element Managed Service Providers bring to the table, but they can work in tandem to make sure you’re achieving the greatest level of cost savings possible.

Full Cloud Adoption May Happen Sooner Than Planned

Although pricing can play a large role in your cloud migration, it shouldn’t be the only factor you consider. Along with costs, you’ll also need to examine which cloud network providers offer the security, performance, and support that your company will need. This will differ based on the type of cloud migration you’re undertaking, e.g. migrating custom apps vs commercial apps or data vs software migrations.

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