The cost of an on-premise to cloud migration

Cloud migration costs can vary greatly depending on the conditions of your current infrastructure, the ease of integrating your workloads and applications with the cloud, the extent to which your functions are already virtualized and the level of support you require throughout the migration process.

For instance, if your current infrastructure is highly customized and entirely dependent on your on-premise system, replicating that infrastructure in the cloud will take more time and resources. 

To get a clearer perspective on the costs associated with your cloud migration, follow these important steps:

Perform a 360-degree assessment of your on-premise system

You can learn a great deal about your future in the cloud from your existing on-premise operations. Beyond determining cost, you’ll be able to create a blueprint for your cloud infrastructure, identify wasteful resources you can cut and discover necessary updates and replacements. Perform the following assessment: 

• What does your on-premise system actually cost? Factor in everything involved in running your current system: tangible, documented purchases like hardware; ongoing expenses like staff, contracts, operations and the physical environment; and indirect expenses that occur as a result of running the system.
• What does the infrastructure entail? Build your blueprint for your cloud infrastructure by mapping out details like the number of servers you have and the amount of storage you employ.
• Which components do you want in the cloud? There might be workloads and applications that you do and don’t want in the cloud at this time.
• Which components can be reduced or eliminated? You’ll likely find redundant or underutilized applications that you can either eliminate or downsize when you migrate.
• Which components have cloud compatibility challenges? You might find components and applications that require modifications, upgrades or replacements in order to operate in the cloud.
• How will you organize the phases of your migration? Determine which components to migrate first and which to schedule for later.

Design your unique cloud infrastructure

Once you have a full picture of your current system, you’ll be able to select the resources and services you need to migrate to and operate in the cloud. These services and the level of functionality you require for each of them will greatly influence cost. Microsoft has a convenient calculator function for piecing together the components you need in order to determine potential cost for an on-premise to Azure cloud migration.

Calculate Your Cloud Migration Cost 

For further insights into building the best cloud infrastructure for your business, check out the Microsoft Azure Cloud Migration Essentials E-Book

Plan for your on-premise to cloud migration 

Key cost drivers for the on-premise to Azure cloud migration process are:

• Data Transfer: Migrating data to the cloud is an involved process. It takes time and resources to make sure that your operations continue to run smoothly throughout, your data transfers safely and securely, nothing drops off during the transfer, and the infrastructure is complete.
• Integration: Next, you must integrate your workloads into the new cloud infrastructure. Though many newer apps and cloud-ready workloads you currently have will be in good shape to deploy, you may need to modify, upgrade or even completely replace certain apps before they can function properly in the cloud.
• App Testing: Before you switch to depending on your cloud services, it is vital that you test the functions of your applications in the new infrastructure. You’ll want to address any issues that will keep your cloud operations from running smoothly once launched.
• Consultant Fees: For something as significant and intricate as a cloud migration, it’s usually best to hire a third-party consultant. Consultants can ensure that you deploy the services that will work best for you, and that your operations remain secure from start to finish and into the future.
• Time: Migrating, testing and securing the infrastructure all involve labor, and any extended needs in these areas will proportionally affect cost. According to Forrester brief, “Cost of Migrating an Enterprise Application to a Public Cloud Platform,” labor actually comes out to be the largest cost factor in cloud migration at 50 percent.

Plan for post-migration costs

Once you’re operating in the cloud, there are several post-migration cost drivers to consider, both direct and indirect. First, there is the cost of your cloud services in general. Then, there will be labor and training costs for maintaining and working with the infrastructure, further integration activities for apps and workloads, any necessary security for protecting your data and meeting compliance, and more.

Cloud migration cost savings and benefits

The benefits of moving to a cloud-based infrastructure go beyond cost savings, but the return can be substantial. In fact, the Forrester Total Economic Impact Of Microsoft Dynamics 365 For Finance and Operations, September 2018, indicates an ROI of 60 percent. Migrating to the cloud:

• Reduces legacy costs. When you operate in the cloud, you aren’t tied to hardware and/or software that will need maintenance, upgrades and additions in order to grow with and support your business. According to the Forrester report, you can save $10.6 million on such legacy costs. 
• Creates an environment of adaptability. The cloud is more adaptable and gives you greater opportunity to change with the market as it changes, whether that’s expanding or downsizing functions of your business, introducing new products or reallocating resources.
• Enhances overall efficiency. Functions like automation and forecasting will help you to improve the efficiency of your business overall. According to the report, those surveyed indicated operation efficiency savings of $39 million.  
• Increases wholesale profits. An enhanced user experience and the insights you can use to improve processes across major functions of your business can lead to dramatic profit increases. The report showed a wholesale profit increase of $3.3 million. 
• Greatly improves security. Microsoft’s cloud services are monitored and protected with the most advanced technologies and tools available. 

With the complex nature of the migration process and the variance in costs, it’s worth consulting with a third party like Columbus Global, a trusted Microsoft partner. We provide a high level of support to help you transition so that you get the right services for your operations and experience all of the benefits of migrating without unnecessary risks or expenditures.

For more details on smooth and low-risk cloud migration, understand the step-by-step process.