How to Tackle Hidden
Cloud Migration Costs

Azure, AWS, and Google Cloud have calculators to help estimate the future cost of services following migrations, however, there is more to consider. Here are a few things to incorporate into your program budget when transitioning to the cloud or even another data center.

Forrester’s report, “Cloud Migration: Critical Drivers For Success” calls out the resource planning required for migration efforts.

“While many businesses associate the cloud with cost savings, underestimating the resources involved in cloud migration can quickly cause costs to spiral out of control.”

While technical teams may have built resources in the cloud, most have not migrated sizable IT environments to the cloud. This requires considerable preparation, training, and experience. Existing technical infrastructure resources may need to be supplemented or trained on migration procedures in preparation for a cloud migration program. Involvement of senior technical resources in the organization is crucial to the program, however, without prior migration experience or cloud expertise, planning and seamless execution of migrations will be challenging. In addition, managing their existing workload along with migration efforts will be difficult. Incorporate training into your planning and budget process, and bring in migration experts that partner with your existing resources.

Application teams may require vendors to support the changes associated with migrating applications to the cloud. Re-hosting an application will likely require documentation updates and testing. Re-platforming, refactoring, or re-architecting applications to take advantage of cloud-native capabilities will require considerably more involvement from application SMEs. It is increasingly more expensive when highly regulated environments that require additional rigor factor into your program scope. Include adequate time and budget in your migration program for these vital resources and activities. If possible, make use of an estimation model based on the intricacy of your applications in scope, required changes, documentation, and involvement of resources to develop a holistic budget.

As you transition applications, databases, unstructured data, and virtual machines to the cloud, the source hardware, software, licenses, and data center facilities should be decommissioned and wiped with approved data erasure technology.

Plan to review the terms of your hardware contracts to determine if any hardware must be returned to vendors or if it can be bought outright if payments are still being made. As part of the program, review all the hardware in use to support the environment moving to the cloud including physical servers, storage arrays, network switches, firewalls, and backup solutions. If all the virtual machines on a physical server will not be migrating, consider relocating virtual machines to different physical servers to consolidate your footprint. If the contractual terms of some hardware are more favorable, it may be financially beneficial to rearrange your environments to help increase your savings. Do not forget to work with your finance department to ensure asset changes are documented.

Continually re-evaluate your inventory and take the opportunity to look for some quick savings. AWS confirms in their “AWS Migration Whitepaper” that

“As much as 10%-20% of an enterprise IT portfolio is no longer useful and can be turned off.”

Shutting down systems no longer in use can help offset cloud migration program expenses. Ensure appropriate archives and backups are completed as necessary prior to decommissioning. As you retire hardware, calculate costs and schedule vendors to certify data destruction. In addition, prepare to work with data center remote hands to map, tag, unrack and unplug cables and hardware. Include shipping rates to return hardware to vendors or asset disposal fees. Generally, these fees are fairly insignificant compared to the overall program, however, they can add up and should be included in the financial planning.

Finally, consider data center facility changes as systems are migrated and shut down. Can you reduce your footprint, cooling, or power requirements or shutter a data center facility or colocation as a result of migrations to the cloud? Again, carefully review the terms of your agreements or negotiate changes as part of your transition plans. Including these considerations will ensure your ongoing expenses do not surge as a result of the migrations.

How will your support structure change as your environments move? Will support tickets need to be routed to a new team for support? Will your agreement with a support provider change? What about environment updates, changes, or new requests following the migration to the cloud? Will your technical resources need training, or will you outsource your support and enhancement requests?

In Flexera’s, “2024 State of the Cloud Report,” a top challenge was the lack of resources with expertise. Allocate time and funding for training and certification for your support staff. Develop cloud competencies across your organization based on roles and bring in supplemental support resources as needed.

Depending on your organization’s make-up and toolset, you may need to include development costs for enterprise support tool changes. Service Desk ticketing system modifications including new request forms, the addition of cloud services to the service catalog, ticket routing, escalations, and approval changes need to be built-in. Updates and training for changes to the support process will likely be necessary. Review the upcoming changes with your operations team or support provider and negotiate any revisions to agreements.

According to IDG’s “2020 Cloud Computing Study”,

“The biggest challenges that ITDMs (IT Technology Decision Makers) face when it comes to the ability to take full advantage of their public cloud resources are controlling cloud costs and data privacy/security challenges.”

Recurring cloud expenses can skyrocket if not properly tracked. Implement a tagging policy and document ownership for billing and asset tracking as migrations and new builds grow in the cloud. Create budgets and alerts in Azure, AWS, and GCP to prevent financial overrun and to maintain visibility. Leverage cloud advisor services to verify whether environments are right-sized and utilize reservation savings and auto-scaling where possible.

Implement a Cloud Center of Excellence (CCoE) structure to define the operating standards for your cloud environment. This governance and oversight will promote necessary organization standards, security, compliance, and cost controls.

Cloud migrations require careful planning and leadership familiar with the process. Comprehensive budgets should include program management and technical leadership resources to drive the program. Consider the communication, coordination requirements, and the organization’s openness to embrace the migration program.

Depending on the size of the relocation effort, implement a change management strategy that includes appropriate communication to all stakeholders and program participants. Many projects fail to adequately market the wins and the effort that goes into programs of this complexity and size. Migration programs will be more successful if the organization understands and believes in the effort.

Application dependency mapping, application migration approaches, migration activity sequencing, and coordination require cross-functional skills and migration expertise that most organizations do not have internally. In addition, in-house resources have many other responsibilities that limit their ability to focus on these efforts. Partner with a third-party organization that specializes in migration services at the onset of your program to address these key areas.

Forrester’s report on the “State of Public Cloud Migrations, 2020” recommends leveraging migration specialists.

“Work with a migration strategy partner to do a full IT infrastructure assessment and pick the right migration starting place. Identifying workloads that benefit most from public cloud’s efficiency, automation, and elasticity will bring early success and organization buy-in for future migration.”

Migration Specialists bring vital experience to help your organization navigate through the transformational effort. They will also ensure important activities are executed properly and keep up the momentum of the program. Although there is an outlay to bring in migration specialists, their expertise will ensure the program completes successfully.

Cloud migrations are complex and CTM Technology Group has the technical proficiency to guide you through the process. Leveraging our cloud migration cost estimation model, we can lead you through the process of preparing a comprehensive budget and drive your program to successful completion. Our expertise in the migration process, as well as asset decommissioning, will provide insight to minimize unplanned expenditures that lead to financial overruns. See our Cloud Migration Services for details on our practice.

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