A Gartner report that examines how the Cloud will be at the center of new digital experiences says that cloud-native platforms that hosted 30% of digital workloads in 2021 will hold as much as 95% by 2025. When the initial phase of migrating to the Cloud was taking place, the cost was not a factor that was taken into consideration. Over the years, however, a larger number of IT leaders are examining the cost-to-benefit ratios and continue to emphasize the importance of migration, but cost-effectively.
However, effort and planning are needed to ensure that migration happens within fixed budgets. Even the smallest of mistakes or a detail missed can result in companies overshooting their budgets. Minor mistakes can snowball to become loss-incurring debacles. There are several ways to avoid Cloud migration overspend. We take a look at what causes overspending and how one can control it.
10 Aspects That Can Cause Budget Inflations During Cloud Migration
A Skilled Partner
Partnering with a skilled vendor is possibly the most logical approach to an important task. However, numerous companies make the mistake of cutting corners when choosing a Cloud migration partner. Often contracts are awarded based on existing vendor list or lower costs. Another mistake companies make is handing over the task to their internal IT team. This team is often not qualified or equipped to do a good job.
Make sure to take the time out to find the right partner, who has the skill, experience, and resources to handle the job. It is a simple tip to ensure you stay within your budget.
Detailed Application Assessments
Every application in your ecosystem has varied requirements and will go through the process of migration differently. How it reacts in a new environment is dependent on assessments that have been conducted to ensure a smooth transition. If done in a hurry, an application may not take to a new environment, and correcting this can lead to further expenses. Assessment of an application involves teams examining various options, understanding the many dependencies, the time and the approach needed, and the cost of migration. Failure to do such detailed assessments can cost a company a great deal financially. Your migration partner should be able to provide you with estimates and be able to assess technical dependencies.
A High Quality Landing Zone Design
The destination Cloud is known as the landing zone. Your landing zone must have a strong architecture that includes features like virtual private cloud networking (VPC), security and compliance protocols, a strong monitoring infrastructure, role-specific access control, and the ability to scale up or down as required. Not looking into landing zone capabilities and design can spell danger for a migration process right from the beginning. Handling the fallout can lead to spending much more than anticipated.
For any business, the longer the Cloud migration process takes, the more expensive it gets. Among the many reasons for a delay is not understanding the interdependencies that exist between applications. Not knowing this leads to the wrong applications being grouped and a failure of anticipating any roadblocks during migration. It can also lead to network performance issues. Such delays slow down the process and a business loses out on both time and money.
Budget for Indirect Costs
When planning for migration, direct costs are often easy to include in the budgeting process. The indirect costs, such as re-skilling or up-skilling existing staff, rejigging the organizational hierarchy, budgeting the salaries of new hires specifically for the Cloud, accounting for any operational procedures, and the costs of enterprise-level DevOps practices are often not added to the budget or are under-estimated. Some expenses are related to software licenses, hardware, facilities that will be outdated after migration, and productivity losses that occur when migration takes place. Since these indirect costs are situational, it can be hard to allot an exact budget. However, not accounting for them at all can cause serious financial crunches.
Assess and Find the Right Cloud Size
A common mistake is not assessing the size of Cloud a business will need. This leads to two kinds of problems – the first is over-provisioning, where a Cloud is larger than what a business needs and the other, under-provisioning, where it is smaller.
Over-provisioning results in a waste of resources, and companies will end up paying for something they are not using, and possibly never will. Under-provisioning is when there is a lack of foresight on the requirements of a business. An immediate fall-out of a smaller size Cloud is that users will be faced with latency issues. To address this, a company will invest in additional Cloud space, which immediately increases expenses. Businesses have to thoroughly evaluate their requirements to ensure they do not face either situation. Pay-as-you-use is a smart way to avoid unnecessary expenditure if you are unsure of the size of Cloud you need.
Refrain from Moving Unwanted Applications
The Cloud is an exciting space for an organization with the many benefits it offers. However, companies often make the mistake of transferring everything they have to move, in one go. This often means that redundant information and unnecessary applications also make the move and take up space that could be better utilized. This is often the case with legacy applications, which are not good candidates for migration to the Cloud. Businesses need to be aware of resource consumption and not pay to have unnecessary data uploaded and stored.
Assess the Benefits of the Lift and Shift Approach
The lift and shift migration approach is a common one and refers to moving an application and all its associated data with little to no changes, into the Cloud. It means that applications are “lifted” from their current environment and “shifted” the way they are into a new host premise. This is an economical and easy approach to moving applications to the Cloud. Dow Jones was able to bring its IT costs down by 25% and GE Oil & Gas enjoyed a 52% cost savings. But lift and shift comes with some drawbacks.
The first is that if these are non-Cloud-native applications it will result in additional expenses if they are to be re-hosted in the future. Secondly, some applications are too complex to fit into the easy format of lift and shift. If done, it can result in low performance, non-compatibility with the software infrastructure, bugs that may go undetected, and monitoring and security problems.
Before migration, a detailed analysis of applications must be conducted to see what modifications may be needed to make them fit into the Cloud environment seamlessly. This prevents unnecessary costs in the future. There may be some investment needed to rewrite applications for compatibility and this will work to a company’s benefit. Not looking at updating critical applications to ensure suitability for the Cloud can lead to unnecessary operational costs after a while.
Examining all Security Requirements
Security is an important aspect to examine to prevent migration costs from going up. Palo Alto’s Unit 42 Cloud Threat Report 1H 2021 says that one in three companies do not have proper Cloud security measures. When an organization works on moving its applications, all its data and related processes, and the environments they function in, to the Cloud, it has to be supported by strong security protocols at every stage. Vulnerabilities have to be identified before, during, and after migration to ensure security measures are adequate. Anticipating breaches and preventing them can save huge amounts on a budget. It makes financial sense to do the research and bolster your security systems before beginning the process of migration than being caught on the back foot.
Access control is a key aspect of managing security. Data from IDC and Ermetic says that 83% of security breaches are because of access-related vulnerabilities. Limiting access to only those concerned keeps data and applications safer during the migration process and prevents losses, as these two aspects are the most vulnerable during migration. When putting in security measures, ensure that it all follows standard governance and compliance regulations. Failing to do this can leave your organization open to legal entanglements, heavy fines, and unnecessary financial pressure.
Multi-Cloud Over Vendor Lock-in
Vendor lock-ins can be quite a nuisance for companies looking to migrate to the Cloud. Even with the best of prior research, should you find out that your vendor does not have the right capabilities to handle your migration project, a lock-in prevents you from changing vendors. This leads to a drain of your resources and a burden on your budget to rectify problems that your current vendor may cause in the migration process.
Today, several organizations opt for multiple vendors and build their Cloud environment with the best options that multiple vendors can provide them. A Flexera Report of 2021 says that nine out of 10 enterprises use this approach. This prevents the drawbacks of lock-in and gives a business enough maneuvering space to opt for another vendor where needed, without straining resources. It also limits the financial risks that can arise from working with one service provider. In Gartner’s 4 Trends Impacting Cloud Adoption in 2020, it says that two in three organization will use the multi-vendor system.
Tips for Reducing Cloud Migration Cost
Looking into the above 10 aspects can help an organization stay well within their allotted budgets for migration. To further help a business assess migration costs, here are three questions to ask of your data resources and their quality.
Question 1: Are My Business Resources Ideally Organized for Maximum Visibility?
The quality of data being fed into your Cloud will determine the strength of the insights and analysis it provides you. Cloud platforms will begin delivering such analyses in real-time once the migration is done and processes are aligned. The most important aspect of getting the right insights is to ensure that you know your data resources well. Accurate tagging and meta-data become important here.
Developing a taxonomy governance system is one way to handle this. Labeling your data resources to make them easily visible is crucial. Following a strong naming system across all data sets the foundation for a robust data governance strategy that can be applied to all Cloud computing resources. Ensure consistent tags in your governance system and that the same is followed across all departments and teams in the organization. Once implemented, you will gain complete visibility over all resources and automation becomes simpler.
Question 2: Am I Right-Sizing or Over-Provisioning?
One of the biggest problems with migration is over-provisioning. Ensuring the right size will help bring down costs and manage them better. Remember that when you break down your Cloud resources, you are paying for every aspect – from the CPU to storage to RAM usage, virtual machinery, and more. Individually, these are considered small costs but taken collectively and every month, they can add up significantly. These expenses can also fluctuate, making budgeting difficult.
Addressing this is best done by right sizing to match your workloads to the right amount of Cloud space needed.
According to Amazon’s Right Sizing – Provisioning Instances to Match Work Loads, to succeed at cost optimization, right-sizing will have to be an ongoing process. Right-sizing becomes important when you are first moving to the Cloud. However, once done, it is important to periodically evaluate if you can ensure cost-performance optimization.
This is important because the requirements for both performance and capacity are constantly changing over time and this can result in resources being under or not utilized at all. With newer projects and workloads constantly being added, the allotment of resources also changes.
Right-sizing of workloads has to be done monthly to ensure cost control. The process can be smoothened out in a few ways:
- Have a dedicated team work on a right-sizing schedule and report to the management on the cost-to-performance results.
- Constantly monitor costs with dedicated monitoring and reporting tools.
- Ensure tagging of data with easily identifiable attributes to indicate ownership, environment, and others.
Question 3: Are You Storing Junk?
Your storage requirements will increase as your business grows. However, not all of this storage space is going to be filled with useful information. Back-ups are essential to have, but unless duplicate information is replaced, you are going to be storing a lot of redundant information. Here is how you can ensure you are not storing junk and adding to your costs.
Automate the Deletion of Unused Resources: The right tagging system can help you keep track of all your resources and this helps further in automating clean-up processes. These can be triggered to delete back-ups for certain data, remove resources that have not been used for a specified time frame, etc. You can also assess your static data and resources that are often kept on hand for compliance issues but will not be accessed regularly. Storage for this can be what is called cold storage, another solution to try.
Having a System of Cold Storage: Cold storage is an operational mode for inactive data of an organization, along with a storage system. Static data, legal information, and copies of these can be placed in long-term cold storage. There are some drawbacks to such storage. The primary being that it involves a longer process to access this data and can incur additional fees if accessed too often. But, cold storage helps with budgeting and making things more affordable.
Creating storage goals, evaluating and cleaning up data, and making the right choice of vendors and software can help ensure budgets are not over-run significantly. Planning migration with a strong focus on the appropriate Cloud solution makes for an efficient transition and ensures an ideal return on investment.