Uncovering the hidden costs of cloud migration

The benefits of the cloud are in danger of being outweighed by an assortment of hidden costs

A dollar sign attached to balloons floats against a sky with clouds

By now, business benefits of cloud migration are clear to most IT professionals - efficiency, agility, scalability, and increased security are all reasons for businesses migrating to the cloud in droves.

And this momentum shows no signs of slowing down, thanks to the disruption of the pandemic.

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“Without public cloud apps, development services, tools, and infrastructure...imaging how different (and hobbled) the pandemic response would have been,” says Dave Bartoletti, Vice President and Principal Analyst at Forrester Research.

If anything, the needs of remote workers have spurred cloud adoption, with the global cloud infrastructure market expected to grow by 25% to $120 billion in 2021 as businesses look to speed recovery and enable their workforces.

While the cloud offers a plethora of benefits and can enable businesses to get back on their feet after the pandemic, not all businesses need to use the cloud to the same degree. Without careful consideration and analysis, some may even end up with costs that outweigh the benefits.

In this case, cost refers to much more than the cost of acquiring technology. In business terms, you can calculate cost by determining your ROI, but by definition, this makes it impossible to figure out the actual cost before you’ve made the initial investment. 

Therefore, businesses could easily find themselves committed to a cloud solution before realising they’ve been saddled with a higher cost than their needs require. So it’s essential to try and uncover as many costs as possible before making the migration journey.

Unexpected costs of migrating to the cloud

Cloud migration is never a simple process. Pitfalls can wait either in plain sight - such as upfront monetary costs, often large but easily legislated for - or in the shadows. It’s these hidden costs that are the real debilitator. Without thorough planning or technical understanding, enterprises may find themselves far over budget and in too deep to escape.

Hidden costs often appear in the form of operational and recurring expenditure, such as the pay-as-you-go cloud model offered by vendors. Without the required level of expertise within the enterprise, pay-as-you-go models may be misunderstood.

Enterprises can pay for vast amounts of cloud storage to house swathes of data. With no storage limit, data will continue to be stored on the cloud servers, bringing an incremental cost. What’s more, it’s likely that most of this data doesn’t need to be stored in the cloud. On-premise servers still have a role to play, while many enterprises are guilty of blanket decisions when it comes to data, rather than taking the time to sift through what’s relevant and important to maintain.

To shine a light on this blind spot, enterprises must ensure their in-house IT departments are brimming with relevant expertise. Existing employees can be upskilled to plug skills-gaps, but sooner or later there will be a problem or a technology that stretches the department to breaking point.

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Acquiring external talent at some point down the road is unavoidable, in the form of consultants, new hires, and vendor support. Due to the unpredictability of cloud migrations, both in terms of surfacing issues and in the introduction of emerging technologies, having the foresight to realise which specific skills are going to be required down the line is not always apparent, adding to this expense.

This unpredictability stems from the fact that organisations will want to tailor their cloud technology to integrate seamlessly with their existing set of systems. As the web of infrastructure expands, it becomes more difficult to maintain optimum performance levels because of the complexity that customisation brings. As deployments are scaled, their problems and complexities are also magnified, forcing the enterprise to invest in additional resources.

How to calculate whether you can afford cloud migration

Though the specific amount of hidden costs remain a mystery until they are encountered, that doesn’t mean that when devising a cloud migration budget, they shouldn’t be accounted for. Budgets should have buffering capacity and be scalable, just like the cloud technology it will be invested in.

It's certain that the cloud migration journey is by nature unpredictable, yet there is one consistent element that can be counted on: change. The enterprise and cloud migrations are both dynamic. Performance requirements, changes in usage and market needs, vendor support packages, will all be affected at one point or another.

This acts as one of the major advantages and disadvantages of the cloud. On the other hand, on-premise infrastructures also suffer from these faults.

Enterprises can start their cloud journeys by taking an audit of current IT infrastructure costs in order to reveal what they are currently paying. Then try and estimate the potential cloud infrastructure costs. For this there must be an understanding of the network, storage, and database capacity required to run applications selected to operate on the cloud, Typically cloud pricing structures are quite complex, however, vendors are increasingly simplifying their offerings.

Weighing the pros and cons of cloud migration

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With the costs of cloud migration identified, it’s up to the individual enterprise only to decide whether the journey is worthwhile. Budgets, industries, and priorities vary, but what is certain is that at least partial migrations to the cloud will bring a host of benefits that ultimately do make businesses more competitive.

For those struggling to finance migrations, it may be time to look for more cost-effective methods. Cloud migrations do not need to happen en masse. Internal inspections can dictate which applications will benefit the most from integrating with the cloud. If the value isn’t foreseen in transferring a certain application, then don’t.

Of course, risk is a factor in every decision, particularly one with high financial implications. Enterprises can complete a thorough risk analysis by uncovering the hidden costs of their planned cloud migration and comparing them to existing costs and their risk appetite. Risks can’t be eradicated but they can be accounted for.

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