And this is exactly what we are going to look into in this article.
So, let’s cover the basics first.  

Cloud computing: definition and the basics

What is cloud computing?

It is a modern alternative to using on-site hardware solutions, one that also provides you with shorter response times and better scaling options (both up and down). It is a modern alternative to using on-premise hardware, making it possible for you to access files and software applications anywhere, anytime – as long as you have an active Internet connection. Cloud costs are usually lower than the costs of on-site solutions, and also more flexible, easier to manage and more secure. But the benefits go way beyond that.

What are the benefits of cloud migration?

• Increased agility and flexibility
  
• Improved performance
  
• Operational resilience
  
• Better scalability and faster innovation
  
• More efficient consumption management
  
• Improved ability to meet customer expectations
  
• Cost savings (TCO)
  
• Simplified IT operations

Of course, in order to achieve all of these benefits, your cloud migration has to be wisely planned and implemented. Nothing is set in stone and no one can promise you that the migration itself – no matter how it’s done – will meet all of these goals perfectly, especially when you put emphasis on cost reduction.

The reality of Cloud Migration costs

What should you take into consideration in order to prepare a realistic cloud migration cost estimate?

First and foremost, you need to assess what can be moved to the cloud and what cannot (because it’s either impossible or unprofitable). A very common mistake is assuming that the digital transformation requires every single file to be migrated to the cloud, otherwise you’re not being innovative enough. Well, that’s not the point.

A thorough assessment and detailed profit-and-loss projections are key to smart optimisation.

Plus, you should define the best time to begin migrating your data and determine if you’ll need any help from an external IT partner or if you can do it all using just your in-house resources.

Once you have finished this part, you can create a calculation sheet including all of the other, smaller costs that are strongly associated with your migration.

Data migration costs – expenses to consider 

• Cloud provider
  The cost of the cloud provider is quite easy to estimate, based on the chosen pricing model and the amount of space and service usage. The difficulty lies in selecting the right provider. Bet on the expertise of a cloud expert for a smooth migration.
  
  
• Transfer preparation
  You will definitely need to plan out the entire process and spend some time creating a proper strategy. And you may also end up having to rewrite your app or rework a service! This generates costs and has to be taken into account.
  
  
• Manpower and infrastructure
  You may want to consider hiring a cloud architect or additional CloudOps & DevOps (one or a few, depending on the complexity of the project), so that they can design and then create adequate infrastructure for your migration.
  
  
• Migration
  The key points here are finding the best time for the cloud migration and deciding on the necessary services and infrastructure.

This all sounds like a lot, but remember that once you’ve successfully migrated your data, you won’t need your previous data centre any more, so your total costs will drop down.

Plus, there are a few highly recommended tips and tricks that you can implement in order to make the most of your cloud solution and keep costs within a designated budget.

How to save on your data centre costs by transitioning your company to the Cloud?

You can actually save money on data centres that are located in the cloud:

• Get yourself a good subscription plan
  For example, you can choose to work with an IT partner who is part of the Cloud Solution Provider Program (CSP). They’ll be able to offer you a cost-effective and flexible solution – designed just for you.
  
  
• Try Reserved Instances (RI)
  By committing to a specific level of computing capacity usage over a certain period of time, you will receive a discount on your bill. For instance, you can save up to 72% with Amazon EC2 RI – compared to their On-Demand pricing.
  
  
• Cooperate with a bigger partner
  For instance, working with AWS or Azure provides you with a lot of additional benefits, such as continual support during and after the transfer, as well as discounts for licences and services.
  
  
• Bet on automation and auto-scaling
  Trying to configure, deploy and scale everything manually is a simple recipe for making many mistakes along the way and also for wasting your precious time. Automation will accelerate your processes and lead to better performance and availability.
  
  
• Take advantage of continuous monitoring
  Keep an eye on how much you spend, track unexpected spikes and cost anomalies, so that you can react before they escalate and maintain control over the situation.
  
  
• Find unused resources
  …and get rid of them immediately, so they won’t generate pointless costs. It’s easy to forget to turn off some temporary servers or remove storage that’s no longer needed. You could also consider creating a work schedule to help reduce costs while those resources are not in use.
  
  
• Correct inefficient code and optimise services
  This will help you limit your network traffic and increase your performance, which will be reflected directly in cost reduction.
  

The cost of Cloud Migration: conclusions

At first glance, cloud migration costs may appear to be high, and the entire process may seem unprofitable. However, when wisely planned and optimised, cloud solutions are actually very cost-effective, especially in the long run.

They often allow organisations to save considerable amounts on the total costs of a local infrastructure, especially in terms of: licensing, equipment, technical support, human resources, energy, air conditioners, and electric power generators, etc.

And what’s even more impressive is that they can positively influence the company as a whole, bringing lots of benefits for everyone – from junior specialists to management, to end users, and finally – to stakeholders as well. You pay less, innovate faster, and increase your profits by attracting more customers. What’s not to like?

And if you need some assistance in this area – you can always ask us for help.