Compiled by Kiran Kumar, Business analyst at Powerup Cloud Technologies
Contributor Agnel Bankien, Head – Marketing at Powerup Cloud Technologies
What is the “migration bubble? ”
Organizations today are experiencing a major cultural shift in terms of adding value to their existing business operations to bring in more agility and cost optimization. Fortune Business Insights predict that the global cloud computing market size is anticipated to hit USD 760.98 billion by 2027.
With cloud-computing practices gaining momentum at such a fast pace, it is vital to understand that while reaping cost benefits from it is inevitable, the initial investments are quite significant.
Migrating to the cloud can prove expensive, as organizations need to accommodate new costs incurred from migration while also continuing to finance the running and maintenance costs of their current on-premise infrastructure. This is what is known as the cloud migration bubble or the double bubble.
According to Amazon Web Services (AWS), the peak time and money necessary to migrate to the cloud is the “Cloud Migration Bubble.”
It is pertinent that rise in IT costs is concurrent to business growth and when organizations are in the process of building an efficient migration blueprint, it is important to first understand the current costs of running applications followed by the interim costs.
For this, organizations need to take into account the amount of time and money spent on the initial planning, assessment, duplicating environments, third party consulting, upskilling existing resources and technology. Additionally, they also have to endure the burden of on-premise data center costs from maintaining servers, storage, network, physical space and labor required to support applications and services until the organization migrates all-in to cloud.
When the migration is on-going, there may be a few test workloads as well as some duplicate workloads on cloud, that add to the already rising overall costs.
If migration is planned to correspond with hardware retiral, license and maintenance expiration, and other opportunities that would eventually help reduce costs, the savings as well as the process of escaping cost associated with a full all-in migration to cloud will allow enterprises to fund the migration bubble better and may even be able to shorten the duration by applying more resources when required.
What causes it?
When migrations happen in stages, it is common to have resources sometimes running on-premise as well as on cloud while some are still in queue causing duplication of environments for which organizations end up paying for both, the production environment as well as the new cloud set up. Costs related to licensing of automated tools to speed up the migration process also instigates the bubble to grow.
Secondly, replicating data from source to target cloud followed by testing of the replication progress, which is a time consuming job, inflates the double bubble largely.
Just before the infrastructure is ready to be moved fully on to the cloud, a migration test that ensures the recovery systems are able to support critical business needs to be performed. This is known as a cutover test where the new set up coexists with the old system before its complete withdrawal until an efficient and controlled system is established.
Not taking advantage of the cost governance tools also leads to elevated expenses. It is always advisable to move to cloud in phases rather than move the applications, departments or resources one by one. It is important to evaluate which applications are good enough to move to the cloud, which ones need to be rewritten to benefit from the cloud and applications that need to be terminated for good to keep a check on the bubble.
What Top CIOs have to say about it?
As per a recent study from SaaS network monitoring service LogicMonitor, close to 40% of business workloads are still running on-premise, whereas Tech Pro Research states that 37% of surveyed businesses are still evaluating hybrid models to help mitigate public cloud-associated risks.
While adaptation to cloud services is definitely on the rise, CIOs across organizations are still cautious when it comes to choosing the most accurate cloud service or capacity as well as taking exhaustive technical decisions owing to the vast availability of complex cloud solutions in the market.
Keeping a strict check on the already rising costs apart from being concerned about security on cloud is another challenge especially when data breaches can be attributed to poor configuration of cloud instances. It is widely believed that such errors are mainly caused by end users and cloud administrators and not by cloud providers where research from Gartner indicates that by 2020, 95% of cloud security failures will be the customer’s fault making the CIOs and CTOs accountable for their decisions. However, Gartner studies also reveal that CIOs are beginning to see cloud computing as the number one technology today and there are signs of more consideration and acceptance towards digitization needs.
In the long run, the future leaders of technology need to redefine and magnify their existing roles and accept cloud as an efficient, cost-effective tool. They also need to continue adding value to their organizations by strategizing to build innovative solutions and products by merging new technologies with existing tools continually.
Busting the cloud migration bubble – How the cloud can help?
Once the costs contributing to the migration bubble are understood, the next step would be to determine cost saving strategies that will drive the cloud migration process faster.
Some unique ways to bust the bubble
Organizations can opt for third-party providers to outsource their IT maintenance, which is significantly more economical than servicing from Original Equipment Manufacturers (OEMs). The strategy has guaranteed noteworthy savings of almost 50-70%.
Organizations are expected to invest in long-term contracts with OEMs for new hardware in case of breakdown or failure during migration. Instead, if third-party vendors are approached for purchase or lease of certified systems or components, organizations can attract a sizable savings of over 80% as compared to OEM prices.
The idea is for third party vendors to evaluate the organization’s existing IT set up to buy out all the hardware assets at the current fair market price. These equipment and assets can be leased back to the organization until the cloud migration process is on-going, after which, the third party vendor can discard the on-premise hardware without the organizations having to enter into any long-term maintenance contracts. This instantly generates a reasonable amount of capital that can be used to fund new cloud projects, hire consultants or build internal cloud teams.
The applications that would benefit most from cloud cost and efficiencies must be identified based on the “6Rs” — retire, retain, re-host, re-platform, re-purchase, and re-factor. Applications that would guarantee higher ROI while cutting down significantly on operation costs should be prioritized for migration. Optimizing costs helps control the migration bubble.
Cloud providers offer various migration acceleration initiatives like initial buy-ins or sponsors, consulting support, training and free service credits to provide a head start on the migration journey. Additionally, cloud service providers also offer special discounts if enterprises opt for their cloud platforms while also helping them build a robust operational foundation by providing 24/7 support.
Top cloud service providers are known to design innovative pricing techniques that tender customized per second billing, sustained or committed usage discounts, provisioning preemptible VM instances, pay as you go services with no lock-in period and zero termination costs. Enterprises thus enjoy a significant reduction in their cloud infrastructure spend which in turn helps offset the initial cost of migration.
Certified cloud architects and consultants can provide dedicated training to the organization’s resources thus accelerating the cloud migration process while invariably diminishing the migration bubble.
As a result, though expenses may seem overwhelming while the transition happens, it is essential to understand the immediate savings as well as benefits that will follow. Thus, based on the above factors, the Total Cost of Ownership (TCO) can be calculated to perceive an optimal migration bubble analysis.
For instance, a Swedish media service provider focused on its audio-streaming platform services, had difficulties provisioning and maintaining its in-house data centers. The decision was made to move to cloud in two phases after ample planning and assessment with a dedicated cloud specialist assigned to oversee the migration. This not just helped them minimize the costs and complexity of the cloud migration but also ensured smooth and efficient product development operations while allowing their resources to focus majorly on innovation.
In another illustration, a web based Software Company’s core application that enabled software development teams to collaborate on projects in real time, wanted to improve their performance, reliability and evolution on a massive scale. They decided to migrate from their current cloud service provider to a cloud native container based infrastructure that offered increased reliability. They initiated the move by mirroring their data between both cloud providers, eventually achieving improved performance, scalability and availability post migration. They averaged from 32 minutes of weekly downtime to 5 minutes after the cloud-to-cloud move.
Ways to avoid the migration bubble
The higher the time taken to migrate to cloud, the higher is the cost endured, thus inflating the bubble.
Therefore, every organization must build a framework to standardize their architecture, automate deployments and run operations at a low cost. The best way to avoid or keep a tab on the migration bubble is to consolidate and implement best practices from previous migration projects. A well-defined standardized infrastructure can help automate and expedite cloud migration operations. Using such a template warrants an optimized cost structure and organizations can flatten the bubble curve consistently.
Apart from implementing best practices, it is also important to define the pace of migration, anticipate the time needed to transition, identify and test replication of data and applications and define a waiting period while moving from source to target cloud. Communication within and across teams is the key to building the acceptance criteria before organizations can move on to the actual planning and assessment of migration. Re-examining estimates and schedules is a must to control and lessen the double bubble effect.
Many organizations are shifting their business operations to cloud in order to simplify infrastructure management, deploy faster, ensure scalability and availability, increase agility, enhance innovation, and reduce cost.
With a clear idea of what comprises the existing infrastructure costs, what are the different factors and expenses contributing to the migration bubble and an estimate of the expected savings, organizations will be better placed to arrive at the payback time and projected ROI, consequently mitigating the migration bubble.