Cloud migration is an ongoing endeavor for any organization that wants to gain the advantages of cloud computing: flexibility, scalability, and reduced costs. Nevertheless, the shift to the Cloud is a capital-intensive venture, and the probable costs of the migration must be forecasted. This article outlines essential steps, essential factors, and peculiarities of cost estimation for a cloud migration project.

What Is Cloud Migration?

Cloud migration moves an organization’s data, services, applications, databases, and IT infrastructure from on-site facilities or one cloud environment to another. It is one of the best ways to properly store data and securely keep it in a better space. Therefore, most organizations quickly rely on the Cloud to store and secure their data. Thus, as a company or any institution that looks forward to storing its data safely and adequately, it is essential to consider storing data on the Cloud. However, when you need to store data on the Cloud or transform from the local ways of storing data, it is automatic that you will undergo the significant stage of cloud migration. Cloud migration is thus more of a process enabling you to transfer the local data and items into the Cloud. Some reasons and objectives can push you as a company or institution to consider migrating items and data to the Cloud.  Some key reasons you can consider migrating your or your company’s data to the Cloud include cost reduction, scalability, and increased performance.

Let’s explore an overview of some of these reasons

Objectives of Cloud Migration

When a company or institution considers migrating to the Cloud, several reasons push them to do so. Let’s explore an overview of some of these objectives:

• Cost reduction

Migrating to the Cloud means that a company will save a lot of costs on the data it stores locally. Data stored locally might be expensive for the company as it involves maintenance and updates that the company or institution directly performs. With cloud storage, maintenance services are performed by the cloud hosting service, which, in turn, helps save the maintenance and update costs.

• Scalability

Data stored on the Cloud is more scalable than data stored locally. Transitioning to the Cloud means that the company will enjoy perks such as the scalability of its data and even the entire system.

• Increased performance

Cloud migration and storage come with additional perks, such as increased performance. Data stored on the Cloud is accessible in real-time, allowing the owners to easily access anything stored in the Cloud. Therefore, as a company, migrating to the cloud space means their service provision will be faster, including easier data upload and retrieval from cloud storage or databases.

Critical Types of Cloud Migration

Cloud migration can be categorized based on its start and end status. Therefore, it is essential to understand each type of migration to determine the best approach to migrating from local data operations to cloud storage. Let’s dive into the critical kinds of migration and understand each of them properly.

• Migration from On-Premises

On Premise to Cloud Migration, this is by far the most popular method of migrating to the Cloud. It refers to migrating Information Technology systems, enterprise applications, and databases to cloud computing environments—either public, private, or hybrid environments. For instance, a firm may host an application and then decide to migrate to Salesforce, a cloud-based CRM solution, to cut operational costs.

• Cloud-to-Cloud Migration

Companies sometimes move their applications from one provider to another because of cost differentials, feature advancements, or pumping up performance. For example, a firm may transfer its applications or data from AWS to Google Cloud because it incorporates cheaper cost structures or regional advantages.

• Cloud Repatriation

Businesses sometimes migrate some operations from one Cloud to another, from the public Cloud to the on-premise infrastructure or private Cloud. This may be due to economical, legal, or efficiency reasons, such as achieving better results or meeting expectations.

• Hybrid Cloud Integration

Hybrid cloud solutions, therefore, involve synchronizing an organization’s on-premise resources with cloud solutions. This approach enables them to have sensitive workloads containing the organization’s data within their control while enjoying the dynamic nature of the Cloud for other processes.

• SaaS Adoption (Application Migration)

This form of migration refers to migrating from on-premise applications to third-party SaaS applications. Companies don’t migrate an application in its given state; instead, they opt for a cloud-native one.

A good example is migrating an on-site email server to Microsoft 365 or Google Workspace. This is beneficial as it is Easy to manage with IT, lowers time-consuming overhead, and facilitates updates. Since it is a suitable type of cloud migration, it faces challenges in data conversion and making the users of the new application.

• Infrastructure Migration

IT migration or infrastructure migration, in other words, means relocating an entire IT structure, such as servers, storage, and network components, to the cloud environment. This is generally achieved solely with infrastructure-as-a-service (IaaS) solutions. An example of such a type of cloud migration is converting physical servers to virtual machines hosted within AWS or Azure.

Some benefits include optimized resource scaling, lower costs of physical machine maintenance, and shorter resource provision periods. However, the interdependency of the hardware and software components may be very intricate and require a lot of planning.

• Development and Testing Environment Migration

It is typically associated with development or testing environments as one of the workload types migrated to the Cloud for scalable resources. This migration is typical for organizations that feel having physical space is too expensive.

Example: We need to consider AWS Elastic Beanstalk as a substitute for in-house servers for application development and testing.

Benefits: Templates allow environments to be created quickly and easily, and there is little need for significant infrastructure investments.

One significant challenge in the migration process is guaranteeing the integration of cloud testing frameworks with live production systems.

Factors Affecting Costs of Cloud Migration

Cloud migration cost is a function of many factors; some are nature-related, scale-oriented, and character of the organization.IT infrastructure, various types of workloads, and the migrating approach contribute to the overall cost of cloud migration. Let’s explore the critical cost drivers:

• Current Infrastructure Assessment

In that case, one must efficiently know the pre-migration IT scenario. This involves Inventorying assets, Listing applications, servers, databases, storage, etc.

Analyzing dependencies: Most crucial, it is possible to establish relationships between the different applications and systems.

Evaluating workloads: Identifying those workloads that are preferable for migration.

Depending on the organization’s size, this assessment often requires specialized tools or consulting services, which can cost between $5000 and $20000.

• Migration Strategy

This means that costs will be affected significantly depending on your likely chosen migration approach. The most common strategies include:

Rehosting (Lift-and-Shift) involves moving existing, on-premise applications predominantly intact to the new cloud environment. It is faster and cost-effective, but it may need to be designed to fully utilize cloud-native characteristics.

Re-platforming: Modifying applications slightly to take better advantage of cloud characteristics.

Refactoring: Modifying the existing applications to leverage aspects of cloud solutions fully. Contrary to this, this is a little costly but cheaper in the long run.

Hybrid Solutions: The use of both physical hardware and cloud computing resources.

Refactoring and hybrid models are usually used where there is more initial investment because of development and integration.

Cloud Service Provider Costs: Concerning the costs, the selection of the type of Cloud the provider to work with, such as AWS, Microsoft Azure, or Google Cloud, has an impact. Some of the critical expenses include:

Compute resources: Virtual machines, containers, & Serverless computing.

Storage: Backup storage, block storage, and object storage.

Networking: Transmission, the splitting of traffic, and implementation of VPCs.

Management tools: They include supervisory, protection, and automated solutions.

Pricing for the services further depends on the pricing structure adopted by the provider, the geographic location of resources, and contractual service level agreements.

Data Migration: Moving data to the Cloud is often intricate and expensive, especially when it has vast volumes of data. Key cost factors include:

Volume of data: More data takes up more time and resources.

Data transfer method: These are networks-based or offline options such as AWS Snowball or Azure Data Box.

Bandwidth: Some organizations may require more internet bandwidth than they currently have and must make dedicated network connections at an added cost.

Data transformation: Pricing associated with attuning or re-scrambling data that may be needed in the cloud environment. For instance, replicating 10TB of information through a high-bandwidth link can take between $500 and $5000 or even more, depending on the provider charges and Internet connection rate.

Application Modernization: Applications built in earlier generations of computing may require some enhancement to work well in the Cloud. Modernization costs include:

Code refactoring: Modifying portions of the application to integrate with the Cloud.

Containerization means enclosing applications in a container that makes it easier to deploy.

Testing: Ensuring that applications after migration work optimally and perform optimally.

Based on their complexity, refactoring costs are estimated to amount between $1000 and $15000 per application.

Training and Organization Development: Implementing cloud technologies generally involves training IT staff and end-users. A training program for tools like Kubernetes, Terraform, or any cloud provider’s services will likely cost between $500 and $3000 per participant, depending on their complexity and duration. Second, change management initiatives imply transition and no loss of productivity accumulated throughout the change.

Third-party tools and services: Some of the most common tools are third-party tools in security, monitoring, or backup after or during migration. Examples include:

Migration tools: Such tools help in this include Cloud-Endure or Azure Migrate, among others.

Monitoring tools: We have technologies like Datadog and New Relic guaranteeing performance visibility.

Security tools: Other services like Cloudflare or Prisma Cloud help secure during this migration.

Third-party tools can cost anywhere from $1,000 to $10,000, depending on usage and how long they are needed.

System downtime and the aftermath on productivity are of much concern.

Downtime during migration may present a corresponding loss in operating income or productivity. It’s essential that:

1. Important migrations should be done during off-peak times.
2. It is also recommended that phased migration be adopted to reduce interferences.
3. Ensure high availability of solutions adopted in various organizations.
4. Depending on operations, unplanned breaks can result in losses of $5,000 for a small business and $500,000 for a larger business.

Ongoing Cloud Costs: Post-migration costs must be factored in, including:

Subscription fees: For general purposes and cloud-based resources and services.

Scaling costs: Depending on the increasing number of workloads and users.

Optimization efforts: Consciously or unconsciously adjusting the resources to manage the cost-effectively.

CIOs and other organizational leaders underestimate post-migration expenses, which are equal to 30–50 percent of the entire cost of Cloud in the first year.

Cloud Migration Cost Estimation Techniques

When considering cloud migration, it is essential to conduct a needs assessment and analyze applications for migration to determine possible business goals that the migration should achieve.

Learning the guidelines for prioritizing workload for migration to the Cloud is essential.

The Inventory

1. Discover the applications’ architecture and system profile to identify essential assets and their dependencies.
2. Estimate the volume of data and resources to move concerning the destination framework.
3. The second central decision area when entering the Cloud is to choose the specific Cloud Provider and Services.
4. Assess cost structures for service providers such as AWS, Azure, or Google Cloud.
5. Evaluate performance, pricing, and services of different levels for the service relevant to your applications.
6. Regional differences in pricing should also be considered.
7. Select a Migration strategy & best practices
8. Lift-and-pitch or not – that is the question.
9. Allocate development or consulting costs of related programs.
10. Plan Data Migration
11. Estimating the cost of moving data according to volume, bandwidth, and tools is also possible.
12. Immortalize expenses for protecting data when converting it and moving it to the new location.
13. Application modernization should be provided with enough budget funds.
14. Discuss the nature of the business technological contingency and legacy systems.
15. Schedule yourself to consult with development teams to assess the amount of effort required for modernization.
16. As a result, Training and Support Costs should also be included.
17. Allocate capital for training IT personnel as well as for user training.
18. If required, show consulting and managed services as costs in a figure to give a better perspective.
19. Add Contingency Costs
20. Set aside 10–20% of the total cost for emergencies.
21. There are factors such as downtime, time overruns, or other additional licensing issues to consider.

• Free Assessment Tools

All the major players in the cloud business have cost-estimating instruments available for free, such as the AWS Pricing Calculator or the Azure TCO Calculator. These should be used to generate average figures to develop the first approximation of the estimate.

• Go for a Phased Migration Model

When migrating, divide the process into phases to help track costs and make changes.

About Cloud Cost Optimization

After migrating to the Cloud, periodically review that side to avoid paying for unused resources. For this optimization, use AWS Cost Explorer or Azure Cost Management.

• Partner with Cloud Experts

Therefore, speaking to internet consultants can help advise on areas where savings can be made and where cloud solutions may require fixes.

• Real-World Examples

As an initial example, Small Business Migration works perfectly in this case.

A tested Internet retailer with modest online sales and earnings moved its website and database to the AWS Cloud. Hence, the migration cost was about $15000, comprising data transfer costs, VM set-up, and some refitting.

• Another example is Enterprise-Level Migration.

An example is a multinational corporation that moved 200 applications to Azure. The data transformation process took 18 months and required $2.5 million, which required refactoring.

Conclusion

Outsourcing costs can be calculated only if the current IT structure, objectives, and plan are clear and a good plan exists. By adding up all these essential costs, using cost analysis tools, and following best practices, you can make the correct budget for your firm aimed at the set objectives. Cloud migration does come with some capital expenditure at the beginning, but the subsequent gains tend to outcompete the initial investments, allowing organizations to be innovative and grow. However, with the current growing technology, it is essential that companies, industries, or any other institutions focus on safeguarding the security and upgrades on data operations. Doing so requires that the companies invest in migrating their data to the Cloud.

Data stored on the Cloud comes with many perks, such as fast operations and real-time data access. More importantly, data stored on the Cloud is more secure than data handled locally. It is much easier to lose data stored locally, even when there are extra backups to support the storage. The cloud service is responsible for securing data and its backups; therefore, you can always be sure to access your system or data anytime you need it.

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