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Cost Considerations When Moving To The Cloud

Updated: Jan 20, 2023

As cloud-based solutions for business infrastructure become more and more popular, there’s never been a better time to make the move from on-premise to cloud. However, as with everything, there are costs associated with migrating over.

With the many economical benefits of the cloud, this may often seem negligible. However, we believe that it’s still important to consider the costs of migration to ensure that you’re not met with any shock expenses during the process.

That’s why in this article, we’re going to take a look at the cost of a cloud-based solution as opposed to an on-prem solution, and the cost of migration.

The Cost of On-Premises Infrastructure

On-premises infrastructure can be incredibly costly for companies to run. There are many costs associated with a physical system as well as other considerations such as energy and maintenance costs.

What are some of the biggest cost drivers on on-premises infrastructure?

· Server Hardware: Hardware can cost thousands of pounds, and can cost lots of money to set up depending on the infrastructure. This will last around ten years and will need to be replaced after that period.

· Personnel: Hiring in-house IT specialists specifically to manage your on-prem systems can be costly. Of course, you’ll need some IT support anyway, so this only counts excess employees.

· Energy Costs: When calculating costs involving cooling and server storage, energy is quite a large expense to running an on-prem system. This doesn’t even include other energy costs within your business.

· Repairs: Depending on what needs repairing or replacing, you could be looking at spending thousands on new server hardware or spending a hundred on a few spare parts. This is a consideration, but not a quantifiable expense as you may not need repairs.

· Software: To run a Windows server, you’d have to pay for licensing. There are many different options, but Microsoft’s lifetime one-time fee is the most comparable one here.

It is these upfront costs that contribute most to the Total Cost of Ownership (TCO) of on-premises infrastructure.

Moving to a cloud deployment using a Cloud Service Provider (CSP) like Azure can help limit the hardware costs of buying and refreshing systems.

The Cost of Migration

Whilst a cloud migration will save your business money in the long run, there are still inherent costs to take into account.

These are the considerations you’ll have to make:

· Migration readiness and workload complexity

· Migration strategy chosen

· Cloud deployment model

· The amount of data to be transferred

· Requirements for workload availability

· Workload refactoring and configuration activity volume

· Migration automation software licensing costs

· Testing coverage

These costs differ depending on the size of your migration. Businesses often offset the cost of migration due to the number of costs saved with a cloud-based solution, and so this cost is often much lower than operating and maintaining an on-prem system.

With that being said, partnering with an MSP to migrate to the cloud can significantly help you save costs. A good MSP team will help you plan out your migration with detail to ensure no money is wasted anywhere and is much cheaper than hiring an in-house team to migrate with.

Cost of Maintaining Cloud Services

Cloud services require much less maintenance, as the physical infrastructure will be maintained by the service provider.

There are still some costs associated with maintaining a cloud-based infrastructure, however —

· Monitoring: Monitoring and logs are often an additional cost to a cloud service., For example, Azure monitoring can cost anywhere from 50p to £2.50 per GB depending on whether you want analytics logs.

· Employees: You will still need some IT specialists (either in-house or outsourced) to be able to do basic tasks, however, this cost will be significantly reduced as you won’t need employees to maintain physical infrastructure.

· Scaling: Scaling any aspect of your infrastructure whenever needed will have apparent costs, as increasing any aspect of your virtual infrastructure will cost more. This is a common cost and will fluctuate depending on your organisation’s needs.

Monthly Cloud Costs

Using any cloud-based service will have a cost of running, but the cost will be much less than operating and maintaining an on-prem server. This is because a cloud-based server is all based off-prem, meaning no large energy costs or physical hardware to invest in.

For example, for Azure, you just have to pay Microsoft a monthly fee for the cloud infrastructure you use. These costs can be scaled up and down based on your current requirements.

Pricing depends on how powerful the hardware for your server needs to be and the resources and bandwidths needed to power your workflows.

Other Benefits of a Cloud-Based System

The financial benefits of a cloud-based system are obvious. However, there are far more benefits to a cloud-based system than just the cost.

· Flexibility: Rather than having to physically change components within your system, cloud-based systems are easily scaleable and can be used in a variety of manners.

· Security: With 94% of businesses saying that they saw security improvements once moving to the cloud, it’s obvious that the cloud has security benefits. Having all of your systems based on a cloud system means that it’s difficult to attack physically, and services such as Azure have a suite of security features to protect your data.

· Mobility: Cloud computing has meant that business has become more flexible and mobile, as employees can access data on the cloud from anywhere. As remote working becomes more popular, the ability to easily work from home without difficulty becomes a large benefit for most businesses and employees.

· Physical Considerations: A physical server takes up lots of space and requires sufficient cooling. This can also generate noise and can result in other difficulties. By using a cloud-based system, your company doesn’t have to worry about the physical hardware.

Get in touch with us to explore cloud migration!

While financially beneficial in the long run, there are some considerations to make when migrating to the cloud. However, the benefits typically outweigh the costs of cloud migration.

With the added benefits of cloud computing and the difficulties of physically maintaining an on-prem system, there’s never been a better time to make the move over to the cloud and truly take your business to the next level.

Want to know how much cloud migration will cost? Working with a managed service provider to draw up cloud migration plans and identify your cloud requirements can help clarify any cost concerns. Get in contact today to learn more.


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