BlogConducting a Cost Analysis and Review Prior to a Cloud Migration – Getting Started and What to Look For

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Companies need to exercise caution and diligence when selecting their cloud provider and application cloud architecture (hybrid, multi-cloud, or both) as their business applications and data center services. Some applications might be easily replaced using a SaaS deployment model, while others might require the use of cloud-native computing services. The process of determining the best cloud vendor is mainly predicated by business application requirements and through conducting well-architected reviews for each cloud platform under consideration. It is critical to recognize that the right mix of components and organization structure will likely be through a customized solution.

We highly recommend that every organization first ensure that moving to the cloud is a good business decision by conducting a cloud analysis and cost review. Thoroughly review the workload environment and generate a detailed report of the risk-rated findings. Migrating business applications and services into a public cloud requires thoughtful consideration of the challenges, trade-offs, and costs.

Hidden and unknown cloud charges are often the norm for first-time migrations. Businesses need to not only plan for storage and CPU usage rates, but also need to plan for egress network and bandwidth costs. Although there are pricing calculators to track cloud costs, such as AWS Pricing Calculator, Microsoft Azure Pricing Calculator, and Google Cloud Platform Pricing Calculator, understanding real-world usage is often an issue.

Ensuring cost optimization for the IT landscape is getting more complicated. You need a complete picture of software and infrastructure costs for both on-premises and cloud environments. Businesses need to manage large enterprise purchases of software and hardware and annual or monthly subscriptions for SaaS, as well as per-minute on-demand, spend for public cloud.

Enter Application Mapping…

Application mapping is critical when deploying to a hybrid cloud architecture. First, identify, document, and analyze critical business services and applications as well as their infrastructure dependencies. The application mapping shows the relationships between the applications and the underlying IT infrastructure that’s supporting the business services. The challenges in developing business-technology alignment are dealing with the complexity of multi-tiered applications, the myriad legacy and ancillary support processes, and the continuous nature of change in the IT infrastructure.

Application mapping includes understanding and documenting:

  • Financial Justifications – IT can apply a financial justification to its application portfolio to assess the long-term viability of supporting an application. IT can finally see the hardware, software, support costs, and personnel requirements that contribute to the overall cost of an application.
  • Cost Controls – Identify ghost or rogue applications. IT often has no inventory or documented value of these typically unsupported and home-grown applications, which are still critical to the business application services.
  • Roadmap Assistance – Evaluate all current technologies and applications as they relate to the company’s long-term roadmap and supplier support. This will provide IT with end-of-life and final vendor support dates for the technology stack and identify any migration paths for new versions of the technology.
  • Risk Identification – Identifying the risk to IT in terms of applications, technology, support, and expertise is a crucial element to business-technology alignment. It is essential to have a good understanding of whether or not the current technology stack provides the required agility to support new business models. Also, identify any risk in hiring new staff to support or maintain the IT business enterprise.
  • Asset Valuation – Provide a complete inventory of equipment involved in service delivery, and IT departments that manage their assets, according to business process and profit alignment demonstrating a high level of IT maturity.

The cloud resources used by an enterprise are continually changing, so IT organizations need to extend beyond traditional asset management tools and approaches. Organizations need ways to continuously aggregate, analyze, and optimize their cloud use and spend. Policy-based automation becomes a must-have capability for the new world of the cloud.

New business capabilities are rapidly created through a modular mix-and-match of cloud services to create an integrated system of what’s often a diverse ecosystem of components. Consider just some of the cloud service offerings available: DBaaS, DWaaS, and SaaS, along with on‐premise computing resources, to deliver new business capabilities faster than ever possible before.

We recommend that organizations start planning now on how to consolidate and depreciate your existing on-prem vendor maintenance contracts once they move to the cloud. Perform maintenance contract analysis to review, verify, and reconcile all vendor support contracts, including hardware and software reviews, to ensure they are in-sync with vendor records and have an auditable maintenance record.

About the Author

Mark Teter, Corporate Technologist

Mark Teter, Corporate Technologist

In his role, Mark is responsible for the strategic direction of ASG’s emerging technology offerings and advancing the deployment of present-day hybrid cloud solutions for our customers. Mark has served as Faculty Staff Member at Colorado State University and has written over 50 white papers on subjects including Data Center Ethernet, Linux and Open Source, Storage Area Networks and Computer Virtualization. He published Paradigm Shift in 2006, a book on emerging technologies. He is a Google Certified Professional Cloud Architect.