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Cloud Migration

Calculate cloud costs correctly and comparably

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CCE

7 minutes
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Attractive pricing is a decisive criterion in the decision to migrate to a modern cloud infrastructure. If parts of the in-house IT are to be moved to the cloud, above all the result of a correct calculation is an important step towards successful migration. We show you how to correctly compare the costs for cloud instances and in-house solutions.

The decision to move to a cloud-based IT solution is closely linked to the question of the costs incurred by a cloud migration. It should be borne in mind that cloud costs cannot be calculated as a lump sum, but always relate individually to your company, your requirements, applications and objectives.

Digital transformation often starts with cloud solutions. The decision for the cloud can also mean a real competitive advantage, because it forms the sustainable basis for future-proof business models. This article is about the benefit that companies think of first when it comes to cloud computing: the reduction of IT costs. We show why almost all other benefits always have to do with cost reductions and what companies often get wrong when they compare current IT costs with cloud costs.

IT costs

Many companies feel the same way when it comes to IT management and maintenance or new digital solutions in the company, such projects are associated with high costs. Cost points of a traditional on-premise solution often amount to the same factors in companies, devouring vast amounts of budget in the process. Power and cooling are significant cost drivers that many companies still do not take into account. The operation of server rooms with uninterruptible power supply and air conditioning units, licenses for e.g. VMware and Microsoft, to name just the most common or largest cost factors here, expenses for the redundancy of the systems (backup and disaster recovery) and last but not least the number of employees and ongoing qualifications are further main points. The cloud, on the other hand, greatly reduces IT operations.

Compared to on-premise solutions, the cloud has only three main cost points that need to be considered.

  • Storage capacity
  • Network capacity
  • Performance

You only pay for what you actually use. Due to the high flexibility and scalability of the cloud, the provision can be adapted to the individual needs of the company.

There are many reasons for switching to the cloud. One of them is the ability to use different cloud models flexibly. Private cloud, public cloud or a hybrid approach - no matter what challenge a company faces today, the right model already exists. You just have to decide on the right strategy.

How the move to the cloud pays off

1.calculate and compare IT costs

Keeping IT costs low is a desirable and constant topic for every company. The cloud and cloud computing offer the right apparatus for realizing this desire.

In order to compare IT and cloud costs comprehensibly, all cost factors that play a role for an IT infrastructure in both types of provision must really be taken into account. And that is precisely what is not happening in many cases. Because in order to determine what costs one's own IT actually incurs, one must first perform a precise analysis of the cost structures. As is the case in most IT landscapes, you will quickly discover that a large proportion of the expenses are for the IT infrastructure and operations and are not available for other projects. The data center, which serves as a central warehouse for storage, administration and further processing, accounts for the majority of this, including server, storage and software costs. This is followed by network costs. And this is where a crucial error lies in the calculation of actual IT costs. Because costs for installation, operation and maintenance, including energy costs for power supply and cooling, plus expenses for redundancy, backup and disaster recovery are not even taken into account in most comparisons. With a cloud solution, these expenses are borne by the cloud provider, e.g. in an IaaS model, and are included in the cloud costs.

2.scalability - reacting flexibly to requirements

In order to grow as a company and to meet new business requirements, one's own IT infrastructure must inevitably continue to expand. With the traditional on-premise solution, this means investing in hardware components and more licenses for software. But what if you want to reduce your IT due to economic requirements or changing market conditions? In the local IT infrastructure, this is practically impossible to realize without effort and loss of value.

The rapid scalability of the IT infrastructure according to demand in the private cloud is one of the most important arguments for cloud computing. Even short-term load peaks or rapid growth can be easily responded to and resources scaled up or down.

Check whether you can flexibly adapt your local IT infrastructure to changing customer requirements or increasing load peaks. Work out what you would need to invest in your on-premises IT to scale up to exactly the performance you need at the right time and compare that with what it would cost you in the cloud.

Our cloud experts will help you determine cloud costs and tell you which costs, match those in the cloud. ->

3.high availability - an investment you don't have to make

In on-premises IT, there are various coordinated concepts that ensure that if a server fails, it is immediately replaced by another server that can smoothly continue to work without failure. Large companies, for example, use entire data centers that map their own IT redundantly and can take over work immediately in the event of a failure. However, this is complex and costly.

Smaller and medium-sized companies (SME) may not have complex data centers in operation, but high IT availability is also indispensably important for them. After all, downtime costs money.

With the right cloud solution, you benefit from the latest and most innovative technology on the market. Cloud providers are constantly investing in the high availability of their systems and the expansion of new services to be offered. So as a business, you benefit from an infrastructure based on the latest technology and services that you can test and use at will without spending huge budgets.

So the difference is who has to invest. In a cloud infrastructure, the cloud provider invests. With your own IT and on-premise solution, it's you.

Conclusion

With the thought of moving to a cloud-based solution, an investment decision is inevitable. However, one thing is important. You should not be afraid to change anything. If you are thinking about moving a single application to the cloud or using a specific service from the cloud (such as virtual workstations), there is no need to make a large-scale comparison, here it is enough to run the desired service in the cloud with the help of a cloud service provider. However, if you want to benefit from a whole range, most innovative services, high availability, security and flexibility, it makes sense to get an overview and compare what applications and costs incurred compared to a cloud solution.

Don't be deterred to consider cloud technology and contact us as a consulting partner to get an overview of your requirements and the needs of your business. We help you to plan and calculate your current IT costs and thus create transparency and innovation potential for your IT.

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