Gagan Singh - February 15, 2018

Reveal the True Cost of Cloud Migration and Services

Gaining a big picture view into the financial impact of your cloud migration is all about visibility. You need to accrue details across a multidimensional collection of billing and performance data points, then understand trends and implications. You need the financial equivalent to high resolution photography. Broad brush strokes just can’t capture the image.

AWS initially launched in the early 2000s with a very simple set of tools. Now, cloud service providers (CSPs) offer a constantly evolving suite of platform and infrastructure services. They can support just about any business technology out there. You can build solutions from bare metal to serverless and everything in between. Organizations are building solutions with the variety of storage and networking options available now, along with services such as database, data warehousing, artificial intelligence (AI) and machine learning (ML).

The cloud migration conversation now echoes through business units from Accounting to Finance to IT to Operations.

Should we migrate? When? Where? How?”

We’ve seen numerous case studies documenting successful cloud migrations and cloud-centric technology implementations. With cloud adoption accelerating and the advantages of cloud services ever more apparent, it’s understandable that an observer might wonder why so many applications and infrastructures remain in the data center.

It’s the business challenges, not just the technology concerns, that need to be solved. New software applications cost money to develop and implement. Migrations can slow growth. They need to deliver return on investment (ROI). The benefits of cloud are inviting, but do they pencil out?

“How much will cloud migration cost?” 

“How long until we start seeing efficiencies or break even?”

Absent direct, tangible answers to those questions, cloud adoption can not – and probably should not – move forward. The decision-slowing uncertainty stands between the organization and the tantalizing opportunity to transform your operation, increase flexibility and sustain higher rates of growth.

Before you sign on the dotted line and schedule the migration kickoff, it helps to be more certain of the financial impact on your business.

Value Visibility

Visibility is key. Ever since the first organizations dipped their toes into AWS over a decade ago, it’s been clear that realizing complete cost visibility – actionable visibility – is still not that easy. Cloudability doesn’t think of cloud migration as a simple point-to-point journey. It’s a cycle of continuous improvement and iteration.

Your business is always in motion and the next potentially valuable technology is always right around the corner. That makes assessing the financial impact of cloud services an ongoing project. Case studies of cloud success – not just enterprise migrations but also born-in-the-cloud businesses – are the stories of smart financial moves made with the best possible information.

Companies that continuously prioritize cost visibility are better able to leverage the ever-changing CSP offerings (along with their ever-changing cost structures) for the ever-changing business environments.

Visibility is the result of revealing the True Cost™ of cloud services. The broad brush strokes of canned reports and simple dashboards don’t tell the story. True Cost™ involves taking into account constructs such as discounts, credits, amortization and coupons. Cloudability has shown that an ongoing process of data collection and data-driven process improvement enables cloud adopters to make smarter decisions. That means planning, migration, governance and innovation are guided by visibility into their actual cloud costs.

Intelligence: Resource Tagging and Organizational Accountability

Moving to the cloud shifts the way resources are enabled and used. A more democratic model becomes possible. Business units and innovators can work more autonomously. Cloud services can be easily turned up by the front-line users who need them, but the organization also needs to institute governance. Autonomy without oversight can cause a monthly bill to explode to a seven-digit figure without warning.

By tagging resources, using linked accounts and assigning them to departments, you can develop chargebacks. You can tie costs to value. With that insight, budgeting can become more granular and you can focus on the true drivers of your business.

Case study: “A report isn’t valuable because it presents all the data. It should present enough of the right data to the right people, so they can make confident, effective decisions.” With 28 business units using AWS, Cimpress partners with Cloudability for ongoing improvement of their cloud services usage.

Opportunity: Reserved Instances

AWS and other service providers offer reserved instances (RIs). Committing to a certain block of usage upfront can make for steep savings. With good visibility into not just your historic usage but projections of your future needs, you can maximize these savings.

Case study: “Each team can now have visibility and accountability into their spending. It created an opportunity for them to catch and understand spending increases quickly (which makes any Finance team happy).” Cisco Umbrella uses the Cloudability Reserved Instance Planner and Portfolio to get 91% RI coverage.

True Cost is Visibility

The true cost is how you keep score in the cloud with accuracy, precision and timeliness. You need to know not just what you are spending, but why and where. You need to be able to control those costs and tie that cost to value.

As a cloud services user, maturing means committing to an always increasing visibility of the cloud spend.

Expanding knowledge and visibility is a process. An organization can’t just jump ahead. The cloud has the ability to perform for the business, even transform it, but first you should build a strong foundation of usage controls and forecasting tools to ensure cost-effectiveness in an ever-changing business environment.

If you’d like to put some of this theory into practice and gain visibility into your own cloud,  start a free trial of Cloudability today.

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