How Can I Calculate The Costs?
There are many advantages to moving your IT infrastructure to the Cloud. Your business can gain efficiency, productivity, mobility, flexibility, and data security. But what are the costs of moving to the Cloud? Will it be more expensive than using onsite IT solutions?
Will I Save Money Using The Cloud?
There are many advantages to moving your IT infrastructure to the Cloud. Your business can gain efficiency, productivity, mobility, flexibility, and data security. But what are the costs of moving to the Cloud? Will it be more expensive than using onsite IT solutions?
Cloud applications are popular due to their fast deployment, speed, scalability, and low upfront costs. It removes the expense and burden of managing a complex IT infrastructure as well as maintenance activities.
And it’s especially valuable if you run a small to mid-sized business (SMB). You can use technology-as-a-service rather than paying upfront for a range of hardware and software products.
Some of the benefits of using the Cloud include:
- Predictable Budgeting: You pay a fixed monthly fee for cloud services based on the number of users.
- Scalability: Easily increase the number of users in busy times or scale back in slow times.
- Business Continuity: No worries about downtime. With Hardware-as-a-Service you can use the Cloud when your onsite hardware fails.
- Increased Security: Your data is hosted in a secure data center that’s staffed 24/7. Your network security increases with high-powered hardware, firewalls, layers of security, and intrusion-detection systems.
- Accessibility and Storage: Your data and entire infrastructure can be housed and virtualized in the Cloud so you’ll have access to them even if you can’t get to the office. You can also take advantage of expansive file storage space, as well as email and unified communications.
But How Much Will Moving To The Cloud Cost?
Trying to calculate the cost of moving to the Cloud isn’t easy. You must compare your current IT expenditures with what using the Cloud will cost. The calculations for your ongoing costs must include direct, operational, and indirect expenses.
Direct Costs: These shouldn’t be too difficult to determine. Just look at your balance sheet and paid invoices for things like software and hardware. Consider the following:
- Servers,
- Networking and Cabling,
- Licenses,
- Spare parts,
- Warranties,
- Storage devices,
- The space to house your hardware, and
- Utilities to power hardware and cool server rooms.
Operational Costs: Calculate what you spend on labor and maintenance for hardware, databases, servers, and other technologies. Include the administrative costs to manage your hardware and software. Then consider connectivity costs for internet access. And don’t forget the cost of onboarding your IT staff and training them if you have one.
Indirect Costs: These are things like loss of productivity and lost customers if your IT infrastructure goes down. Review your computer log files to determine when your servers went down and how long your work was halted.
Multiply this by the hourly rate you pay your employees. Try to calculate money lost due to customers leaving your business. This might not be clear-cut, but it’s crucial that you consider what you would have made if they had stayed with you.
Calculate Potential Cloud Infrastructure Costs
Ask your IT services company to help you calculate what migrating to the Cloud will cost. You need to know what cloud solutions you’ll be using. Then, compare this to what you’re paying for now to maintain your on-premise IT infrastructure. These calculations should help you decide what network, storage, and database capacity you’ll require to run applications in the Cloud.
Cloud Calculators
Most cloud service providers (CSPs) structure their pricing, so it’s easy for you to know what you’re paying for. They have even provided cost calculators to give you an idea of what their cloud solutions will cost. The following are some you can try:
- Microsoft Azure’s Pricing Calculator
- Rackspace’s calculator
- Amazon Web Services (AWS) Total Cost of Ownership Calculator and a simple monthly cost calculator
- Google Cloud Platform Pricing Calculator
Fill in your information and the calculator will generate a report that summarizes your potential costs.
The Costs For Migrating To The Cloud
Migrating data to the Cloud also incurs costs. CSPs charge for moving data into their systems. Plus, you must calculate the labor costs you’ll incur migrating your data.
Ask your IT services company what they would charge to do this. They will ensure your data is correctly synchronized from your legacy software solutions. Cloud migration can be difficult, and having the right expertise and knowledge is essential.
If you continue to use your legacy applications during and after the cloud migration, your IT company will ensure that the data in on-premise systems don’t get out of sync with the data in the Cloud. Every business will be different, but you will need to account for some amount of labor and money to make sure your data is in sync.
Costs For Testing & Integration
Not all applications can be migrated to the Cloud, such as ERP or legacy software that you’ve been using for a long time. Your IT company can help you integrate these solutions and test them to ensure they function with your cloud infrastructure. There will be costs for this that you should take into account.
Ongoing IT Consulting Costs
You may need IT Consulting Services from time to time to ensure everything is mapped correctly. And a consultant can help you determine what solutions are coming in a few years that you may want to take advantage of.
A consultant’s advice can be helpful in many ways. Whether you need to map out a strategic approach to technology, develop a cloud architecture, execute the migration or more, their knowledge across many industries and situations will save you money in the long run.
Is The Answer To Use A Combinations Of Both The Cloud And On-Premise Solutions?
At first, many are shocked when they calculate all these costs. While the Cloud does provide up-front cost savings, it can be more expensive over the long haul.
Because migrating to the Cloud can be more expensive than using on-premise solutions, it’s essential that you decide which applications or services make the most sense to move to the Cloud.
In our experience, most customers end up with a combination of on-premise and cloud-based applications. We expect the price of cloud services to come down over time, but for now, it’s vital that you work with your IT service provider to determine which solutions to keep onsite and which you should move to the Cloud.
Did you know that Outsource IT Solutions Group has reached the level of Microsoft Gold (and Silver) Small and Midmarket Cloud Solution Partner Competency? This means we can get great prices for you on Microsoft products. It also means that as new Microsoft products are released, you’ll be one of the first to know. We’ll inform you about any end-of-life dates or price changes. And, we can answer your difficult questions about any of Microsoft’s solutions and train your staff on how to use them.
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