Cloud migration is a major undertaking for your business - one that can transform how you operate and generate many benefits, but also create costs that you'll need to account for.
This is a big consideration for a huge number of organizations all over the world. Gartner research has shown that more than 70% of companies have now migrated some of their workloads to the public cloud, and this proportion is likely to increase in the future.
Gartner also highlighted the common financial risks associated with cloud migration. It's predicted that, by 2024, 60% of infrastructure and operations leaders will experience public cloud cost overruns.
To protect your business from similar issues, make sure you're prepared for the possible financial implications of cloud migration before starting the process.
An important first step is to calculate the costs of your existing on-premises infrastructure and then assess how this compares to the cloud.
This isn't a straightforward comparison, owing to the fact that on-site and cloud computing have different cost models: Capex and Opex, respectively. Purchasing hardware is a significant upfront investment for your business (Capex), while licensing IaaS-based virtual resources and SaaS cloud services is an ongoing, regular expense (Opex).
You can compare the two options by taking the upfront cost of your on-premises IT assets and dividing them by the total amount of time you can realistically expect to use them.
Depending on the details of the migration and the approach you're taking, transferring data and applications to the cloud can be a complex process that demands specific skills and knowledge to get the best outcomes.
You'll need to give careful thought to the capabilities required to manage your cloud migration, and whether they can be accessed within your current workforce. If not, you'll have to account for the costs of acquiring these competencies, whether it's through permanent recruitment or temporary hiring.
The financial impact of this will depend on the availability of the skills you need and how many people are required. If you need to create an entire DevOps team to build your cloud infrastructure, for example, the costs are likely to be substantial.