By Insight Editor / 23 Sep 2016 / Topics: Microsoft Azure Cloud
This article introduces a series of cloud-related “tough questions, real answers” blogs. If you’re relatively new to the cloud, I suggest reading my Cloud Primer post, which includes a brief history of cloud computing, as well as a quick level set on cloud terminology. This “tough questions, real answers” series also refers frequently to another prerequisite post on the Top Reasons for Moving to the Cloud.
With those prereqs out of the way, let’s discuss our inaugural topic, which is one of the most common questions companies ask when considering a move to the cloud: Can we really save money in the cloud?
As (I hope) you read in my Top Reasons for Moving to the Cloud article the short answer is “yes, but it depends.” Here are some of the top cost savings available with cloud computing:
As you can see, you can definitely reduce costs in the cloud, as well as provide more value, quicker. It should come as no surprise that many clients ask, “How much will I save in the cloud?” Unfortunately, that’s not at all easy to answer. The honest and disappointing answer is, “It depends.”
First of all, how much cost are you saving from the various cloud benefits: paying as you go, scaling on demand, being more productive/agile and focusing your team on high-value work? It’s difficult to assign those a dollar value.
Secondly, what are your current infrastructure costs, precisely? Most likely, you only have a very rough guess. There’s the cost of hardware (servers, networking, etc.), your electric bill, your facility costs, your labor costs, your various licensing costs (e.g., operating systems and databases) and more. Not an easy answer. You can search online for various case studies comparing on-premise costs to cloud, and certainly some case studies document real savings. But there’s no guarantee those are representative of your situation. It would take a very thorough analysis of your on-premise and cloud costs to arrive at an accurate cost comparison.
Although it’s difficult to calculate your actual costs, it’s worth mentioning one common but less than optimal way to save money in the cloud: “lift and shift.” I’ve worked with several companies whose goal was to move to the cloud as quickly as possible, and with minimal effort. They wanted to migrate their on-premise infrastructure and applications to the cloud with minimal change.
No taking advantage of the various cloud benefits discussed, such as no standing up environments as needed and then shutting them down. No scaling up and down as needed. No consideration of the cloud’s overwhelming number of tools and services, particularly the Platform as a Service (PaaS) and Software as a Service (SaaS) services that can offer some great features and cost savings. They usually say they plan to take advantage of those options eventually, but I can’t recall any of my “lift and shift” clients actually following through on that yet.
Still, I really can’t fault them for lifting and shifting because, in fact, they do save money — a couple of them saved 40%, which is really awesome for the minimal effort. It’s just that if they followed some of the best practices mentioned here, they could save a lot more.
Now, for full disclosure, it’s important to note that taking advantage of the full power of the cloud does take some effort.
Yes, you can really save money in the cloud, especially if you take advantage of all the cloud has to offer, which takes some work. But even if you don’t leverage all the cloud has to offer, like with a “lift and shift” approach, you can still save money.
National Sr. Manager, Modern Cloud Practice, Insight
Vince has been an IT consultant for more than 26 years. He helps IT organizations across the U.S. improve their ability to deliver customer value via his expertise in DevOps, cloud enablement and application modernization. He loves building and fixing things and working with teams to achieve success.
