When organizations need to pivot to a different process or adopt different tools to enable more productivity, they can tend to leap into that new system without first conducting up-front research to determine its feasibility. This method of adoption is possible, but it can cause many decision-makers to pivot again after a few months once unforeseeable costs come to the forefront.
Take cloud adoption and virtualization, for example. In the early 2000s, companies like Google, Amazon, and Salesforce introduced web-based services to manage digital workloads and make computing more efficient. Quickly, companies adopted multi-cloud or hybrid cloud solutions to manage their businesses and protect their employees’ and clients' information.
Now the workforce is going through another revolution. Working from home is more common, many aspects of our day-to-day lives are digital, and companies have a greater need for the level of security and compliance that only private cloud infrastructures can offer. Why, then, has there been such a shift in recent years toward cloud repatriation? Read on to find out more about measuring cloud computing costs and building a cloud computing infrastructure that enables your team to work more efficiently.
Measuring Cloud Computing Costs Has Caused Many CIOs to Reconsider Their Cloud Solution
Early adopters have the benefit of being at the forefront of the latest technology and innovation. However, being an early adopter comes with its risks, and many CIOs and decision-makers who quickly merged their company’s processes and assets with the cloud are starting to measure their cloud computing costs and choosing to repatriate.
When cloud computing is costly, misuse is often to blame. Used incorrectly, cloud computing can seem to cost more, but planning the provision process and accurately configuring assets can correct this miscalculation. Most cloud providers deliver reports and suggestions to help administrators reduce costs.
Every major cloud provider uses calculators to estimate costs. Even after provisioning, watch your cloud usage and review configurations. Most cloud configurations can be adjusted to lower budgets and scale resources back.
What is TCO in Cloud Computing?
One of the first steps of building a cloud computing infrastructure is calculating the foreseeable costs of the move. To do so, decision-makers can use total cost of ownership (TCO) as a helpful metric to compare the cost of their current infrastructure to prospective costs of going hybrid or multi-cloud.
But what is TCO in cloud computing? And is it a useful tool for weighing the cost-effectiveness of application modernization? Total cost of ownership refers to the total associated costs of an asset. This includes purchase price, adaptation, and operation. In cloud computing, specifically, TCO refers to all of the associated costs of purchasing and operating a cloud technology.
Several factors make up TCO, including administration, capacity, consulting fees, infrastructure software, and integration. To properly calculate TCO, administrators must create a plan for migration and factor in the costs of maintaining the environment after the business relies on cloud resources.
Conducting a Cloud TCO Analysis & Determining ROI
Another important metric in cloud migration cost analysis is ROI, or return on investment. Many stakeholders and decision-makers may be familiar with ROI as a business term, but less familiar with the term in the context of cloud computing.
TCO measures ROI. After the initial investment, the cost savings should be greater than the costs of running the environment every month. Cost savings will be higher than the initial investment if the company runs with a lower budget than it did using on-premise resources.
An organization’s ROI is impacted by more than just the cost of infrastructure. It’s also impacted by performance, availability, scalability, and the human resources necessary to maintain it. For example, the costs of running cloud resources every month could be cheaper than on-premise costs, but slow systems reduce productivity and could cost more in constant bug fixing and troubleshooting.
Measuring the Risks of Cloud Repatriation
After conducting a TCO analysis on your cloud solution, you may realize that there’s room for improvement, or savings, in your cloud strategy. But repatriation, or shifting from a public cloud model to an on-premise private server, comes with its own host of risks and potential migration costs that CIOs and company leaders will need to assess in determining when to shift and when to stay.
Repatriation is the process of “reverse migration,” which means bringing data and applications back in-house. The costs of repatriation add strain to an IT budget, so migration back to on-premises infrastructure must be planned. Costs include the bandwidth required to migrate data and applications, the hardware necessary to support users and services, security tools, the personnel needed to support and maintain the resources, and any downtime costs. Administrators usually avoid repatriation unless it’s necessary due to the costs, training, and downtime associated with migration.
Security & Compliance Risks
One of the most popular reasons for building a cloud computing infrastructure on public platforms is security assurance and compliance. However, this solution may not continue to be feasible for smaller organizations as the cost of cloud services continues to rise. If cloud resources are not configured properly, data breaches can occur. Small organizations with few security resources may find that the risks associated with migration, including compliance regulations surrounding cloud-hosted data, outweigh the associated savings.
Consider Your Previous Cloud Migration Strategy
Your original cloud migration strategy will play a big role in determining the feasibility of repatriation. For instance, if your team migrated by replatforming, it may be too expensive or time consuming to move back on-prem. Conversely, if your organization took a more “lift-and-shift” approach, there may be an opportunity for you to shift back, if doing so won’t compromise security and compliance.
It’s not uncommon for organizations to try cloud migration with limited sample data and applications, and then later move more critical applications. The previous plan and migration process should be analyzed, and lessons learned should be carried into the next migration. This next migration should be smoother, with less downtime. With a test migration, a large overhaul of your system migrated to the cloud could potentially cost less.
Do any of these concerns resonate with you? Are you thinking about moving your workloads off the cloud? Come to our Deep Dive on cloud repatriation on January 20, 2022: