Creating a realistic cloud migration cost estimate is essential for keeping your IT budget on track.  Get it right and you’ll get your cloud migration journey off to a great start.  Get it wrong and your finance team could wind up losing sleep over how to balance their books and your colleagues might not be thrilled about seeing “non-essentials” being pulled out of their budgets to compensate for your mistake.

Fortunately, it is possible to create a realistic cloud migration cost estimate.  Here are some tips to  help.

Remember that a cloud migration cost estimate is only as good as the underlying data

This general principle holds true of any estimate, but it’s so important, it’s worth emphasizing.  Basically the difference between an “estimate” and a guess is the amount of research which goes into coming up with the figures.  In theory, overestimating costs can appear less risky than underestimating them but this is actually a debatable point, because it could lead you to avoid taking an action which would actually have saved you money.

It’s a good idea to start by comparing running costs and then move on to cloud migration costs

On the principle of “trust but verify”, it’s generally a good idea to start by checking that a cloud migration would actually reduce costs for you (or result in some other benefit which would justify the increased cost).  While this is likely to be true the vast majority of the time, there may be the occasional exception and there may also be the occasional time when it might be more sensible to delay a cloud implementation.  For example, if you’re planning an office move anyway, you might just want to live with what you have for now and then move everything at once.

When calculating the cost of running your current IT infrastructure, do your best to include indirect costs (such as lost revenue caused by downtime) as well as direct costs (basically anything related to hardware, software and network connectivity, including the costs of the humans involved in keeping them running).  This relates back to the first point.  You need to do everything possible to gather full and accurate data.

On that note, you should be aware that the likes of the AWS price calculator and the Azure TCO calculator are sales tools rather than finance tools, so it’s a good idea to double-check any assumptions they make and see how they apply to you.

Estimating cloud migration costs

Assuming that you’re happy you could save money (or gain some other benefit) be using cloud services, you can then move on to calculating the costs of the actual migration itself.  These are not factored into the pricing calculators offered by the main cloud services so the onus is on you to figure them out for yourself.  While many of the points you need to cover will be fairly obvious, especially if you’re doing a lift-and-shift migration, here are three points you might overlook.

You will probably need to keep data synchronized during the transition period

Even in a lift-and-shift migration, you do not just press a button and have everything transfer over.  Unless you can do your entire cloud migration out of hours, you are probably going to need to keep the data live in your legacy systems until you are ready to “flick the switch” and turn them off and when you do turn them off, you’re going to have to ensure that the data in your new cloud systems is an absolutely exact match of the data in your old systems.  This means that you probably want to budget for skilled labor to make this happen.

Your apps will need to be thoroughly tested before you switch off your legacy systems

Thanks to virtual machines and containers, you can run just about any app on cloud infrastructure.  You may, however, have to make adjustments to them to make them run properly.  What this means in practice is that your intended lift-and-shift migration might turn into a refactoring migration (where you make some adjustments to apps before you migrate them) and/or might require some urgent development work to make legacy apps run in the cloud at all.  Basically, always budget plenty of time and money for thorough testing.

Hiring consultants can make life a lot easier for everyone

It’s highly unlikely that people who provide in-house IT services are going to be specialists in cloud migrations.  Even if they’ve done one (or more) before, perhaps in previous roles, they’re just not going to have the same sort of skill, experience and general competence which comes with regular practice.  Hiring consultants can, therefore, be money well spent.  Not only can they make your life easier, they can stop you from making costly mistakes and guide you towards getting the best value from your cloud migration.