Find the Balance between Cloud Cost and Efficiency

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The rapid advancements in technology and the increasing need for flexibility, scalability and cost-effectiveness have led many organizations to consider migrating their on-premises data platforms to the cloud and embrace the power of cloud computing. The cloud can unlock countless benefits, such as enhanced security, flexibility and scalability.

However, as appealing as the advantages of the cloud may be, it’s crucial for businesses to devise and follow a migration strategically that helps avoid costs spiraling out of control. So, with an eye on cost-effectiveness, let’s see the key reasons for migrating to the cloud and the most common concerns related to it, before moving on to a cost comparison between on-premises and cloud environments and outlining a plan to measure the ROI of a cloud migration.

We’ll start by understanding why organizations want to migrate to the cloud in the first place:

1. Scalability: Cloud services provide the ability to scale resources up or down according to the organization’s needs, allowing businesses to efficiently manage fluctuating workloads without investing in additional hardware.
2. Cost-effectiveness: Cloud-based services help organizations reduce capital expenditures on hardware, software and maintenance and only pay for the resources they use, resulting in cost savings.
3. Flexibility: Cloud platforms promote quickly adapting to changing market conditions and responding to new opportunities, which makes the organization more agile and competitive.
4. Enhanced security: Cloud providers invest heavily in security measures to protect their clients’ data, offering a level of protection that many organizations cannot achieve in-house.
5. Improved disaster recovery: Cloud-native services offer better disaster recovery solutions, ensuring that data is safe and easily accessible in the event of an outage or a natural disaster.

These are strong arguments for migrating to the cloud, but there are still concerns that are still stopping organizations from going ahead with the move. Here are a few common ones:

1. Data security and privacy: Organizations sometimes worry about the safety and privacy of their data in the cloud, particularly when dealing with sensitive information.
2. Compliance: Businesses that operate in regulated industries may need extra assurance regarding their ability to meet specific regulatory requirements when moving to the cloud.
3. Downtime and latency: Some organizations have reservations about the potential for downtime or latency issues when accessing data stored in the cloud.
4. Vendor lock-in: Businesses may have concerns about being locked into a specific cloud provider’s ecosystem and the potential difficulty of migrating to another provider in the future.

All the above-mentioned points can be solved by proper planning and implementation of a cloud environment. There are a number of steps that organizations can take to minimize the chance of these concerns materializing. First, they can perform a thorough risk assessment before migrating to identify any potential risks and develop mitigation strategies. Second, they can ensure that their cloud provider has appropriate security certifications and audit reports to ensure that they comply with regulatory requirements. Third, organizations can negotiate service-level agreements (SLAs) with their cloud provider to ensure that they have the necessary uptime and performance guarantees. Fourth, they can implement redundancy and backup strategies to ensure that data and applications are always available. Finally, organizations can work with cloud providers that support open standards and APIs to ensure that they have the flexibility to move their data and applications between cloud providers if necessary.

The ROI of Cloud Migration

A best practice for measuring the ROI of cloud migration is to follow these steps:

1. Establish a baseline: Determine the current costs of operating your on-premises data platform, including hardware, software, maintenance and energy consumption.
2. Calculate the projected costs of the cloud solution: Include subscription fees, data storage, data transfer and any additional services.
3. Estimate the cost savings: Compare the costs of your on-premises solution to the projected costs of the cloud solution to determine the potential cost savings.
4. Consider additional benefits: Evaluate the intangible benefits of cloud migration, such as increased agility, enhanced security and improved disaster recovery.
5. Calculate the ROI: Divide the net benefits (cost savings and additional benefits) by the initial investment cost of the cloud migration to determine the ROI.

Here’s a handy table you can use as a starting point to compare actual cost and calculate the ROI.

By carefully assessing the costs and benefits of both on-premises and cloud solutions and calculating the ROI, organizations can make informed decisions that align with their business objectives. A successful cloud migration requires thorough planning, a keen eye on cost management and a focus on maximizing the value of the cloud ecosystem.

Embracing cloud computing can propel organizations into a future marked by increased efficiency and agility — but only if they navigate the migration process strategically. By leveraging the right tools, resources, and expertise, organizations can ensure a seamless transition to the cloud and ultimately unlock its full potential.

If you want to make sure you nail your migration to the cloud, we at Starschema are here to leverage our expertise in implementing cloud solutions for Fortune 500 companies and beyond to help you make the right choices and get the most value out of the big move.
Get in touch — we’d love to talk to you.

About the author

Anjan Banerjee is the Field CTO of Starschema. He has extensive experience in building data orchestration pipelines, designing multiple cloud-native solutions and solving business-critical problems for multinational companies. Anjan applies the concept of infrastructure as code as a means to increase the speed, consistency, and accuracy of cloud deployments. Connect with Anjan on LinkedIn.

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