Feb 24, 2021
You already know not to compare “apples to oranges” when looking at the costs of cloud computing versus traditional on-premises architecture. What you might not recognize, however, are all the hidden costs your data center has been incurring all along. To consider a complete total cost of ownership (TCO) for either approach requires stepping back to gain a broader view.
A more accurate analogy for this kind of comparison is “orchards to orchards.” Why? Because you are looking at the entirety of the enterprise, not just at a product (the “fruit”) or even an operating unit (the “tree”). This level of analysis exposes the hidden costs of on-premises systems which, once accounted for, reveal a much more accurate cost comparison between data centers and cloud computing.
Tangible Hidden Costs
Organizations often tend to focus on the tangible equipment costs and end up ignoring other expenses related to their on-premises environments. Hidden costs of the on-premises model include functions traditionally presumed to be unavoidable, such as:
- Real estate costs;
- Facilities management (utility costs for power, cooling, physical security);
- Hardware and software costs, networking, licensing, and warranties;
- Administration, support, technical staff and maintenance; and
- Security, Compliance and Disaster Recovery/Business Continuity.
Intangible Costs
Intangible costs, such as barriers to innovation and development, are even harder to account for. In our first post, we talked about freeing your technical professionals from the endless cycle of updates and troubleshooting to focus, instead, on building more effectively around organizational goals. Recognizing that your current structure might be limiting opportunity, especially when you are accustomed to the way you’ve been operating, can require some real soul-searching.
The bottom line is that cloud allows you to run code that provides direct value – without having to worry about everything required to make that code run. And as you alleviate the burden of traditional IT functions and structure, you gain massive capabilities in scalability, flexibility and security. Migrating to the cloud is not simply a “move,” then, but a fundamental change to the way you do business. Once you recognize how different the framework of utilizing the cloud can look, you are much better suited to make an all-encompassing calculation that factors in your operations, your infrastructure and your workforce.
Now that you’ve determined the holistic total cost of ownership between your current system and the cloud, it’s time to start planning your migration. In our next blog post, we’ll discuss the importance of including all stakeholders in your planning conversation to save time – and money: AWS Cloud Migration: Thinking Beyond the Price Tag
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Learn more:
AWS Cloud Migration: Thinking Beyond the Price Tag
Cloud Transformation
