What is the real cost of Cloud Migration?

“Migrating to the cloud” has been an industry trend for well over a decade, many of the tech evangelist predictions of cloud computing have exceeded expectations in many areas but have also fallen short in others. In this article I will shine a light on the full cost of migrating to the cloud vs the opportunity cost (if any) of staying put.

Artificial Intelligence, despite dominating the current tech narrative, is ensuring the trend to large-scale cloud platforms like AWS, Azure and Google Cloud remains strong. In the US, the market is projected to grow at over 21% compound annual growth rate (CAGR) from this year through to 2034 – details HERE. Following the wider trend, what’s preventing from some users from pulling the trigger, or incur much higher migration costs than anticipated?

Unexpected costs and “Hidden” charges

A poorly executed or rushed cloud migration can fail to mitigate the full operational costs of running an on premises estate within the cloud. Often overlooked liabilities:
•Data transfer fees: Costs for moving large datasets to and from the cloud. Egress charges make the bulk of transaction costs, but cloud platforms have offline and secure solutions for migrating large datasets to the cloud (Azure Import/Export Service, DataBox or AWS Snowball)
•Training costs: Expenses for upskilling staff to use new cloud systems.
•Downtime costs: Revenue loss from operational disruptions during migration.
•Uptime costs: additional costs like failing to budget the provision IaaS resources in availability sets to meet expected/required uptime SLAs
•Overprovision of resources: an expert agent led assessment will ensure a combination of VM rightsizing, uptime/downtime optimising, reserved instances and cost effective storage solutions.
•Failure to adapt: it’s tempting to continue to run IaaS instances in the cloud as you would do on premises, however PaaS and SaaS solutions in Azure be far more cost effective with lower operational investment. On premises applications can be assessed, tested and adapted to use cheaper and more reliable solutions through serverless alternatives.
•Consultant fees: Hiring experts to do the work and run POCs
•Security compliance: Investments in meeting regulatory standards
•Support requirements: Customer SLA requirements are critical to factor in supporting the estate post migration
•Ongoing maintenance: Regular updates, monitoring, and management costs.
•Licensing fees: Additional software licenses for cloud environments.
•Egress charges: Fees for transferring data out of the cloud.
•Security and compliance gaps: requiring costly remediation
•Storage overage costs: Unexpected expenses from exceeding storage limits.
•Integration costs: Expenses for integrating legacy systems with cloud platforms.
•Not taking advantage of vendor incentives: Vendors like Microsoft incentivise prospective customers via their accredited partner ecosystem to fund POCs, physical migrations, training and technical expertise. Licensing incentives with extended security updates are available for SQL and Windows on Azure and can push the current OS lifecycle a further and securely where required.
•Lack of a FinOps strategy – unallocated costs through tagging, overprovisioning of resources, inability to identify underused or idle resources for downsizing or termination; effective tagging ensures transparency and enables proactive cost control.

Mitigation

Engage with a partner such as Cybit early so the project can be thoroughly planned in line with business objectives. Each stage in the process follows the Cloud Adoption Framework, a comprehensive step-by-step industry standard guidance to strategically plan, securely deploy and efficiently operate cloud solutions in line with business ROI expectations.

The following processes enable a partner to position the correct cloud solution, apply for vendor collaboration/funding and run a cloud readiness assessment. A thorough report outlying the full migration costs, risks, process and ongoing optimisation in line with business ROI expectations:

•Define Clear Objectives and SLAs Upfront: Start by outlining business goals, such as cost savings targets or performance metrics, and incorporate them into Service Level Agreements (SLAs). This ensures alignment and accountability, preventing scope creep and hidden costs.
•Conduct a Thorough Pre-Migration Assessment: Work with the MSP to audit current infrastructure, identify workloads suitable for migration, and model costs accurately. Use tools for simulations to forecast expenses like storage overages or integration fees, avoiding surprises. A report will highlight cost savings moving to Azure through strategic leveraging of the most applicable cloud service for your specific needs highlighting the opportunity costs of staying put.
•Implement Robust Tagging and Cost Allocation Strategies: Collaborate on a tagging framework from day one, categorising resources by team, project, or environment. This enables precise tracking, identifies inefficiencies, and supports chargeback models to curb sprawl and overprovisioning.
•Foster Cross-Team Collaboration and Ownership: Encourage joint FinOps practices where both parties share real-time data on usage and costs. Assign ownership for monitoring, with the MSP providing dashboards for visibility, ensuring decisions are data-driven and timely.
•Prioritise Security, Compliance, and Training: Integrate risk assessments for compliance costs, and have your migration partner provision staff training to minimise adaptation expenses. Tailor specific security policies from the ground up before migrating to avoid generic approaches that could lead to vulnerabilities or extra fees post migration.
•Establish Ongoing Optimisation and Review Cycles: Set up regular audits with the MSP to review spending, optimise resources (e.g., rightsizing instances), and adjust for changes. This includes leveraging automation for maintenance and egress management to sustain long-term savings.