It is not uncommon to migrate a cloud solution from one cloud provider to another. The business assessment that is done before decided to do such a migration with a direct impact on the financial and business areas is crucial.
Unfortunately, this kind of decision is taken in most of the cases based on personal preferences or in fast response to an incident (e.g. slow response of an open ticket).
The migration analyzes of the impact from business, technical, financial, and long term vision is complex. In this post, I present an initial exercise that can be done to measure the impact on such a migration that offers a financial score.
There are 8 main factors that impact the migration cost:
(1) Cloud Services Integration: The impact and effort to update the application layer to be able to communicate with the SDK and API of the new cloud provider (e.g. migration from AWS S2 to Azure Blob Storage).
(2) Component rewrite: Sometimes there are no 1:1 match cross-cloud services. It means that to be able to support the same functionality you will need to rewrite or change the current implementation (e.g. SSIS package cannot run as-is inside AWS and you need to rewrite it for AWS Glue).
Learning curve / Peope skills: The current team might not have knoeledge related to the new cloud provider, so you will need to suport the cost of learning or adding/rotateing the team members. When you get new people in the team, you lose business knoledge.
(3) Cloud running cost: The running cost of the current cloud provider until the end of the current version life-cycle compared in comparison with the cost of the new cloud provider.
Resource reservation: If you already have done a resource reservation for 1 or 3 years, you cannot step back so easily. You will have some costs generated by it.
(4) Management and Operation cost: The cost of M&A on both cloud providers, taking into account that you might have extra costs generated by the learning curve or you need to hire new people. Additional to this the set of tools that you use might change also.
(5) IaaC and Automation: The cost of creating cloud resources in the new cloud provider they are not to be ignored. Even if you used Terraform, things will not go so smoothly as you expect.
(6) Testing and Quality Insurance: The system will need to be retested. Depending on how you have done the initial testing the effort might be higher or lower.
(7) Cloud Integration: Refers to the effort of integration of the new cloud provider with your current infrastructure (VPN, security, and so on). In most cases, we can assume that is low because you are not the first system that runs in the new cloud provider.
(8) Re-certification: By changing the cloud provider you need to recertify the solution to be compliant with specific compliance (e.g. HIPAA, PCI DSS).
From past experience, I can tell you that (1) Cloud Service Integration and (5) IaaC and Automation are the most expensive ones. Even with Terraform, changing the cloud platform is a pain, because in most of cases cross-cloud compatibility was not in the mind of the team. If you need to do (2) Component rewrite than you might have budget issues.
Now, let's take a look at a real-life example, to understand better the real impact on such a 'simple' migration.
| Factor | Impact | Cost | Comments |
| Cloud Services Integration | Storage, No-SQL | $15000 | |
| Component rewrite | No impact. | $0 | |
| Cloud running cost (current provider) | - | $48000/year | |
| Cloud running cost (new provider) | $30000/year | Special discounts from the cloud provider. | |
| Management and Operation cost (current provider) | - | $12000/year | |
| Management and Operation cost (new provider) | - | $12000/year $2000 (understand the solution) | The company already has people the competency on the new cloud provider |
| IaaC and Automation | Terraform | $20000 | Update the configuration and setup for the new cloud provider and environment recreation |
| Testing and Quality Insurance | $14000 | Running the automated test, and manually run the integration ones. Including updating the automated tests to look in new logs location. | |
| Cloud Integration | $0 | Already used. | |
| Re-certification | $0 | No certifications required |
The lifecycle of the application is 4 years, and the system has been running for 1 year already. If we do the calculation it means that:
- The total cost of staying on the current cloud provider for the next 3 years is $180000
- The total cost of migration to another cloud provider and running the solution for 3 years is $177000
As you can see the grand total difference between staying on the same cloud provider or doing a migration is under $4000 in 3 years. If we would already have a resource reservation that was paid upfront, the difference could be negative.
It is interesting to take a look at the initial implementation cost that was around $150000 with the migration cost $51000. The migration cost is around 30% of the initial implementation cost.
As we can see even if the running cost between the two cloud providers is around 35% less, the cost of migration to another cloud provider reduces drastically the cost benefits. This is why when you decide to migrate from one cloud provider to another, the main driver shall not be the cloud services cost.
In most cases, the migration effort cost is 30% to 40% of your initial implementation cost.
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