How To Maximize Your ROI With Cloud Migration 

Businesses often transition to the cloud, aiming to mitigate the substantial expenses linked to maintaining on-premises infrastructure. However, many fail to realize the anticipated savings and, in reality, incur significant losses due to overspending in the cloud. Our managed cloud services tackle this challenge head-on, ensuring streamlined cost management and optimization. 

According to Flexera’s State of the Cloud Report, approximately 30% of cloud expenditures go to waste, accounting for a staggering $180 million in cloud-related overspending. Furthermore, a study by Gartner found that 70% of organizations exceed their cloud budgets by an average of 23%. This indicates that the vast majority of businesses are struggling to manage their cloud costs effectively. 

When organizations confront escalating costs, they resort to reactive cost-management tactics. Although these might offer temporary relief, they often fall short in comprehensively addressing and resolving the intricate business issues linked to cloud overspending. 

To unlock substantial ROI from the shift to the cloud, companies must craft a robust cloud strategy harmonized with their business objectives. Amid migrating applications, data, and systems to the cloud, a comprehensive reevaluation of associated processes becomes imperative. Neglecting this aspect introduces process-related inefficiencies, consequently elevating operational expenses. The evolution into the cloud is an ongoing journey demanding continual adjustments along the way. 

What Is Cloud Migration? 

Cloud migration refers to the transfer of your business data, applications, and IT resources from an on-premises computing setup to the cloud. This intricate process generally includes various phases, such as planning, evaluation, testing, and implementation. Employing specialized tools and services may also become necessary to facilitate a seamless and effective shift to the cloud environment. 

The Importance of Embracing the Cloud 

Recognizing the indispensability of cloud migration stands as the initial stride toward evaluating its ROI. Here’s why modern enterprises find cloud migration indispensable:  

Scalability and Flexibility:  

The cloud presents unmatched scalability and flexibility. Enterprises can seamlessly adjust resource allocation in response to demand, eliminating the need for overprovisioning to accommodate peak workloads. Whether expanding for a product launch or downsizing during off-peak hours, the cloud dynamically caters to real-time business demands. 

Versatility:  

Cloud services present a spectrum of solutions, spanning from data storage to intricate machine learning algorithms. This diverse array allows businesses to craft a tailored cloud environment, catering to specific requirements, be it data analytics, customer relationship management, or diverse needs in between. 

Enhanced Security: 

In the modern digital sphere, prioritizing security remains of utmost importance. Cloud providers allocate substantial resources toward fortifying security protocols, safeguarding data against breaches and cyber risks. Transitioning to the cloud frequently entails harnessing these formidable security measures, instilling confidence by ensuring data storage in a secure environment subject to continuous vigilance. 

Cost-Efficiency:  

A significant driving force behind transitioning to the cloud lies in the prospect of cost reduction. Conventional on-premises infrastructure entails substantial initial capital outlays and continual maintenance expenses. In contrast, cloud services function on a pay-as-you-go framework, empowering businesses to fine-tune their expenditure. Cloud usage entails payments solely for utilized resources, liberating capital for diverse investment avenues. 

Competitive Advantage: 

Harnessing cloud technology offers a substantial competitive advantage. Enterprises that embrace cloud migration attain heightened agility, swiftly adjusting to market shifts and customer requirements. This agility empowers them to expedite the introduction of novel products and services, securing a competitive edge within their respective industries. 

As per a McKinsey report, companies embracing cloud migration witness remarkable enhancements in operational efficiency and customer engagement. This compelling evidence alone underscores the compelling rationale for businesses to migrate to the cloud. 

Ways to Maximize Business ROI from Cloud Migration 

While the potential advantages of migrating to the cloud are substantial, businesses must adopt a strategic approach to optimize ROI. Careful preparation and execution guarantee a seamless transition. The following steps contribute to this procedure: 

Step #1 – Define Objectives:  

According to a study, 84% of organizations that clearly define their cloud migration goals experience a successful cloud migration. 

Before starting the journey into the cloud, it’s crucial to define clear objectives and business goals for the migration process. Identify applications to transition to the cloud in stages rather than opting for a complete lift-and-shift. Assessing application and process gaps in advance ensures adequate budgeting for necessary modifications. 

Step #2 – Consider Cloud Environment:  

A cloud-agnostic environment grants flexibility, allowing applications to be portable across vendors. Although it shields businesses from pricing fluctuations due to vendor lock-in, there might be higher initial expenses in constructing applications. Conversely, a cloud-native environment tied to a vendor initially proves cost-effective, enhancing application efficiency but potentially leading to vendor lock-in. To optimize ROI, most companies are adopting an architectural approach aligned with business requirements. 

Step #3 – Develop Cloud Capability:  

Gartner found that organizations that invest in training and certifications for their IT staff experience a 25% reduction in cloud migration costs. 

To facilitate cost-effective migration, appoint an owner to spearhead the cloud transition. Implement a cloud governance framework to manage deployment. Ensure the team receives adequate training and certifications. Set standards and delineate work environments for teams to plan workloads and storage. 

Step #4 – Ensure Cloud Compatibility:  

Existing applications and systems designed for on-premises architecture may face potential downtime and unforeseen costs when directly migrated to the cloud without optimization. Transforming applications into cloud-native forms helps organizations achieve a 30% reduction in cloud migration costs.  

Step #5 – Create a Cloud Roadmap:  

As per IDC, a strategic approach is vital for successful cloud transformation that aligns with perceived business value. Establish a product roadmap prioritizing requests based on customer needs. Revamp internal processes to prevent infrastructure teams from being inundated with ad hoc application change requests that may not align with customer requirements. 

Step #6 – Understand Licensing:  

Cloud expenses can escalate if the cost of licensed software running on the cloud platform isn’t considered. Some cloud providers’ enterprise agreements may not encompass licenses for specific software used on their platform, affecting costs. 

Step #7 – Optimize Storage:  

Unlimited storage in cloud solutions can incur hefty expenses. Employing cloud data management tools for efficient data archiving and management can control storage usage and save up to 50% on cloud storage costs. Unnoticed outbound data transfer expenses can significantly impact budgets. 

Step #8 – Budget for Compliance and Security:  

A study by Accenture found that organizations that underestimate their cloud compliance and security costs can overspend by up to 20%. 

While cloud providers implement security measures, additional investments in data security and compliance management are often necessary. Collaborating with cloud providers for shared responsibility in data protection and compliance mitigates potential issues later on. 

Step #9 – Optimize Resource Utilization:  

Tracking and analyzing cloud asset utilization is critical for cost-effective management. Monitoring tools provide visibility into cloud expenditure and resource usage. Accurate resource tagging prevents redundant spending, and automated identification of inactive resources eliminates unnecessary costs. 

Step #10 – Plan Resource Procurement:  

Analyzing cloud utilization rates aids in decision-making, for instance, procurement. In-depth analysis is essential to achieve cost savings by accurately understanding the computing power and memory requirements for each application. Cloud management tools assist in right-sizing instances and minimizing dormant resources. 

Final Thoughts 

Businesses often overspend on cloud computing without realizing a significant return on investment. Investing in cloud management platforms helps plan, monitor, and optimize cloud spending, crafting a cost-optimized cloud strategy. 

Meticulous planning and execution ensure a seamless transition, yet merely ‘lifting and shifting’ workloads to the cloud mirror the on-premise setup, hindering the potential of cloud migration. Employing strategic tactics, such as smart purchasing, long-term planning, and fostering a culture of collective involvement in cloud cost management, can significantly improve cloud ROI and regain control over cloud spending. 

With the right strategy, you can position your business among the selected few that fully leverage the potential of this continually advancing technology.  

For more insights on Cloud management or migration, keep following our blog or get in touch with Verticiti’s cloud experts to get the best advice for your business.