Innovative and fast cloud services are crucial to digital transformation initiatives. Whilst there is no textbook model on how to adopt these services, it is nonetheless vital for companies to integrate them as fully optimised services in order to control their ROI.
In the process of adopting cloud services, a business may find they have not made the expected substantial savings from this transformation. This can be a major disappointment and the question of why this is, must be asked.
According to Gartner’s
Can You Save Money Migrating to Cloud IaaS?, 64% of companies hope to make drastic savings by migrating to a public cloud service. However, the actual average savings amount to just 16%. However, we hear of companies that have played their cards right and managed to make 50% savings – how do they do it? Below we an answer to this thorny question.
Hopes for cloud migration
With a 3-year investment plan and replaceable servers, classic IT management models are now unable to efficiently meet the needs of skilled professionals. Cloud services, which offer flexibility and pay-as-you-go options, are being presented as the best solution for operational and financial savings.
In terms of operations, the cloud offers the possibility of allocating resources on demand, of increasing agility in terms of time to market, and of all-round better service availability. It also helps to facilitate administration and supervision.
From a financial viewpoint, these different factors will result in cost reductions: costs only applied to resources that will be used effectively; the company will be freed from the restrictions of obsolete equipment or replacing out-of-date equipment.
Preparing for migration: the business case as an initial key step in a FinOps procedure
Cloud migration involves a paradigm shift, both in terms of operations and finances. It also requires a considerable amount of preparation if it is to deliver.
The move from a fundamentally fixed-price model with generally easy to predict pricing, to one based on upgradeable and disposable micro-components (CPU resources, memory, storage, services, etc.) requires a solid adaptation of a company’s processes, skills, and tools.
Analysis should focus on the following points:
- The company’s strategy: targets and skills development; international outlook; and, operating restrictions (data-centre closure, regulations, etc.).
- Inventory and audit of existing equipment (IT, applications, data) enabling the business to collate accurate documentation on resources used, their dependence, and any agreed investments.
- Finally, analysing these data and establishing a detailed business case with guidelines, will allow businesses to estimate not only the advantages and profits of cloud migration, but also any financial savings and the necessary actions to achieve them.
So, how do you begin? Firstly, designate applications in a migration pathway without forgetting to challenge organisations and take advantage of any leverage. This first phase offers a chance to explore the best migration scenarios, for instance by:
- choosing between SaaS, private, hybrid or public cloud applications,
- taking back control over the range of activities in Shadow IT,
- modernising certain applications or by decommissioning others.
This exercise will then involve selecting your option to refine these ideas in terms of finances. A FinOps consultant, with solid architecture skills and knowledge of Cloud Service Provider (CSP) pricing schemes, will be a real asset. Measuring real usage, planning developments, taking advantage of optimisation recommendations through Cloud Cost Management (CCM) tools, will help to drastically reduce the risk of uncontrolled and unmanaged expenses.
Initiating FinOps
Now that the different scenarios have been assessed and your roadmap has been approved, what next? It is essential to establish and distribute a FinOps procedure to the teams responsible for the applications in question as soon as the migration process has started. Once the FinOps team has been created, its first task will be to formalise a governance framework by sharing architectures, cloud services and skill-sets, as much as possible, and by defining and spreading good practice. This step will also require a Cloud Cost Management service. Depending on the need, if using CSP tools or specialist providers, you will have to bear in mind any future developments that may need to be covered.
New investment capacities for your innovative projects
Benefiting from new investment capacities through a cloud migration plan is one of the most important motivations for businesses; but it is vital to plan and establish suitable governance. Savings can be spread out over time, providing that these practices are maintained throughout the RUN phrase, and particularly through continued business optimisation.