Insights • 4 minutes read

How to build a robust business case for public cloud

Learn the top three considerations when doing the sums on moving to Microsoft Azure.

Published on

June 25, 2021

The cost-benefit of moving to public cloud

There are plenty of benefits from moving suitable workloads to public cloud: flexibility, scalability, availability and resilience among them.

Reducing capital expenditure and operational expenditure should be right up there too. However, unless you carefully assess the true costs of on-premises or private cloud infrastructure, cost savings might not be immediately apparent.

Here are three important considerations in building a positive business case for migration.

1. Total cost of ownership of legacy infrastructure

Calculating total cost of ownership over, say, three years, is a complex process. Just comparing the costs of owning compute and storage equipment versus renting it on a pay-for-use basis is deceptive. One common mistake is not considering the ’soft’ costs around operating a data centre environment.

To get an accurate assessment of what it really costs to own your own infrastructure you must consider not just the physical hardware but the electricity that runs and cools it, the real estate it occupies. Add in the costs of the infrastructure containing it – racks, UPS, cabling and cooling systems. Backup is another considerable cost – storage arrays, tape systems and off-site tape storage. And then there’s the cost of maintenance contracts on all of the above… And that’s before you start estimating the human cost of ICT operations.

Another hard-to-calculate factor is the true cost of downtime. The fact is, many organisations never recover lost data or revenues from system failure – not to mention brand reputation. Azure provides built-in resiliency and back-up systems which effectively take system failures out of the equation – offering significantly better recovery point objectives (RPO) and recovery time objectives (RTO) than you could afford to build into your own on-premises infrastructure.

2. The human cost of operations

Too many IT teams put significantly more effort into keeping their legacy technology working than on innovating for business advantage. Offloading the effort to specialists who can expertly manage a public cloud environment like Azure makes good commercial sense.

There has been a massive shift to the cloud over the past decade. Virtual Machines (VMs) are now losing favour with technologies including PaaS, containers and native web services, giving you the ability to not have to patch or update systems – it’s all done by your cloud service provider.

This results in less time spent provisioning, configuring, monitoring and management effort required of your people.

Key insight Research suggests that IT staff spend around 80% of their time doing these mundane tasks. This means moving from a tactical to a strategic approach and – importantly – a focus on new initiatives offering competitive differences.

3. Leverage your software investment

One advantage of the Azure public cloud is that you can take advantage of investments you’ve already made in on-prem software such as the Windows Operating System, Windows Server and SQL Server. Public clouds typically charge for compute power plus use of software licences per minute. However, if you have already paid for eligible software assurance benefits under your current licensing agreement, you can apply Azure Hybrid Use Benefits (AHUB) to your virtual machines and some database services.

Using AHUB you can reduce the operating cost of a VM by not having to pay for the licenses.

.Further savings can also be made by implementing reserved instances. You can reduce the overall running cost of a virtual machine or storage account, but committing to either a one-year or three-year reservation of that compute or storage capacity. This coupled with AHUB could see an overall reduction of 82% in running costs of a VM.

How we help

Having managed Australia’s largest private cloud for over a decade – and with extensive experience of public cloud environments – we’re well placed to assist you.

From business case development to ongoing cloud management services, our cloud experts have the deep experience necessary for you to experience the full benefits of cloud.

We’ve developed rigorous methodologies for every phase of cloud migration – from assessments of the resources you want to move and strategies for achieving migration through to post-migration audits and optimisation services. Learn more about our various Azure services and how our experts can help you today, no matter where you are in your cloud journey.