Your Ultimate Guide on the Cost of Migrating To a Private Cloud
The size of IT infrastructures continues to grow along with the increasing digitalization of all company workflows in any industry. This stark reality means that you need to run all your applications and store all that information somewhere. This is where cloud computing comes in. Businesses can choose from a private cloud or a public cloud.
Private cloud infrastructure is generally perceived as costly due to the consultative element and ongoing management costs. Despite public cloud seeming the far more cost-effective option on the surface, there is a tipping point where a private cloud solution can be a less expensive option for businesses.
What’s a Private Cloud?
A private cloud (also known as an internal cloud or a corporate cloud) is a type of cloud architecture that is dedicated to a single business or organization rather than the general public and, at the same time, ensures that those organizations are sufficiently isolated from each other. It’s an isolated and secure environment made up of resources pooled from multiple servers using virtualization.
Measuring Total Cost Ownership
The total cost of ownership in cloud computing refers to the total cost of adopting, operating, and provisioning cloud infrastructure. However, estimating the TCO of private cloud infrastructure — an inherently dynamic ecosystem — can be challenging. You have to quantify the resources, assets, and utility charges it takes to run your cloud environment and track factors such as utilities, bandwidth, storage, software licenses, human labor, support costs, maintenance, auditing and compliance, and downtime or outages.
- Audit your current IT infrastructure costs: A thorough understanding of your current operations is imperative, and an infrastructure audit is the first thing you should do. The audit will reveal what you’re currently paying to run IT and what your new cloud environment might look like. This information will help you better understand the cost of cloud resources your infrastructure is likely to consume. Consider the total cost of using and maintaining your on-premise IT investment over time, not just what you pay for infrastructure. This includes the cost of physical servers, software licenses, maintenance contracts, warranties, supplies, equipment, and spare parts.
- Calculate your estimated cloud infrastructure costs: Once you have figured out the cost of your existing IT infrastructure, you will need to calculate the average cost of using and maintaining your applications in the cloud environment. Your private cloud solutions provider will most likely have a cost calculator that gives an accurate calculation of the cost of migrating to a private cloud based on your specific requirements.
- Calculate the cost of cloud migration: Lastly, you need to estimate the cost of executing the cloud migration process. The volume of data and the number of servers, integration and app testing, and consultation fees will mainly determine the cost of the migration process.
- Utilization, efficiency, and management of private cloud resources: Generally speaking, if an organization can achieve about 400 virtual machines under management per engineer, then a private cloud can be a more attractive financial option than a public cloud. And if the infrastructure is only used to about 50% of its capacity, then it requires a cloud administrator to manage up to 1,000 VMs each to achieve a TCO advantage. There’s also the aspect of a fully managed private cloud which, depending on the skill level and the number of IT employees, can alleviate the company’s spending on six-figure salaries.
- Workloads: There are four basic types of workloads: linear, seasonal, stable, and unpredictable. The larger the number of virtual machines running, the more predictable a workload is. Stable, flat workloads are cheaper on a private cloud over a fixed term, while variable workloads are likely to reduce costs in a public cloud or on-demand cloud model.
- Compliance: The private cloud may be the only realistic option to ensure regulatory compliance for highly regulated industries. For example, HIPAA requires that electronically protected health information is created, received, stored, and transmitted in a way that ensures its confidentiality, integrity, and availability.
Benefits of Migrating to a Private Cloud
In addition to cost savings, migrating to a private cloud also brings a myriad of other benefits. While a key benefit of private cloud computing is the realization of hard cost savings, these softer benefits are also strong reasons to consider a move to the private cloud.
- Enhanced security: It’s no secret that the private cloud is secure. It runs on specific physical machines, which makes its physical security easier to ensure. Cloud access is also more secure in a private cloud environment because it is accessed through private and secure network links rather than the public Internet.
- Customization: The private cloud is entirely customizable to fit your business’s specific needs – you can choose an infrastructure with specific storage and networking characteristics or add new features or applications that are unique to your organization.
- Compliance: A private cloud is an ideal option for businesses with compliance concerns, as it can be deployed per any retention and access-control policies.
- Improved resource utilization: Centralized applications, just-in-time hardware provisioning, and prioritized workloads can drive high utilization.
- Enhanced control: With the private cloud, you have control over what you view, use and share with others. If it’s part of your business, you control it.
- Increased efficiency: If your organization is focused on efficiency, then a private cloud might be the lower TCO option. Automation, homogeneous workloads, and outsourcing can drive labor efficiencies.
- Predictable costs: Because the private cloud is built for you, you’ll know upfront what the cost will be each month. You’ll be able to scale and budget according to the plan outlined in your cloud package.
Ready to Deploy a Private Cloud?
Cloud architectures are complex, and their costs need to be visualized as part of playing a longer game. For companies, desired business outcomes should ultimately determine the choice to migrate to a private cloud.
At Mathe Inc., we provide private cloud solutions that will help increase your efficiency and productivity without having to risk your data in a public cloud setting. It’s like having your own personal data center that is fully managed, easy to migrate to, and works on a simple and transparent pricing model. Our cloud management team will support and guide you through the migration process, ensuring that your private cloud strategy delivers on both your needs and budget. Contact us today to learn more or to schedule a free consultation.
With over 35 years in the business of supporting and implementing technology for the SME market, and 6 years previously in Corporate IT and Voice. I have seen a great deal of change. The only common thread is I have always focused on the Business Wise application of Technology. We always try to look 5 years ahead of the current technology to make sure our clients are on the right track to meet current and future needs.