Migrating On-Premise Application to the Cloud
I am sitting at my desk after leaving our leadership meeting where we discussed many key initiatives for the following quarter. My boss, the CEO has instructed me to lower our overall SGA within my area (Information Technology). As I sit at my desk and ponder some ideas, I remember reading some articles about the labor and capital expense savings by migrating key applications to the cloud, specifically ERP applications. As I start to search the web for some key information, I quickly become overwhelmed with all of the content related to “cloud” and savings. The amount of content and trying to decipher what is real and what is sales related was overwhelming and daunting. This event occurred over a year ago and we have since migrated our ERP (PeopleSoft) application to the cloud. I committed to write an article that simply outlines the project and the items to consider before jumping into such a project. This article will outline:
Criteria to determine if Cloud Migration is viable:
- Identify your current costs – internal labor costs, hardware costs as well as software licensing
- Determine if the application you plan on moving has any restriction to running in the cloud (Licenses, Technology limitations, etc…)
- Ensure the Cloud you move to will have the ability to verify “Usage” as well as SLA and downtime compensation
- Does the Cloud solution offer you the same or better DR (disaster recovery)?
- Data Location (Will the location of the data violate any internal policies?)
In addition to the key points above, it is very important for the organization to consider prior to migrating any application to the cloud is determining the KPI’s(Key Performance Indicators) for how to measure successful criteria. Some of these KPI’s are Hardware and Labor Cost Savings, Performance, and application maintenance. These KPIs can be used not just for the initial migration but to benchmark the criteria, one month, one quarter, or even one year after the migration. Data points are always valuable, especially when you are asked the question, what were the benefits of migrating these applications to the cloud?
Identify your current internal labor costs:
Current application and infrastructure costs, which include the direct and indirect costs of using and maintaining your application can be difficult and very expensive. The direct costs cover hardware and software (including physical servers), software licenses, maintenance contracts, warranties, supplies, material, spare parts, network bandwidth, storage and database capacity, all labor, and facilities. The indirect costs include loss of revenue and productivity resulting from any outages or downtime. This step is essential to fully understand the business case for cloud adoption and make an apples-to-apples cost comparison. These indirect costs are harder to quantify but creating a way to measure these will help you and the organization as more and more applications get migrated to the cloud.
Determine if the application you plan on moving has any restriction to running in the cloud:
Not all applications within your enterprise are candidates for cloud migration. Some of these applications have software licensing limitations, like that of the Oracle Database Engine. Oracle certifies certain cloud providers with the hosting and licensing certifications. For example Amazon (AWS), Microsoft (Azure), Rackspace, and Oracle (OCI) are all Oracle Database certified cloud providers, regardless of BYOL (Bring your Own License) or if you purchase your license from one of these providers. The inverse of this is hosting a BYOL within CenturyLink which is not a certified OracleDatabase Cloud hosting provider. It is very important to validate and confirm the Cloud provider you are migrating to is certified to host and run the applications you are considering prior to moving them. Not all cloud provider allows customers to bring their own license (BYOL), some require the purchase of their subscription for key pieces of software. The cost of license violations is much more costly after the fact than spending the time to ensure you are not violating and license agreements.
Ensure your cloud provider has the ability to verify, usage performance, and uptime SLA with downtime compensation
Most cloud providers today have the ability to measure usage of resources (CPU, Disk, Memory, Network) in order to determine billing and reporting. In our experience of finding the right cloud provider, it was clear that the top tier-1 cloud providers all had the ability to measure usage and each provider had their own unique industry-standard SLA’s with downtime credits and compensation. The tier-one providers are:
- Microsoft Azure
- Oracle (OCI)
We found the ability to measure and report the usage allowed us to script streamline the days, hours, and times certain applications were up and running. This permitted us to take full advantage of bringing applications off-line when not needed, hence saving us a great deal of cost each month. This exercise took a few months to perfect as well as striking a balance of what applications needed to be available during what periods of time. The cost savings for us was reduced by over 35% annually.
Does the Cloud solution offer you the same or better DR (Disaster Recovery)?
Disaster recovery is something every organization requires, especially for their tier-1 applications. The cost for an organization to design, maintain, test, and support disaster recovery is great. This cost is driven from the design of ensuring three areas of Disaster Recovery are achieved as well as the labor cost to test and maintain this structure:
Data Location (Will the location of the data violate any internal policies?)
While security remains top of mind of most CIO’s and CEO’s, the location of data is rising in prominence as a barrier or concern for cloud adoption. These concerns stem in part from the difficulty of visibility into data transit and storage. Customers might want to know where exactly their data is residing so they can retrieve it quickly —and also for legal implications, which we’ll get into momentarily. With many clouds, because of the way cloud storage works, data might be spread over several servers or storage arrays, and even between multiple data center facilities. This makes it hard for even the provider to identify exactly where data is stored. But while transparent, cloud service providers might be forthcoming with their infrastructure design details and maintain their security through a strong web of compliance standards and data security best practices, there remain legal entanglements to the storage of data in the cloud. Some organizations have internal data policies in conjunction to legislation the restricts certain data to cross international borders. Some of these policies have large financial penalties if data privacy and data locations are violated. The best way to ensure your data is not in violation of internal policies or international Laws is to locate your data containers in specific regions(Locations). This can be controlled in all of the tier-1 cloud providers. Data Location (Will the location of the data violate any internal policies?)As your organization goes through the rationale of considering the migration of applications to the cloud, I would suggest speaking to peers who have undergone this exercise as well as an organization that specializes in these types of projects. I wrote this article in conjunction with our partner Momentum Solutionz who helped us with the project. Many organizations do not put enough stock in the benefits of working with an organization that brings experience to the table, like in golf. I would prefer to have my playing partner putt before me so I can see the speed and break of the greens, which allows me to have a better chance of being successful with my putt. Momentum Solutionzspecializes in advising and assisting organizations with their journey to the cloud, we can generally reduce project time and cost by 35% by leveraging our been-there-done-it experience. Please sign up for a more detailed conversation and allow us to assist you and your organization with this journey.