Your audit should give you a solid understanding of the network, storage and database capacity you need to run the applications you want to migrate to the cloud. 2) Calculate your estimated cloud infrastructure costsĪfter you’ve determined your current infrastructure costs, it’s now time to calculate your potential cloud infrastructure costs. Indirect costs can be difficult to estimate, but are very important to consider, as they can make up a significant portion of overall IT costs. Every company’s indirect cost situation will be different. If you can estimate revenue lost due to downtime, that should be included as well. To calculate these costs, you can review log files to determine how often your servers go down and for how long, and multiply that time by an average hourly rate. The largest indirect cost is the loss of productivity suffered by your employees and customers if your IT infrastructure goes down. Indirect costs, while more difficult to calculate, are just as important as direct costs. To estimate these administrative costs, you can interview key employees in those departments and check training logs to come up with the number of total hours spent, then multiply this total by an average hourly wage. Thus, these costs should be considered within the purview of the cloud migration. But the hiring, onboarding, training, and management of IT employees and external consultants can get expensive, and other departments are dedicating many resources to do so. You may consider these costs to be peripheral, as they may not hit your IT department’s balance sheet directly. These can include the resources from other departments in your organization - Human Resources, Procurement, Finance, to name a few - that are dedicated to managing your internal and external IT staff.
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Also, it will be important to identify the details of your infrastructure, such as the number of servers you use, types of databases you use and storage capacity. While you’re in data gathering mode, you should also figure out how much network bandwidth, storage, and database capacity you consume with your servers and other technology.
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LONG TERM COST OF USING CLOUD SERVICES FOR BUSINESS SOFTWARE
How much do you pay (or have you paid) for your physical servers, software licenses, maintenance contracts, warranties, supplies, material, spare parts, and anything else? All of these costs should be fully documented, and you can access them by having your accounting department pull invoices, purchase orders and payment records. The first bucket of direct costs include the hardware and software. Direct costs are relatively easy to calculate, as they directly hit your balance sheet.