Why Move to the Cloud

At some point, most technology decision-makers ask themselves, “Should we move data and computation to the cloud—and when?” Here are some of the top reasons why organizations switch to cloud computing:

1. Cost Savings: Cloud services eliminate the need for expensive on-premises hardware and infrastructure. In a cloud model, companies pay only for the resources they use.
2. Scalability and Flexibility: Companies can easily scale their cloud resources up or down in response to changing demands.
3. Improved Collaboration: Distributed teams can more easily communicate and share files in the cloud. Employees can access and edit documents in real-time from anywhere.
4. Enhanced Security: Major cloud providers often provide more robust security technologies than individual companies would implement on their own.
5. Disaster Recovery: Cloud backups and redundancy provide a strong layer of protection against data loss and downtime. Companies can ensure their data will be safe and accessible during a disaster or system failure.
6. Access to Advanced Technologies: Cloud platforms give businesses access to emerging technologies such as AI, machine learning and big data analytics without the need to build out the infrastructure in-house.
7. Automatic Updates: Cloud providers handle software updates and maintenance, which can help companies reduce their IT workload while ensuring their systems are always up to date.
8. Faster Deployment: Companies can roll out new applications and services much more quickly in the cloud than with on-premises systems.
9. Environmental Sustainability: Cloud data centers are often more energy efficient than their on-premises counterparts, which can help reduce a company’s environmental impact.
10. Global Reach and Expansion: Cloud services make it easier for businesses to expand into new geographic markets quickly without planning and implementing an IT infrastructure.
11. Improved Customer Experiences: Cloud-based solutions can help companies deliver faster, more responsive customer service. They’re also well suited to support omnichannel customer experiences in which shoppers see consistent branding across all channels.
12. Better Resource Utilization: Cloud computing allows businesses to use their IT resources more efficiently, paying only for what they use and adjusting capacity seamlessly.
13. Enhanced Mobility: Through cloud services, employees can access data and applications from anywhere with an internet connection. These capabilities help companies support remote work and Bring Your Own Device (BYOD) policies, which can give them an edge in attracting and retaining key talent.
14. Competitive Advantage: The agility and innovation capabilities of cloud solutions can help businesses stay ahead of their competitors and respond quickly to market changes.

As explained above, there are many reasons why companies migrate to the cloud. The top reason is to reduce costs. This cost efficiency plays out across several dimensions:

• Reduced Capital Expenditure: Cloud migration eliminates the need for companies to invest heavily upfront in hardware and infrastructure, such as servers, storage devices and networking equipment.
• Pay-As-You-Go Model: As businesses consume cloud services, they pay only for the resources they use. With on-premises systems, companies may pay upfront for hardware they rarely or never end up using. The pay-as-you-go model also shifts IT costs from capital to operational expenditures, which can streamline bookkeeping for some companies.
• Lower IT Costs: Companies that use on-premises IT systems must maintain and upgrade them. They also incur expenses for power, cooling and physical space. Cloud providers handle maintenance and upgrades for their customers, relieving them of a significant cost.
• Cost-Effective Scalability: With cloud services, companies can quickly scale their resources up and down and pay only for what they consume. There’s no need to make a major financial investment every time resource usage spikes.
• No End-of-Life Concerns: When on-premises hardware reaches end of life, businesses face potentially costly decisions about migrating data and processes to new systems. Cloud customers generally avoid these expenses.

Despite the many benefits companies have reaped from cloud solutions, there are downsides. Here are some of the challenges businesses are most likely to encounter in their cloud migrations:

• Downtime and Service Disruptions: Cloud services rely on internet connectivity. Internet outages can disrupt business operations and lead to financial losses.
• Security and Privacy Concerns: Storing sensitive data with third-party cloud providers introduces the risk of data breaches.
• Limited Control and Flexibility: Organizations sometimes have less control over their infrastructure in the cloud than they would with on-premises solutions. They may also face limitations on customization.
• Vendor Lock-In: Due to proprietary technologies and data migration challenges, it can be difficult and costly to change cloud providers.
• Cost Concerns: Although many companies migrate to the cloud hoping for cost savings, they sometimes encounter hidden or unexpected costs once they get there. Businesses with high data transfer needs or long-term cloud usage are especially vulnerable to these expenses.
• Performance Issues: Depending on the quality of the cloud provider’s infrastructure and the strength of the internet connection, specific applications may experience latency or performance degradation in the cloud.
• Data Access and Migration Challenges: Moving large amounts of data to and from the cloud can be costly and time-consuming.
• Compliance and Regulatory Issues: Some companies are subject to industry regulations that make it difficult to justify storing data in the cloud, especially if data centers are located in different countries.
• Lack of Visibility and Control Over Infrastructure: Businesses may lack the degree of insight they want into the underlying systems and security measures of their cloud provider.
• Possible Overprovisioning: With physical infrastructure, companies often purchase more resources than they need. It’s possible to repeat this mistake in the cloud by not estimating usage carefully.

Not all data is saved in the cloud. Although the use of cloud storage services is increasing, businesses still store much of their data locally. According to one source, about 60% of all corporate data is now stored in the cloud, up from 30% in 2015. But in a surprising trend, the percentage of employee and customer data stored in the cloud dropped from 50% in 2019 to 44% in 2022. Meanwhile, in the same period, there was an increase in the amount of corporate financial information, intellectual property and protected health information stored in the cloud.

Several factors can influence a company’s strategy for storing data in the cloud. Companies normally weigh the cost of providing cloud storage versus local storage based on the number of employees who need access to the data and the amount of data they are likely to generate. Security and regulatory compliance requirements may make some companies reluctant to store sensitive data in the cloud. Some companies have specific performance needs that will be easier to support with local storage. And businesses that rely heavily on legacy systems may find that their key solutions aren’t cloud-compatible.

Migrating to the cloud is a big decision for organizations. But they don’t have to move all their business processes and systems at once. In fact, many cloud migration methods allow companies to start experiencing the benefits of the cloud on a small scale and then increase their usage over time.

Here are some of the most common ways of migrating to the cloud:

• In a data center migration, a company moves data and applications from its on-premises servers to a cloud provider's servers.
• Hybrid cloud migration involves moving some resources to the cloud while keeping others on-premises.
• In a cloud-to-cloud migration, a business transfers resources between different cloud platforms or providers.
• When organizations move specific workloads such as Linux, SAP, SQL Server, Windows Server or mainframe systems to the cloud, this is called an application, database or mainframe migration.
• A rehost ("lift and shift") migration involves moving applications to the cloud with minimal changes. When a company moves applications to the cloud with some optimizations to help it work better in the cloud, that’s a replatform ("lift and reshape") migration.
• In a refactor/re-architect migration, a company redesigns applications to use cloud-native features more fully.
• When a business buys a cloud-based SaaS solution to replace one of its existing applications, it’s called a repurchase ("drop and shop") migration.
• A retain migration involves keeping certain applications on-premises while migrating others to the cloud, while a retire migration is about decommissioning applications that the business no longer needs.
• In a relocate (“hypervisor-level lift and shift”) migration, a company moves a collection of servers from an on-premises platform to a cloud version of the same platform.

Regardless of which cloud migration method an organization chooses to use, the transition will require careful planning. The degree of planning needed may vary based on the project’s scope. Here are the key steps in building a cloud migration strategy:

1. Assess and Plan: Companies can start by creating a detailed inventory of the current infrastructure and identifying business objectives for the cloud migration. Any plan should include security and compliance requirements as well as any necessary team training.
2. Select a Cloud Service Provider: This decision typically revolves around the quality of offerings, security, support and compliance, as well as cost.
3. Design the New Cloud Architecture: In this step, the business maps its infrastructure needs and plans a security setup to protect those components using encryption, firewalls and access management.
4. Plan the Migration: The migration plan should stipulate an order for migrating applications and data and selecting specific migration strategies, such as lift-and-shift or refactoring. It’s helpful to include strategies for minimizing the downtime of business systems during the transition.
5. Execute the Migration: To ensure a smooth process, the migration should happen in phases, beginning with less-critical systems. The migration team will monitor the process closely and implement security measures as needed.
6. Test and Optimize: After the migration, the team will thoroughly test all migrated applications and data. They’ll look for ways to optimize cloud systems for cost and performance and set up monitoring and maintenance processes that keep systems running smoothly.
7. Review and Iterate: With the cloud infrastructure up and running, the business can now evaluate whether the migration met its objectives. Based on its findings, it can refine its strategy for future migrations or optimizations.

Cloud migration timelines can vary significantly based on the scale and complexity of each project. A small-scale project, such as moving a single server or a few applications, may only take a week or two. Migrating email systems and digital assets may require two to four months.

A large-scale project—for example, migrating an entire data center or complex enterprise applications—could take six months to two years. One way to estimate a cloud migration timeline is to break down the time needed at each stage. For example, a company might project:

1. Assess, plan and choose a cloud provider: 3 weeks
2. Design the architecture: 3 weeks
3. Plan the migration: 2 weeks
4. Execute the migration: 6-8 weeks
5. Test and optimize: 3 weeks
6. Review and iterate: 3 weeks

Based on these estimates, a typical medium-sized project would take about 22 weeks to complete.

Just as cloud migration timelines vary based on the amount of data being moved, the project's complexity and other factors, cloud migration costs can also vary widely between projects. It’s possible to migrate smaller workloads for as little as $5,000, while large, complex workloads could require 100 times that amount.

When projecting the costs of a cloud migration, it’s essential to consider direct costs such as cloud service provider fees, network connectivity increases and labor. But there could also be indirect costs if system outages hinder employee productivity or slow, unreliable online experiences spur customer dissatisfaction. By working with experienced partners and using the estimation tools cloud providers offer, companies can head into their migrations with a realistic idea of what they’ll need to spend to reap the benefits of the cloud.

Deltek builds scalable software and information solutions to grow and adapt with your company, enabling you to achieve and consistently maintain superior levels of project intelligence, management and collaboration. With Deltek’s cloud platform, you get the benefit of improved performance, increased security, faster access to new features and reduced costs.

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