The financial case for moving to the Cloud

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As mentioned in our recent blog, there is a common misconception that Server apps are generally cheaper than their Cloud-based counterparts. The problem with this view is people tend to ignore all the iceberg-like hidden costs associated with maintaining and running an on-premise server environment. We have also heard from customers and partners that the potential cost of migration is their primary concern since hearing the big news.

When considering the economic case for a migration to Cloud, customers should first consider the Total Cost of Ownership of their current on-premise environment, including all the hidden costs associated with it. These can include the following, which should be carefully quantified:

Maintaining a physical server room(s)

Servers are big, bulky pieces of hardware that require a dedicated space for the units themselves and all the associated paraphernalia. These rooms also typically require 24x7 cooling which, depending on the location, can get expensive quickly. And electricity isn’t getting any cheaper, either.

Maintaining the servers themselves

Complicated pieces of hi-tech equipment can and do go wrong. Maintaining them so they operate reliably and efficiently is no small task. What’s more, the sheer and growing volume of data that companies are required to move around these days means constantly upgrading storage capacity. Rapid release cycles in today’s environment also demand constant updates to software and firmware. All this maintenance costs money.

Support Staff

On a related note, servers don’t look after themselves, so most companies employ a team of support staff, or outsource support to a third party. Either way, you’re paying good money to maintain an environment which a Cloud deployment would immediately return to your coffers.

Licensing administration challenges

Keeping on top of multiple licensing agreements across all your applications can be an administrative nightmare, with many companies simply over-licensing to ensure everyone who needs access to something has it. Cloud applications track usage in real-time, and admins can easily (and remotely) review and right-size subscriptions, as and when required.

The cost of downtime

Cloud applications can’t in all honesty guarantee 100% up-time. Atlassian, for instance, has a 99.95% guarantee, among the industry’s highest. That said, the cost to an organization of downtime with their self-owned on-premise environments can be brutal. In one survey from 2019, ITIC reported that a full third of respondents had the cost of just a single hour of downtime at over $1m. With Cloud apps, cutting edge technology, fail-safes and multiple points of failover mean downtime is extremely rare, and immediately addressed when it does happen. You can read more about Atlassian’s commitment to reliability here.

Related article: The benefits of Cloud computing: Why move to the Cloud?

On a final note, when considering the cost of a migration to Cloud and the true ROI, customers should be considering more than just the cost in the first year. Year one costs will include the migration itself, which will undoubtedly be expensive, depending on the size and complexity of the environment you’re migrating. But remember it’s a one-and-done cost, not a recurring cost. Also Cloud apps tend to be priced so savings begin to emerge two or three years in.

At Tempo, we’re committed to supporting all our customers, regardless of deployment option, and will continue to do so in line with Atlassian’s stated time frame. We’ve also created a handy Server Migration Guide, where customers will find all the latest information as they consider which path is best for them.

Server to cloud migration guide

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