AWS Public Sector Blog

Cloud economics: The value of a TCO assessment

Considerations when planning a cloud migration.

Word cloud that represents considerations when planning a cloud migration.

Whether you’re beginning to think about migrating to the Amazon Web Services (AWS) Cloud or already planning your migration, you probably have questions such as how much migrating to the cloud will cost.

Determining total cost of ownership (TCO) for a cloud migration project can be challenging when evaluating what-if scenarios, over-provisioning, outdated servers, legacy applications, or spreadsheets of stale data. There are many indirect and difficult to calculate costs such as downtime and lack of productivity. It also requires finding time to dive into your IT Infrastructure to figure out what’s going on and if you need everything you have.

To avoid spending more time on this project, many organizations simply lift and shift all of their assets to the cloud. The issue with the lift-and-shift strategy is it will likely increase your TCO, which defeats one of the main reasons for migrating to the cloud – saving money.

Rightsizing before migrating

When migrating to AWS, many organizations fail to consider the benefits of rightsizing before migrating their workloads. If your infrastructure is in the cloud and you have rightsized your assets properly, the resources you need for peak utilization will be there when needed. And you do not have to pay for more resources than you need. For this reason, a TCO analysis is essential for a successful cloud migration.

Running a TCO analysis on your assets (physical machines, servers, labor, storage, software licenses, and data centers) is vital to understanding what you’re paying for your current IT infrastructure and how that translates into the pricing for a cloud environment.

Migrating to the cloud without making a migration plan can actually increase your monthly spending. It is never a good thing to receive a bill that’s higher than you’ve budgeted, but a TCO assessment can help prevent this from happening.

AWS TCO options

Some organizations prefer third-party justification in building their business case for an AWS migration.

TSO Logic, an Amazon company, provides accurate data-driven analysis of TCO and cost modeling for your ideal future state. TSO Logic’s software ingests millions of data points from your current environment, including age, generation, and configuration of all hardware and software, in addition to each instance’s historical utilization. TSO Logic’s predictive analytics provide insights on an ongoing basis you are running each application in the best place with the right software and at the lowest TCO—even as your environment, cloud options, and prices change. TSO Logic will help you build a clear business case to accelerate your migration planning.

While TSO Logic’s solutions are ideal for large migrations, CloudChomp’s tools can help customers with mid-sized and smaller cloud migrations. CloudChomp, a cloud migration tools company and a member of the AWS Partner Network (APN), provides options that are connected to the AWS Pricing API, so your results are accurate and up to date with your live data and AWS pricing. CloudChomp analyzed over 400 billion data points to help show customers how to save on average 41% over traditional lift and shift strategies.

Some CloudChomp tools that can help customers better address their TCO include:

  • CC Analyzer: CloudChomp’s CC Analyzer is a collaborative, dynamic data warehouse and planning tool for re-hosting, re-platforming, and re-architecting on-premises assets to run on AWS. It helps customers identify and mitigate financial risk, while helping customers create their roadmap to AWS. The CloudChomp CC Analyzer is customizable, allowing customers to see current industry standards and change assumptions to match their organization’s situation, filter data, and tag data to map different pricing scenarios.
  • CC Analyzer’s 1ClickTCO™: CC Analyzer’s 1ClickTCO™ provides an agent-less, expert-level AWS pricing estimate based on infrastructure and performance statistics and in-app license manager for Microsoft SQL Server and Windows licenses to assist with license migration planning, application discovery, dependency mapping, and a statement of work (SOW) calculator. A built-in license planner can help you view your options with legacy applications and decide how you would like to handle them moving forward in the cloud. Among CC Analyzer’s portfolio of TCO analysis tools is a SOW calculator, which enables you to understand your TCO and calculate your up-front migration costs.

Learn more about these AWS TCO options in the Optimizing AWS Cloud Costs & Lowering Total Cost of Ownership ebook.

41% savings over traditional lift and shift

On average, CC Analyzer helped customers achieve a 41% cost savings over traditional lift-and-shift strategies. CloudChomp can help you decide what to re-platform, re-architect, re-host, or retire. They also provide the tools you need to plan your migration efficiently and successfully.

Everyone involved in the migration project can have access to data with customized assumptions and have the ability to model different pricing scenarios within the portal, creating a collaborative platform to further migration planning success.

TCO assessments can be complicated and sometimes problematic, but they don’t have to be if you have the right tools. AWS and CloudChomp are dedicated to supporting customers’ cloud journeys and empowering them to maximize value from their investments, improving cost predictability, and creating a culture of ownership.

To learn more about these solutions visit the new Cost Optimization Help Center or check out this blog post on best practices for cloud cost optimization on AWS.

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