AWS Public Sector Blog

Is your on-premises data center weighing you down? Accelerate your cloud journey with these cost-savings strategies

Data center with employee monitoring at end of hallway

Organizations strive to effectively serve their citizens, communities, and constituents—work that has become even more complex and challenging in these uncertain times. State and local governments across the nation are facing decreased revenues and tighter budgets. In fact, state budget shortfalls in the United States due to the economic impact of COVID-19 are expected to reach a cumulative total of $555 billion by the end of fiscal year 2022. That means less funding for public services and large capital expenditures.

Many public sector customers who face these challenges are finding solutions by migrating to the cloud. Whether it is a state agency’s call center or unemployment insurance benefits portal, the underlying IT infrastructure needs to be highly available, secure, scalable, and cost-effective. With flexible, pay-as-you-go pricing, Amazon Web Services (AWS) can help organizations transform and modernize their IT environment.

When considering a move to the cloud, many organizations struggle with a common problem: the migration bubble. This bubble is formed when organizations are covering expenses for their current on-premises infrastructure while incurring new costs for a cloud migration. But what if you could use that legacy hardware to your advantage? These cost-savings strategies can help free up budget resources and accelerate your journey to the cloud:

  1. Outsource IT maintenance. Many organizations are unaware that there are less expensive alternatives to contracts offered by Original Equipment Manufacturers (OEMs). Third-party IT maintenance providers can offer comprehensive maintenance services at a fraction of what OEMs typically charge, often resulting in a 50-70 percent cost savings.
  2. Avoid costly IT refreshes. During a data center migration, you may encounter OEM hardware refresh cycles or a component failure, which would normally require you to purchase new IT equipment from the OEM before your cloud migration is complete. These types of one-off purchases can be costly and can lock you into a long-term contract with the OEM. You can avoid this by purchasing or leasing certified systems or parts through a third-party provider, often saving you up to 90 percent off of the equivalent OEM prices.
  3. Look at purchase/lease-back programs. You can also leverage a third-party provider in a purchase/lease-back program. The technology provider will perform a complete IT environment assessment to evaluate your current hardware assets, including all servers, storage, and networking equipment. The provider will then offer to purchase the IT assets at the current fair market value, which you can then lease back for the duration of your cloud migration. After successfully completing the cloud migration, the third-party provider securely disposes of the on-premises hardware, so you don’t need to wait for a long-term IT maintenance contract to expire.

AWS partnered with ReluTech, a technology provider in the AWS Partner Network (APN), to create the Migration Bubble Buster Strategy (MBBS). MBBS incorporates these cost-savings strategies to help customers move to the cloud as quickly and cost-effectively as possible. Contact your local AWS account manager today to learn more.

Learn more about the cloud for state and local government.

Morgan Reed

Morgan Reed

Morgan Reed is an executive government advisor at Amazon Web Services (AWS). He coaches state and local government executives through strategy, policy, and governance challenges to help them accelerate their journey to the cloud, and help governments innovate for their customers. Prior to AWS, Morgan spent nearly four years as chief information officer for the State of Arizona, where he led cloud transformations to consolidate 30 different email systems, modernize 15 citizen-facing applications, migrate critical agency workloads off the state-owned mainframe, and shut down the state’s largest data center after migrating 80 percent to the cloud.