Three Ways Small and Medium Businesses Can Reduce IT Cost Barriers to the Cloud

Managing cloud migration project spending continues to be the most cited challenge that small to medium-sized businesses (SMBs) have encountered as scaling operational demands becomes increasingly vital to maintaining a competitive edge in the market. There are a number of ways to finance a cloud migration but for SMBs, finding the most cost-effective solution is often critical.

One way to achieve this is through hardware monetization, which can directly fund the migration while also providing a way to accelerate projects that may have stalled due to a lack of funding. There are a number of benefits to this approach, including the ability to:

• Directly finance your cloud migration project
• Accelerate your migration timeline
• Reduce your overall costs

Amazon Web Services and ReluTech, an AWS Select Partner, enabled Vistaprint to break free from their data center assets to cost-effectively migrate to the cloud. ReluTech helped Vistaprint not only save money on hardware support contracts during the migration, but also made it easier for them to consolidate their purchasing and contract management through elastic maintenance.

ReluTech assists Vistaprint migrate to AWS

Vistaprint, an online publishing company for small businesses, needed more flexibility to scale their IT environment up and down as business requirements fluctuated. It realized that migrating their on-premises data to AWS would address this issue and allow them to have greater control over capacity. However, Vistaprint faced the complication of simultaneously incurring migration costs and expenses associated with managing on-premises infrastructure.

Additionally, Vistaprint’s older hardware was nearing end of support. This prompted multiple vendors under different support contracts to pressure Vistaprint into a costly equipment refresh to retain each of their respective hardware maintenance services.

ReluTech helped Vistaprint alleviate these redundant costs by offering cash for its aging IT assets with its IT Asset Disposition (ITAD) services. This cash was then reallocated to Vistaprint’s digital transformation project and reduce its barrier to migrating data from their on-premises IT infrastructure to AWS.

The below sections review different steps to reduce IT cost barriers that can help SMBs with similar issues to Vistaprint, successfully migrate to the cloud in a cost-effective manner.

1. Conduct an IT asset audit and assessment

Hardware monetization involves selling your unused or underutilized data center hardware and then leasing it back from the buyer. This provides you with upfront cash that can be used to finance your cloud migration, while also reducing your overall costs since you are effectively leasing the hardware at a lower cost than if you were to purchase it outright. To begin the process, ReluTech, an IT asset disposition (ITAD) consultant, must be engaged for an audit.

The beginning of the auditing process involves either an on-site or remote assessment of all cloud-committed or otherwise retired hardware to ensure that absolute maximum value is recovered for all equipment. ReluTech will then provide a detailed inventory of all assets, including machine and serial numbers (for the business’s internal auditing purposes) to assess hardware valuations and fixed asset counts.

Once prices are negotiated for the cloud-committed or retired equipment, ReluTech can purchase the hardware, providing a cash infusion to bridge the financial gap in your cloud migration project. A unique service provided by ReluTech is the ability to provide asset purchase leaseback options during the duration of the cloud migration.

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2. Consider hardware asset purchase and leaseback options

As hardware becomes increasingly expensive and difficult to support, many businesses are looking for ways to reduce their hardware costs. One option that is gaining popularity is hardware asset purchase leaseback. In this arrangement, ReluTech purchases the hardware of the SMB and then leases it back to them for a monthly fee. The key advantage of this arrangement is that it allows the company to lower its upfront costs and spread its payments out over time. By receiving the cash for the hardware, an SMB is capable of directly alleviating the initial costs directly associated with beginning the cloud migration process.

This can be especially helpful for companies that are in the planning stages of their cloud migration, as it can help to make the transition more cost-effective. In addition, hardware asset purchase leasebacks typically come with flexible SLAs (service level agreements), which can give companies greater control over their IT budget. As a result, hardware asset purchase leasebacks are becoming an increasingly popular option for companies looking to reduce their hardware costs.

3. Switch to elastic maintenance hardware support

Elastic maintenance, offered by ReluTech on AWS Marketplace, functions as a cost-effective alternative to the original equipment manufacturer (OEM) maintenance agreement. The OEM’s maintenance would have SMBs continuing to pay for expensive hardware maintenance contracts or being forced to refresh equipment with ending support life, that could cost hundreds of thousands of dollars in IT spending.

Elastic maintenance allows ReluTech to take over maintenance of aging hardware support contracts on a flexible service level agreement (SLA), on average 50 – 70 percent less than with the original support package and mirror the same support as the OEM. This means that if a customer had multiple vendor contracts in place for their server, storage, network devices, ReluTech could consolidate all of those contracts under one support agreement at a substantial cost reduction.

An additional cost-saving advantage of elastic maintenance support is the availability of genuine parts and legacy hardware technicians that can keep SMBs’ end-of-life (EOL) or end-of-service-life (EOSL) hardware online as long as necessary for the migration. EOL refers to when the manufacturer no longer sells the server, storage, or network device on the market, while EOSL indicates discontinued support for the hardware.

With an insufficient strategy, Gartner estimates cloud migrations can take up to 24 months to complete, not only to plan and fill the skill gap needed to facilitate the project, but also to configure servers and applications to the new cloud environment. The cost of the “double bubble” can be avoided by extending the life of EOL or EOSL assets.

“Double bubble” describes the cost that businesses incur during a cloud migration because they have to pay both the direct cost of the migration and the full cost of maintaining the legacy cloud-committed infrastructure. To alleviate the double bubble, businesses can avoid the unnecessary expenditure by co-terming and consolidating the various OEM maintenance contracts under one agreement, costing a fraction of the original support. This is all possible under an elastic maintenance service model.

Next steps

By monetizing on-premises data center hardware to bridge the financial gap in cloud projects and embracing purchase leaseback, SMBs can achieve a faster and more cost-effective cloud migration strategy. Additionally, elastic maintenance can extend the service life of legacy hardware outside of the manufacturer’s support.

When migrating to the cloud, SMBs can avoid long-term, costly maintenance renewals and refreshes of EOSL hardware, saving potentially thousands in IT costs. Any company can navigate the often-complex world of cloud migration by carefully planning and seeking the right guidance.

If you’re an SMB looking for a cost-effective way to finance your cloud migration, consider using your on-premises data center hardware as leverage and engage an elastic maintenance provider like ReluTech, an AWS Select Partner, to help reduce IT spending during your cloud migration process. You can also learn more if you’re new to the concept of cloud migration with AWS Smart Business. Using the right strategy, you can ease the financial burden and work toward a successful cloud transition.

Disclaimer: The content and opinions in this post are those of the third-party author and AWS is not responsible for the content or accuracy of this post.