my musings on technology

Cloud Migration: Establishment, Implementation and Professional Services Costs

Posted by on Nov 18, 2010 in Musings | 2 comments

Cloud Migration: Establishment, Implementation and Professional Services Costs

I am currently undertaking a project that is examining the validity and cost effectiveness of moving a 60 user company into the cloud.

I always chuckle when I read about people moving to the cloud because there are so many different definitions of what people consider ‘moving to the cloud’ so I think I should probably kick this post off by explaining exactly what I’m considering.

This project would take all servers and all applications (excluding voice) and move them into a managed data center facility.  The entire desktop experience would be run out of that managed facility in a true multi-tenanted model, with our users sharing the same managed hardware and applications as other company’s users.  The desktop would be a true SOE running Exchange, Office, AV and the MS CRM client delivered via a Citrix thin client.

To me, this is true cloud or utility computing.

I have been through a long and involved process to get to the point that I am confident the solution will work effectively for this company and that the cost savings will be significant (topic for another blog post) but I was hit with a large unexpected cost recently that I’m not sure is justifiable.

I’m talking about the ‘Establishment, Implementation and Professional Services Costs’.

While I can’t reveal what the monthly fees are for this Cloud service, let me just say they are significant for a company of this size – so this is not a small investment.   The initially proposed implementation costs came in at just under 4 months worth of the monthly recurring fees. Yes 4 months worth!  This really blew me away!

I guess I was under the impression that relocating to a cloud based facility would allow me to start costing IT as a known and flat monthly expense – no more massive spikes in costs due to new or upgraded servers or storage.  I think I also assumed that since we would be moving to a multi tenanted style facility that the provider would bear the costs of the implementation – or at least have those costs built into the monthly recurring costs.

The analogy of the power station keeps coming to mind when talking multi tenanted cloud computing.  Using this analogy, if you build a new house, the electricity company isn’t going to charge you 4 months worth of electricity bills just to hook it up to the grid!   There might be a nominal fee to get your account setup, but I’d expect it to be nominal.

When you sign up for Google Apps or Salesforce, there are no implementation costs – although you may need to pay a 3rd party integrator or provider to implement the software, but that would be a cost at your discretion.

Am I expecting too much here?  Are my thoughts on this way off?  To me, this is a barrier to entry and needs to be removed.

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