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Shahbaz AlamAWS Professional Services

September 28, 2016

Breaking Down the Economics and

TCO of Migrating to AWS

What to expect….

• Understanding the components of a TCO model

• Defining the “Migration Bubble”

• Overview of the AWS Migration Methodology

• Application disposition options

• Migration level of effort

• Sample migration cost model

Disruption is much easier today than ever…

Hotels Trading Insurance Grocery delivery

DevicesMusicEvent TicketsTaxi

Responding requires a new model that enables…

Focusing on differentiating your company

Innovating at start-up like speed

Reducing risk

To do that, we must harness the power of…

Source: IDC, Quantifying the Business Value of Amazon Web Services (May, 2015)

Analysts have shown AWS reduces costs over

the long term

https://aws.amazon.com/resources/analyst-reports/IDC-business-

value-aws/

Customers want to make their datacenters

work with the cloud

???

Whiteboard engineering

Amazon EBS

Amazon RDS Amazon

ElastiCache

Amazon

Redshift

Amazon EC2 Elastic Load

Balancing

Building the Business Case…

Start by understanding your on-premises costs

It is important to accurately

understand your current costs

in order to know how to build

your migration model for

optimal cost efficiency

In the beginning . . .

…there was TCO

Total Cost of Ownership (TCO)

Definition: Comparative total cost of ownership analysis (acquisition

and operating costs) for running an infrastructure environment end-to-end

on-premises vs. on AWS.

Used for:

1) Comparing the costs of running an entire infrastructure environment or

specific workload on-premises or in a co-location facility vs. on AWS

2) Budgeting and building the business case for moving to AWS

Comparing TCO is not easy…

≠

TCO = Acquisition costs + Operations costs

Hardware—server, rack

chassis PDUs, Tor switches

(+maintenance)

Software—OS,

virtualization licenses

(+maintenance)

Facilities cost

Hardware—storage disks,

SAN/FC switchesStorage admin costs

Network hardware—LAN

switches, load balancer

bandwidth costsNetwork admin costs

Server admin virtualization admin4

The diagram doesn’t include every cost item. For example, software costs can include database, management, and middle-tier

software costs. Facilities cost can include costs associated with upgrades, maintenance, building security, taxes, and so on. IT

labor costs can include security admin and application admin costs.

Space Power Cooling

Facilities cost

Space Power Cooling

Facilities cost

Space Power Cooling

Server costs

Storage costs

Network costs

IT labor costs

1

2

3

illustrative

Questions to explore your existing footprint…

Operations

Utilization

Capacity

Planning

Optimization

• How do you plan for capacity?

• How many servers have you added in the past year? Anticipating next year?

• Can you switch your hardware on and off and only pay for what is used?

• What is your average server utilization?

• How much do you overprovision for peak load?

• Will you run out of data center space some time in the future?

• What was your last year power utility bill for the Data Center(s)?

• Have you budgeted for both average and peak power requirements?

• Are you on AWS today?

• Is your architecture cost-optimized (Auto Scaling, RIs, Spot, Instances turn on/off)?

1

2

3

4

And, make sure to…

Power/Cooling (compute, storage, shared network)

Data Center Administration (procurement, design, build, operate, network, security

personnel)

Rent/Real Estate (building deprecation, taxes)

Software (OS, virtualization licensing & maintenance)

RAW vs. USABLE storage capacity

Storage Redundancy (RAID penalty, OS penalty)

Storage Backup costs (tape, backup software)

Bandwidth, Network Gear & Redundancy (routers, VPN, WAN, etc.)

Consider

Understand Procurement Time, Resource sitting on self

Cost of Lost Customers

RTO, RPO

Resources to get you started

AWS TCO Calculator

https://awstcocalculator.com

Case studies and research

http://aws.amazon.com/economics/

Understanding Your Migration

Costs…

AWS Migration Cost Considerations

AWS Costs

• Compute

• Storage

• Networking

• Databases

3rd Party Costs

• Migration tools

• Storage vendors

• OS / application

Licensing

Labor

• Employees (FTE)

• Consultants

• Refactoring effort

• OS upgrade

• Database to

Amazon RDS

• Tools

Change Management

• Governance

• Operating model

• Training

• Processes /

Service mgmt.

Understand you have application challenges

Lack of accurate discovery tooling and processes

Lack of application context / information

Limited CMDB or similar data source available

Inaccurate data center costs

Lack of detail and scope with respect to operating model, governance / risk / compliance, security, software licensing, and related areas.

Indicators of potential operational practice maturity gaps within examined data sets

Increased

Cost

The Migration Bubble – Components

Planning and assessment Migration tools Consulting partners

Internal training Duplicate environments Lease penalties

The Migration BubbleC

ost

Time

Planning

Migration Bubble

Operation and

optimization

• Planning and assessment

• Duplicate environments

• Staff training

• Migration consulting

• 3rd party tooling

• Lease penalties

Application Migration Methodology

Strategy

• Assessment and Profiling

• Prioritization

• Data requirements and classification

• Business logic and Infrastructure dependencies

Design

• Detailed migration plan and effort

• Network topology

• Core infra services

• Security and risk assessment

• Prep on-preminfrastructure

Migrate

• Migrate

• Deploy

• Infrastructure integration

• Application integration

Transition

• Functional Validation

• Pilot testing

• Transition to support

• Release management

• Cutover and Decommission

Operations

• Staff Training

• Monitoring

• Incident management

• Provisioning

Improvement

• Monitoring-driven optimization

• Continuous Integration and Continuous Deployment

Plan RunMigrate

Application Migration AssessmentRe-hosting / Re-deploying

(Lift and Shift)

Re-architecting / Re-factoring

(Rewrite and decouple)

Application Optimization

Application Disposition – All Options

Discover,

Assess (Enterprise

Architecture and

Applications)

Lift and Shift

(Minimal

Change)

Migration and

UAT Testing Operate

Refactor

for AWS

Application

Lift and Shift

Move the App

Infrastructure

Plan Migration

and Sequencing

Determine

Migration Path

Decommission

Do Not Move

Design, Build AWS

Environment

Move the

Application

Determine

Migration

ProcessManually Move

App and Data

3rd Party Tools

AWS VM ImportRefactor

for AWS

Rebuild Application

Architecture

Vendor

S/PaaS

(if available)

3rd Party Migration Tool

Manually Move App and Data

Determine

Migration Process

Replatform

(typically legacy

applications)

Recode App

Components

Rearchitect

Application

Recode

Application

Architect AWS Environment

and Deploy App, Migrate Data

Signoff

Tuning Cutover

Org/Ops

Impact

Analysis

Identify

Ops Changes

Change

Management

Plan

Application Disposition – All Options

Discover,

Assess (Enterprise

Architecture and

Applications)

Lift and Shift

(Minimal

Change)

Migration and

UAT Testing Operate

Refactor

for AWS

Application

Lift and Shift

Move the App

Infrastructure

Plan Migration

and Sequencing

Determine

Migration Path

Decommission

Do Not Move

Design, Build AWS

Environment

Move the

Application

Determine

Migration

ProcessManually Move

App and Data

3rd Party Tools

AWS VM ImportRefactor

for AWS

Rebuild Application

Architecture

Vendor

S/PaaS

(if available)

3rd Party Migration Tool

Manually Move App and Data

Determine

Migration Process

Replatform

(typically legacy

applications)

Recode App

Components

Rearchitect

Application

Recode

Application

Architect AWS Environment

and Deploy App, Migrate Data

Signoff

Tuning Cutover

Org/Ops

Impact

Analysis

Identify

Ops Changes

Change

Management

Plan

Categorize Apps and Reduce Variables

Cloud Native

Just Do It!

(e.g. static website,

standalone server)

Business Risk

SaaS or IaaS

(e.g. email, CRM)

Technical Risk

Custom Business

Applications

(e.g. ERP, Financials)

Unfit for Cloud

Legacy App Zone

(kill or replace services)

Busin

ess F

it

Technical Fit / Effort

Key Migration Desc.

Instant / Quick Win

Roadmap Prioritization

Minimal Investment

Do Not Move

Application (Infrastructure) Migration Use Cases

• Non-production environment

• Non-critical workloads

• Sustain downtime / outageVM Conversion

• Production environment

• Non-critical workloads

• Sustain downtimeHost Cloning

• In place upgrade

• Sustain limited downtime

• Multi-tenant application environment to single tenantApp Containerization

• Production environment

• Critical workloads

• Low RTO and RPO (little to no downtime)Live Migration

• Database

• Data Warehouse

• Unstructured data objectsData Migration

AWS PS Application Migration Level of Effort

Very Low

Basic workload

Current/supported OS on AWS

No database

Few dependencies

Scheduled outage is OK

Low

Basic workload

No database

May require re-platforming (i.e. OS)

Scheduled outage is OK

Medium

Contains multiple components

No database

May require re-platforming (i.e. OS change / upgrade)

Outage with advance planning

Business impact possible for production servers

High

Multiple components including database

System may include greater than five disks

Limited downtime permitted

Production servers likely to impact business if unavailable for an extended period of time

Very High

Multiple components including database

Complex system configuration (e.g. numerous disks)

Contains several dependencies

Limited to No acceptable downtime

Requires advanced detailed assessment and planning

High-touch migration

2 – 4 hours 4 – 6 hours 6 – 8 hours 10 – 14 hours 20 – 24 hours

VM Conversion

Host Cloning

VM Conversion

Host Cloning

Live Migration

App

Containerization

Live Migration

App

Containerization

Mig

rati

on

Me

tho

d

Live Migration

App

Containerization

Speed and Process Decisions Change Migration

Costs

The cost of migration has

many levers that can be pulled

in order to speed up or slow

down the process. Each of

these has a corresponding

cost associated with it.

Let’s do a Sample Total Cost of

Migration (TCM) Exercise…

Total migration effort across 469 hosts

Sample Migration Effort Model

Cost model is based on a

enterprise migration of 469

workloads of varying complexities.

Mean migration effort across

hosts: 5.66 hours per host88

205

55

109

120

50

100

150

200

250

Very Low Low Medium High Very High

2 4 6 10 20

$1202 per server (average)

$153

$849

$200

2656 hours @$150/hr avg

250 hours @$287.50 avg

Total cost of migration = $563,738

Average Cost To Migrate Each Server

Determining the Migration Bubble Payback Period

(i.e., Break-even)

On-prem (3 yr) AWS (3 yr)

Compute $1,720,061 $698,858

Storage $774,800 $245,353

Network $367,659 $37,104

IT Labor $675,360 $550,240

AWS Support $0 $98,131

Determining the Migration Bubble Payback Period

(i.e., Break-even)

On-prem (3 yr) AWS (3 yr)

Compute $1,720,061 $698,858

Storage $774,800 $245,353

Network $367,659 $37,104

IT Labor $675,360 $550,240

AWS Support $0 $98,131

Total $3,537,880 $1,629,686

$636,064 yearly savings

One-time migration cost: $563,738 Break-even: 10.6 months

Putting It All Together

Key Takeaways From The Session…

Understand the components of your migration bubble and

their corresponding costs

Determine the best “migration path” for each workload to

optimize cost in the migration process

Use AWS, APN partners and tooling

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