Determining whether to migrate to cloud infrastructure (IaaS) or to a cloud platform (PaaS) requires a thorough understanding of the various recurring costs associated with one’s existing infrastructure (not to the mention the one-time cost of auditing the footprint of any existing setup). Now, for anyone still in the planning stages of a start-up, the cloud can likely be a cost effective alternative to traditional hosting. For those with an existing implementation on traditional physical infrastructure, determining the cost effectiveness of a cloud transition becomes more involved. However, it is common to out-grow physical, vertically-scaled infrastructure and in those cases, a cloud (or hybrid) migration may be necessary for long-term scalability. Below are some cost factors that need to be considered:

  • Physical Costs - electricity, physical space (real estate, tax, lost office space), the cost of the equipment, the cost of upgrading the equipment, insuring the equipment.
  • Labor Costs/Productivity - paying personnel to maintain the infrastructure, assigning back-end work to developers and engineers who could be using their time to drive profits instead.
  • Accounting & Taxes - will time and money be saved by simplifying accounting? Cloud services can be classified as operating expenses (OPEX) and/or capital expenditures (CAPEX) in some cases.
  • Migration Costs - how much will it cost to migrate your infrastructure to the cloud? Every setup is unique, and must be evaluated on its own merits.
  • Long Term Costs - will scaling in the cloud save you money as your business grows?