This session is for anyone interested in understanding the financial costs associated with migrating workloads to AWS. By presenting real cases from AWS Professional Services and directly from a customer, we explore how to measure value, improve the economics of a migration project, and manage migration costs and expectations through large-scale IT transformations. We’ll also look at automation tooling that can further assist and accelerate the migration process.

1. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Shahbaz Alam
AWS Professional Services
September 28, 2016
Breaking Down the Economics and
TCO of Migrating to AWS

2. 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

3. Disruption is much easier today than ever…
Hotels Trading Insurance Grocery delivery
DevicesMusicEvent TicketsTaxi

4. Responding requires a new model that enables…
Focusing on differentiating your company
Innovating at start-up like speed
Reducing risk

5. To do that, we must harness the power of…

6. 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/

7. Customers want to make their datacenters
work with the cloud
???

8. Whiteboard engineering
Amazon EBS
Amazon RDS Amazon
ElastiCache
Amazon
Redshift
Amazon EC2 Elastic Load
Balancing

9. Building the Business Case…

10. 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

11. In the beginning . . .
…there was TCO

12. 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

13. Comparing TCO is not easy…
≠

14. 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 switches
Storage admin costs
Network hardware—LAN
switches, load balancer
bandwidth costs
Network 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

15. 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

16. 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

17. Resources to get you started
AWS TCO Calculator
https://awstcocalculator.com
Case studies and research
http://aws.amazon.com/economics/

18. Understanding Your Migration
Costs…

19. 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.

20. 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

21. The Migration Bubble – Components
Planning and assessment Migration tools Consulting partners
Internal training Duplicate environments Lease penalties

22. The Migration Bubble
Cost
Time
Planning
Migration Bubble
Operation and
optimization
• Planning and assessment
• Duplicate environments
• Staff training
• Migration consulting
• 3rd party tooling
• Lease penalties

23. 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-prem
infrastructure
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 Assessment
Re-hosting / Re-deploying
(Lift and Shift)
Re-architecting / Re-factoring
(Rewrite and decouple)
Application Optimization

24. 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
Process
Manually Move
App and Data
3rd Party Tools
AWS VM Import
Refactor
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

25. 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
Process
Manually Move
App and Data
3rd Party Tools
AWS VM Import
Refactor
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

26. 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)
BusinessFit
Technical Fit / Effort
Key Migration Desc.
Instant / Quick Win
Roadmap Prioritization
Minimal Investment
Do Not Move

27. Application (Infrastructure) Migration Use Cases
• Non-production environment
• Non-critical workloads
• Sustain downtime / outage
VM Conversion
• Production environment
• Non-critical workloads
• Sustain downtime
Host Cloning
• In place upgrade
• Sustain limited downtime
• Multi-tenant application environment to single tenant
App Containerization
• Production environment
• Critical workloads
• Low RTO and RPO (little to no downtime)
Live Migration
• Database
• Data Warehouse
• Unstructured data objects
Data Migration

28. 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
MigrationMethod
Live Migration
App
Containerization

29. 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.

30. Let’s do a Sample Total Cost of
Migration (TCM) Exercise…

31. 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
12
0
50
100
150
200
250
Very Low Low Medium High Very High
2 4 6 10 20

32. $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

33. 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

34. 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

35. Putting It All Together

36. 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
 Go FAST!

37. Just Remember…We Are Here To Help
Enterprise Support AWS PartnersProfessional Services
Sales and
Solutions Architects

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39. Thank You!