Lock stock barrell to Cloud

Data Center exit & Cloud – Key Trends

Data center (DC) have been the fulcrum for Enterprise IT, running the infrastructure, applications and data. With the expansion of Hyperscale cloud providers in different geographies, Enterprises in the recent years have started leveraging the benefits of cloud mainly for non-core workloads, Internet facing properties, IT resilience needs etc, while continuing to run their Core applications from on premise data centers

With Covid -19 further accelerating the need for digitization, Enterprises now need to review their data center estate and evaluate whether it meets their growth requirements and future business strategies. With IT Services (Infrastructure, Software Licences, apps) now available as completely Utility based models, there is a growing requirement for Enterprises to review their cost structures with changing consumer preferences and business demand in the new age. Most companies therefore prefer to divest non-core assets and adopt an asset light business model for enhanced operational agility.

As an example, Enterprises running on premise IT continually need to invest in Assets, constant Asset refreshes with different time intervals, Operating expenses and Significant portion of their IT efforts in non-differentiating tasks to run their IT. Therefore, there exists a motivation within the Enterprises, to move lock stock barrel in Cloud and leverage the gains in their business and competitive play.

According to Flexera, state of tech report 2021, cloud migration is one of the top most initiative emerging out of this pandemic, with 62% of respondents mentioning they will reduce their spends on data centre’s in next 24 months, with 27% planning significant cuts and 7% completely exiting their data centres. The report is devised basis responses available from Enterprises in US and European regions.

The future IT architecture as predicted by most of the analysts, will be enterprises running their workloads between Cloud and Edge computing. Use cases that require real time data processing that cannot be subjected to latency issues, those workloads and use cases must be deployed in Edge computing, other workloads can either be run from cloud or enterprise data centres. Thereby, this also requires Enterprises to constantly review their estate and realign their Future state of IT architecture, leveraging their data centers , cloud and their edge computing needs. 

 Key obstacles

There are many obstacles while exiting a data center and making large scale changes to the Enterprise IT. Some of these obstacles include

1.     Contractual commitments & protecting existing investments in IT elements such as Assets, Software Licences etc.

2.     Costs involved during Migration efforts as well as dual run costs, not only maintaining the existing data centre costs but also incurring costs on Public cloud.

3.     Complexities associated with migrations, and few of the inherent risks associated such as data loss, interruption to mission critical applications, User experience etc.

4.     Security concerns especially around confidential information.

5.     Legacy workloads and limited compatibility available on the cloud.

6.     Financial cultural change associated with Cloud run, i.e.

7.     Selection of appropriate Cloud strategy and platform after careful assessment of the existing workloads and the organization business needs in the long run.

Enterprises can explore tools, technologies, integrations and devise a plan for their data center exits with their teams. However, the approach can be very complex, resulting in cost overruns, besides limited skills, since there will be a dual run of environments. Enterprises can work with cloud providers and their partners, which can bring in expertise, financial incentives and capabilities to consult, discover, assess, devise and execute large scale migrations.

Data center Exits – Partner play

Data center Exits are complex and strategic decisions, since it’s not just moving an application to cloud, it’s about moving the complete applications, data and infrastructure. There are many industries such as financial services, wherein regulations may mandate some of the workloads in fully managed infrastructure, thereby the same needs to be deployed on premise or from a dedicated infrastructure / private cloud hosted in a third-party data centers. Similarly, latency, sunk in costs, non-compatibility of the workloads in Public Cloud as well as complexity can play a role in ensuring the Enterprises continue to retain some of their core workloads still within their data center’s.

It would be of paramount interest to the Enterprises to leverage some of the programs available from major Hyperscale public Cloud providers as well as expertise from Migration specialists MSP / GSI partners to plan your DC migrations. MSP / GSI partners play a pivotal role in working with Hyperscale partners to accelerate the DC migration. The CSP / MSP partners can work with Enterprises to provide a structured approach for Cloud migrations and DC exits with their cloud migration frameworks. The frameworks are devised by partners to 

1.     Discover, assess and mapping of your IT workloads, applications, data. Do an assessment of your Business needs, Market needs and your current challenges. Along with this partner can also do an assessment on your premise DC, contractual commitments, Asset life and refreshes if needed.

2.     Devise a migration plan for your on-premise workloads to the Cloud looking at the Data center contractual commitments, asset usability, type of workload and its compatibility etc. Partners can build Migration plan in migration waves and finally exit the Data center’s. Since IT applications and workloads still need to run, there will be a parallel run Costs at the time of migration.

3.     Devise a Cloud Business case providing a TCO / ROI value for your DC Exit considerations. Cloud Business case can be an important metric to determine the financial benefits on Cloud Migration, as well as other business benefits such as speed of innovation, capex avoidance, improving customer engagement, leveraging data to bring in further optimizations in your business processes etc.

4.     Partners bring in financial incentives during migrations, right aligned architecture, highly optimized migration plan, expertise in migrating applications and workloads, automation in setting up Landing zone, Secure architecture’s s as well as continual cost optimization in the run plan.

5.     Partners can also help you to liquidate data centers, Hardware and other assets, in order for you to  

6.     Below are few off the Migration acceleration programs to accelerate their DC exit.

a.      AWS Migration Accelerator program (MAP) – This program is available from AWS to MSP Partners for qualified customers who are looking to exit their data centers and move to AWS. The Program offers upfront benefits as well monthly rebates based on meeting thresholds defined every year defined in the contracts. The rebate options get multiplied for specialized workloads (Such as Windows, AWS native Database options etc.)

b.      Azure Data center Optimization (DCO RAM) – The DCO program is aimed at accelerating migrations and launching new Azure offerings by providing partners with guidance, tools, training, offers and incentives. The Program offers incentives to the partners (which in turn is leveraged by customers) with upfront investment as well as monthly rebates based on the meeting the thresholds as defined in the program.

c.      GCP Data center Exit (RAMP Program) – The RAMP Program is a holistic, end to end migration program to help customers simplify and accelerate their path to success. The RAMP Program starts with assessment, planning, migration and Cloud operations. GCP also offers suite of tools, best practice guidance, migration approaches, Cloud architecture and many financial incentives, to accelerate the DC Exits.

Choose your path

Every Enterprise is unique and needs to devise their own path. Additionally, each Enterprise need to digitally transform in this age. The end goal for the Digital transformation for every enterprise is to evolve into a technology company. There are many variables to consider when choosing an approach to data centre exits, opinions include whether to partially migrate or move completely to cloud and the best time frames for doing so.

Below are some of the specific observations and recommendations for the Key decision makers in the Enterprises.

1.     Prepare for the Journey

Each Enterprise need to review their workloads, applications and devise future path for each of these applications, whether to retain, modernize, migrate or Enterprises need to also look at their applications and workloads and plan their future state. Enterprises can leverage 6 R’s approach for their applications, the first 3 R’s is about migrating the customers to the Cloud and the remaining 3 R’s about replacing the applications or moving it to a SaaS based application.

a.      Rehost- Rehost their applications and workloads to cloud leveraging IaaS. This is preferred way for legacy applications since it involves no application change and Enterprises can plan their modernization approach once the workloads are migrated to cloud.

b.      Re-platform- This approach refers to the application being deployed leveraging some of the platform capabilities available with Cloud providers without doing major code changes. This offers Enterprises to take advantages of built in capabilities available with Cloud Service providers such as agility, scalability, security, reliability etc and leverage them to run the workloads on Cloud.

c.      Re-architect – This is the most complex approach as compared to the above two approaches, since Enterprises need to re-architect their applications and workloads from monolithic to a modernized micro services-based application architecture. This will enable more agile development cycles as well as faster releases.

The choice to determine the approach is often determined by Migration time, efforts as well as Cloud maturity and technical depth.

d.      Replace – Replace few of the applications to SaaS based options. This option can be useful for some of the legacy applications, wherein mature SaaS based applications are available and doesn’t need much customizations (Eg- Microsoft O365 for emails is now heavily adopted and deployed in Enterprises.)

e.      Retire – This approach refers to retiring the applications if these are no longer needed. At the time of discovery, you can review each applications and check with the owners. The savings can boost business case for the Enterprises looking at DC exits as well as allow them to focus on the applications, which are relevant and reduce the number of applications, which are to be secured.

f.       Retain – The set of applications which need to be retained as of now being critical to the business. Enterprises can revisit the same later 

2.     Making Business sense on the Cloud

Once the assessment of existing applications is done and their future path is devised, it is now time to consider financial metrics for you DC Exit. It is pertinent for any Enterprise Decision makers to establish TCO / ROI for cloud as compared to running the applications on their data center’s, since there are additional costs which get incurred on Cloud such as migrations, parallel run apart from restructure investments on data center’s, Hardware and other infrastructure etc. While Cloud brings in usage and consumption driven cost models, this goes against the typical Capex model of purchases, which has been the traditional buying patter.

Most of the Enterprises will need to engage their finance teams in analysing the TCO / ROI on Cloud and seek Restructure funds from the CFO. Typical assessment will include

a.      Migration Plan, Migration Waves with year on year Costs incurred on premise and cloud. Total cost on Migration, parallel run costs associated with migration.

b.      Cloud efficiency gains and Cost savings once the environment is migrated on the cloud.

c.      Restructuring funds (Investments needed) to exit the DC contracts, complete the remaining leases or costs on Hardware / Software components.

d.      Avoidance of Capex, Opex & other costs, if the workloads were to be migrated on the Public Cloud.

e.      Upfront Financial incentives & rebates available from partners & Year on Year Spend commits.

f.       Payback period & ROI from the Cloud Migration.

g.      Other quantifiable benefits to the Enterprises such as Increased speed of Innovation, increase in customer engagement, data innovation, Teams working on differentiating tasks etc.

h.      In addition to this, it is also required to consider differentiating business value of the workloads being migrated, the desire for transformation, and the organizational readiness for cloud adoption all need to be examined.

3.     Migration Factory

Migration Factory refers to the methodology that enables Enterprises to scale, accelerate and standardize large scale cloud migration and application transformation through a predefined, repetitive process.

Migration factory is a cross functional team, comprising of Business & technical professionals from Enterprises & partners to discover, assess, design, plan & execute the migrations at a large scale. Establishing a Migration factory with cross functional specialists aligning with the Business leads accelerates the migration velocity, optimizes the costs and enables application, IT, Digital and data transformation on Cloud.

4.     Cloud ++

Cloud services have matured immensely over the years and each of the Hyperscale Public Cloud providers have suite of services such as Mobile, Data analytics, ML / AI, Containers, DevOps & Block chain etc. Once migrated to Cloud, Enterprises can start experimenting with these services and subsequently adopt the same, based on their business needs. Cloud can accelerate Digital transformation by offering a ubiquitous platform for enterprises, wherein they can modernize their applications, analyse data from different services, leverage services such as ML, AI etc to improve their customer experience, improve their internal efficiencies and gain competitive edge. As Andy Passy mentioned in his @reinvent2020, constant reinvention is instrumental in building a sustainable business and organisations should be reinventing while they’re healthy. Therefore, adoption & migration to the cloud today needs to direct engagement from leadership and it is imperative for the leadership to challenge their teams to accelerate the same. 

5.     Cloud Adoption Epic:

The speed and ability of your organization to modernise your infrastructure and derive transformational value from the cloud will be determined by the ability to embrace new ways of working - a strong vision and governance from leadership; collaborative, innovative learning; automated, scalable infrastructure; and above all a secure foundation are crucial to set you on the path to a successful migration and modernization journey. It is therefore, essential for every enterprise to create an organization and culture for transformation starting with

a.      Leadership – Cross functional leadership with executive sponsorship to budget, govern and lead cloud migrations as well as put up the Cloud CoE and Cloud Operations models.

b.      Learning – Continuous learning culture & upskilling of resources with learning tools, classrooms, Labs, certifications along with the support from Partners, third party

c.      Cloud Maturity – Mature and scale your Cloud Operations with managed, Serverless services as well as quality of CI / CD process chain

d.      Security – With ever increasing threats, Securing the Cloud infrastructure & protecting the data and applications is key. Upskilling and continual investments in Security is must to ensure trust, compliance and security in the Cloud. 

Disclaimer : The views mentioned above are my own.