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Breaking down the economics and tco of migrating to aws - Toronto

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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.

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Breaking down the economics and tco of migrating to aws - Toronto

  1. 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. 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. 3. Disruption is much easier today than ever… Hotels Trading Insurance Grocery delivery DevicesMusicEvent TicketsTaxi
  4. 4. Responding requires a new model that enables… Focusing on differentiating your company Innovating at start-up like speed Reducing risk
  5. 5. To do that, we must harness the power of…
  6. 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. 7. Customers want to make their datacenters work with the cloud ???
  8. 8. Whiteboard engineering Amazon EBS Amazon RDS Amazon ElastiCache Amazon Redshift Amazon EC2 Elastic Load Balancing
  9. 9. Building the Business Case…
  10. 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. 11. In the beginning . . . …there was TCO
  12. 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. 13. Comparing TCO is not easy… ≠
  14. 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. 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. 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. 17. Resources to get you started AWS TCO Calculator https://awstcocalculator.com Case studies and research http://aws.amazon.com/economics/
  18. 18. Understanding Your Migration Costs…
  19. 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. 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. 21. The Migration Bubble – Components Planning and assessment Migration tools Consulting partners Internal training Duplicate environments Lease penalties
  22. 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. 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. 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. 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. 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. 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. 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. 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. 30. Let’s do a Sample Total Cost of Migration (TCM) Exercise…
  31. 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. 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. 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. 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. 35. Putting It All Together
  36. 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. 37. Just Remember…We Are Here To Help Enterprise Support AWS PartnersProfessional Services Sales and Solutions Architects
  38. 38. Remember to complete your evaluations!
  39. 39. Thank You!

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