As per Allied Market Research Global, Cloud Migration Services Market is expected to reach $515.83 billion by 2027 (source article). Their research concludes:
“Increase in need for business agility & automation, ease in the deployment of applications with a pay-as-you-go model and rise in demand for cloud migration in business continuity fuel the growth of the global cloud migration services market. By application, the infrastructure management segment held the highest share in 2019. By region, on the other hand, Europe appeared as the highest revenue holder in the same year.”
With this confirmed market demand, what should manage services providers (MSPs) take into consideration?
When migrating to the cloud several aspects need to be assessed. I would start by understanding the customer core business, their business model and how they create value.
Business aspects to consider for cloud migration or how a company can benefit from a migration to the public cloud;
- Procurement cycles – Shift from CAPEX to OPEX for businesses that operate based on annual budgets. Being able to synchronize the procurement cycle with the cost of IT systems simplifies their operating cost model.
- Value chain – Companies can allocate bigger budgets to activities that produce real value, as per their business model and core competencies.
- Revenue turnover – For companies with quick cycles, the speed of revenue turnover might play an important role in the overall performance. Instead of investing in assets with a depreciation timeline of 5 years, they can produce more by being able to quickly and flexibly allocate budgets to activities that create value.
- Lean development and shorter time to market. For start-ups, highly innovating companies or companies that want to test a new business idea without taking the risk of a big investment, the OPEX model of cloud pricing is helpful, diminishing the overall risk the companies need to take for new initiatives.
- Unlimited scalability and flexibility. The IT operating budget can closely follow the consumption/adoption rate providing the capacity needed for the business to grow without requiring credit lines or other liabilities. For cash-rich companies, a migration to the cloud might enable the customers to allocate more resources to R&D or activities that produce real value, as per the customer’s business model and strategy.
- Mobility. Empowering the employees to work from anywhere while providing the same tools and resources to all employees, no matter their physical location. For some companies, this could represent an advantage in the feature, extending the geographical area where they can find talent at an acceptable cost.
- High Availability with geographical redundancy. For companies built around local markets, for small and medium companies without a global presence (spread across one continent or less), achieving geographical high availability and resiliency to natural disasters might be a higher challenge if they self host their IT infrastructure. For corporations that have subsidiaries spread across two continents or more, it doesn’t represent an issue.
- Operational Effectiveness. Shifting to IaC, companies can apply the software development best practices to the infrastructure, improving the automation effectiveness, reducing the operating cost and standardizing the infrastructure while making the need for custom optimizations small. Change Management, Release Management, ITIL best practices can be easier and more effectively applied. It also enables companies to leverage existing cloud solutions documentation.
- Features and trends adoption. It is easier for an organization to stay up to date with the latest release and the new IT trends while leveraging the services provided by a cloud vendor.
- Improving the responsiveness of customer/user interfaces through leveraging CDNs and various locations of cloud vendors, being closer to the end-users (internal or external) no matter where they are located.
The industry where the customer operates is important too.
If the customer’s business is non-IT related there are considerably more reasons to migrate to the cloud. The shift from CAPEX to OPEX, setup velocity, flexibility, agility and simplified operability can create multiple competitive advantages.
If the customer operates within the IT field, then the scale of the business matters.
- If it is a start-up, then the utilization of the cloud would reduce the initial investment and shorten the go-to-market time while enabling the business to correlate the costs with the consumption/user base improving flexibility and scalability. It also enables the organization to take a lean management approach for planning, by testing quickly and determine what works and what does not.
- If the company is an established business, flexibility and scalability still apply, but the effects are smaller, assuming the company has a good cash position and could afford investments or have access to easy and low-interest rate cred.
- Else, overall long term TCO will be bigger into the cloud than building and maintaining their infrastructure. Per the financial projects I’ve done a couple of years back, the TCO for 5 years, including the entire hardware depreciation exercise, would be five times cheaper owning the infrastructure than renting it from the cloud. Indeed, this approach comes with additional difficulties like staffing, managing, keeping up to date with best practices and software releases, overhead needed for operations and many others. With all that, the most successful companies in the IT field own and manage their infrastructure. Some of them even resell their in-house developed solutions to others, creating additional streams of revenue.
No matter the case, the long-term technology trend might require a transition to the cloud due to vendors and providers progressively reducing their on-prem solutions and the high operational cost of setting up, maintaining, and supporting custom production-ready open-source solutions.
I mentioned the above also because migrating to the cloud is not always the best solution. MSP must know what the customer core business is, its business model and how it creates value. Based on the above list of advantages for migrating to the cloud but not limited to it, the MSP should advise the customer on the best-tailored strategy for its cloud migration.
Once the business aspects have been revised, the MSP should advise the customer on the best-tailored strategy for its cloud migration. The most common pathways for migrating to the cloud are Lift & Shift, Evolve and “Go Native” (rebuild). The best graphical representation highlighting the differences between them is adapted from a concept by Craig Lowery, Research Director, Gartner and published by DevOpsGroup. They all have their advantages and disadvantages. I will trust you to discover them.
For big environments with an ecosystem of applications and multiple interdependencies between them and various RTO and RPO objectives, a single approach might not be enough. In complex cases, any combination of the above-mentioned pathways can be utilized.
The standard steps of a migration plan are:
- Discovery – including the business model discovery
- Chose the cloud services
- Chose the cloud migration approach
- Define the cloud consumption model
- Architecture redesign
- Build the migration plan
- Setup the migration tools in the cloud
- Execute the migration preparation tasks
- Migrate Non-Production Environments
- Test the Backup solution/solutions
- Migrate Production Environment
- Setup Backup & DR
- Build the documentation of the solution
- Hyper care phase in which every ticket is handled as a P1
- Standard Operations provided as Managed Services
For MSPs going through the migration steps from above enables them to prepare the solution for the upcoming managed services they want to sell to the customer.
A diagram of possible managed services is:
The managed services upsell opportunities that arrive in a cloud migration project are numerous. How a company focused on the run & maintain operations related activities can create for itself these upsell opportunities?
The obvious answer if your read the above is: performing cloud migration projects.
From an organisational perspective, they need to create at least one dedicated team to deliver these projects. A theoretical example of the team structure that would cover most of the customer needs Is:
Light team structure model:
- Cloud Solution Architect. A dedicated cloud architect with comprehensive experience in the cloud vendor is needed. If not available, a cloud solution architect who can adapt to various cloud providers can do the job. If there is no Cloud Security Architect, the Cloud solutions Architect should oversee the security-related topics too.
- RBAC & Billing specialist. Ideally, a person with experience in setting up the specific cloud vendor environment is needed. A senior Cloud Systems Engineer could cover this part too.
- Cloud Network Engineer. If available, a dedicated network engineer with comprehensive experience in the cloud vendor is needed. If it is not available, a cloud solution architect who can adapt to various cloud providers can do the job.
- DevOps Engineer. If the customer wants to take advantage of the IaC benefits of running infrastructure in the cloud, a DevOps engineer is a must. If DevOps is not required, the engineer will sooner or later be utilized in other projects
- 2 Cloud Systems Engineers. The systems engineers need to configure, set up and optimize Cloud IaaS ( storage, compute instances Linux/Windows, Containers), Cloud specific PaaS services and the Cloud monitoring solution.
- DBA – with experience on the specific database vendor
- Application specialist – with the customer-specific application ecosystem.
Total: 8 + Team Lead
Extended team structure model:
- Cloud Solutions Architect
- Cloud Security Architect
- RBAC Specialist
- Billing Specialist
- Cloud Network Engineer x2
- DevOps Engineer x2
- Cloud System Engineer Windows x2
- Cloud System Engineer Linux x2
- Application Specialist – 1 for each set of applications
- Backup specialist – per the backup solution needed
- Monitoring specialist
- Optional: Processes specialist
- Optional: Technical writer for documenting the solution
- Optional: Project Manager with experience in cloud migrations
- Optional: Program Manager for ecosystems of applications containing many various applications to be transitioned.
Please observe that most of the topics have at least one senior SME and one junior engineer. The goal is to ensure new people are trained by the senior team members ensuring the knowledge transfer. Sharing resources is also enabled creating new synergies between existing teams. An additional benefit consists of providing career paths to the employees. A junior support engineer required for maintaining a managed service has the opportunity to progressively get involved in project delivery, project planning or solution design. This way, a vertical is created, through which knowledgeable resources are trained within the company, per the company needs and sometimes with a lower cost and quicker effectiveness than hiring new senior roles.
Please also note the addition of the Enterprise Architect. His role would be to align the delivery projects with the MSP Strategy, Product and Sales departments. He also has the role to advise the customer on its strategic transition towards the cloud through his experience.
For MSPs that want to have a piece of Market share in the cloud transitioning business as well as diversify and extend their portfolio of managed services, the above will help you better advise your customers, choosing the right migration path for them and build a team to deliver the projects. If you are looking for projects for the newly created business stream, perhaps the Tender Evaluation Proposal from my previous blog post can inspire you.