Should You Migrate to a Cloud Hosted Infrastructure?

If you’re housing a bunch of clunky, heavy, hot servers in your own facility–it might be tempting to move things over to an IaaS with a cloud solution. This, at the least, will reduce the cooling costs of a building in your business. Cloud hosting has a lot to offer companies, but the logistics and complications of moving can be a bit tough to sort through. In this post, let’s walk through some of the details of migrating to a cloud hosting infrastructure.

Dynamics of Cloud Hosting

Some cloud hosting services will provide better transition services than others. The transition services allow you to move a cloud server from a host to a different host. If a service gets canceled or becomes too expensive, you can use your host to move your virtual server to a different cloud provider. This can save you lots of hours and lots of cash in the event of a transition. This also makes you more competitive in hosting costs, because if the transition bar is not set very high, then you can take advantage of new hosting options and lower costs when they pop up.

Scaling Down and Up

One of the famously great attributes of a cloud hosting infrastructure is the ability to scale the solution up when you need it. Initially, however, many companies will also benefit from the ability to scale their hosting service down. Using too many resources is simply a drain on the finances of the company.

If you’re setting up a physical server infrastructure that is very large, that infrastructure can waste a lot of data and CPU cycles. A cloud solution can help the same data run quicker and better. If you move the server solution with the cloud, you can opt to get the minimum size that you think you’re going to need. 

When you’re setting up a physical server infrastructure it can be hard to get the server solution down to the exact resources that you’ll need to run the site. But when you move to a cloud solution, you can look at the performance and then adjust the cloud solution to match the server size that your solution will need. The ability to dial in your server resources with the amount of data you’ll need helps you save money on hosting. If you can get your CPU down to exactly what you need, and only pay for the storage that you use, you’ll save money.

The cloud famously also allows you to scale up. When you need more resources for your site, there can be more machines that can be used. The scaling is also dynamic. If you run an ecommerce site and need to bump things up for Cyber Monday, you can plan ahead and buy the extra resources ahead of time.

Finance and Tax Considerations

When you consider moving to a cloud hosted infrastructure instead of a bunch of physical servers, there are additional compliance, finance, and tax considerations that come into play. 

Depending on the country and state where you live, there can be a difference between owning your own physical servers and paying a monthly service fee for a hosting solution. Monthly service fees can often be written off in B2B transactions, which may help lower the taxes on a business. If you buy your own hardware, the servers may actually be considered capital, which changes the way that you can write off the server. Depending on the type of small business or large corporation that you have, this capital write-off may occur as a lump sum or may have to be averaged over the lifespan of the device.

There are also compliance considerations. Some companies have to store information in servers that they hold in house, either for legal reasons or for company security reasons. If they outsource the hosting of the servers, laws may require that they not share the metal servers with other data and other companies. Some cloud providers are trying to help companies with compliance regulations and are attempting to find workarounds for this. If compliance is going to be an issue, you can always ask the hosting provider about their options.

Financial considerations include the protection of international data and the reports that departments have to make. When a business makes financial reports to either investors or even internally for reviews, servers constitute acquired capital while a cloud solution means technology and operation cost. This can affect the perception of a department’s performance or the taxation of the business. As for international data, some data centers in the U.S. may be required to submit to regulations and investigation that they don’t want to. The Patriot Act allows the United States government to have extensive research and investigative powers in the event that they need data from digital and technological sources.

Lessons from a Real-Life Migration

There’s an excellent article in the Netflix tech blog about what it was like for Netflix to move from its own servers to a cloud solution, Amazon’s own web services to be precise. They released an article about their experiences where they document some of the things that they learned from moving to a cloud-hosted infrastructure.

While the dynamics of the resources that cloud hosting are tantalizing, they are also far more unpredictable than running your own solution. When Netflix moved over, they found extra power from the ability to share resources, but they also found the system more unpredictable. Many of their own whiteboard predictions failed at scale in the real world. So they had to learn to cope with failure by inducing it in their own system to know how they would handle it when it was unexpected.

Migrating your hosting to a cloud solution can and will create problems. Some of them are foreseen, while some of them there is no way that you could’ve seen them coming. Netflix said that when they were migrating their own services over to a cloud solution, they had to have buy-in from every level of the company. There will be times when it looks easier to go back to the old physical servers that are hanging out in the garage. If you’re going to take the option of cloud hosting, be prepared to take it all the way.