Business Case for Cloud Migration

Author:
mario@amazon.com© 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
AMAZON CONFIDENTIAL
Mario Thomas
Senior Consultant, Advisory
AWS Professional Services
17 April 2017
The Journey to the AWS Cloud
Business transformation through migration to the cloud

Author:
mario@amazon.comAMAZON CONFIDENTIAL
Author:
mario@amazon.com
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Author:
What to expect from this session
• Find out what a migration is
• Explore reasons for migration
• Considerations before migration
• The AWS approach to migrations
• Preparing the business case for migration
• Governing your cloud workloads
• Executing a migration
• Operating your migration
• Accelerating your migration
• Reinventing your migration

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Introductions
• Name
• Role
• Time at AWS
• Last thing you bought from Amazon.co.uk

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The Prize
What our customers win if they get this right

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A large-scale migration typically involves migrating
hundreds of servers and application workloads to
AWS. We often talk to customers who are moving
tens of thousands of servers and application
workloads to AWS.
A workload is all of the constituent parts of an
application needed to make it available to end users;
connectivity, data centres, servers, software, people
and third parties.

Author:
Author:
mario@amazon.com
Disruption demands a response
BCG research indicates that
leaders believe the biggest
impacts on their industry will come
from:
• Speed of adopting new
technology
• Big-data analytics
• Technology platforms
• Enhanced operations processes

Author:
The advent of the Cloud is as significant for businesses and other
organisations as the adoption of the mainframe was in the 70’s,
the introduction of the desktop PC in the 80’s and the arrival of the
Internet in the 90’s.
This isn’t just digital or IT transformation, this is organisational
transformation.

Author:
Author:
mario@amazon.com
But driving real change is difficult when so
much budget just supports the status quo
Source: McKinsey Global Survey
Mature organisations are often built
upon a complex digital tapestry that
embodies years of technical debt
Addressing this issue allows IT
organisations to better serve the
needs of the business, and
enable digital transformation and IT
transformation laying the
groundwork for wider
organisational transformation.

Author:
We saw what happened when IT couldn’t respond to the needs of
the business when the Internet arrived – they were distracted by
Y2K.
New media and digital teams sprung up in organisations,
removing IT from the essential roles of innovation and governance.
The same will happen with Big Data, IoT and serverless if IT
continue to be focussed on IT instead of the needs of the
business.

Author:
Author:
mario@amazon.com
Reasons for migration
Change of leadership
New ownership
Strategic re-alignment
Compliance requirements
Improve service availability
Global expansion
Improve security
Lack of IT resources
Overwhelming technical debt
Out-pace disruptors
Grow the business
Increase innovation
Reduce capex and opex
Improve productivity
Cost avoidance
Business agility
Increase resilience
Enter new markets
Right-size infrastructure
Re-alignment of the role of IT

Author:
Author:
mario@amazon.com
Responding to disruption requires a new model
Focus IT on what differentiates your business.
Retire technical debt.
Innovate at start-up like speed
Reduce risk

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The Business Case
Preparing the business case for migration

Author:
Establishing an effective business case for the
adoption of AWS for your application workloads
requires knowledge of how your organisation does
things now.
By understanding your existing on-premises or co-
location environments as well as the things that sit
around them you will be able to lay the groundwork
for an effective business case.
This presentation helps you build those foundations.

Author:
Business Case Consideration
1. Why are you migrating to the “Cloud”?
Do you have a specific business goal that you would like to achieve by moving to the cloud (cost saving,
agility, headcount reduction, closing data centre, compliance requirements, global expansion, etc.)?
2. What is the Impact of cloud adoption on your organisation?
Technology, People, Process, Business, Security, Governance
3. How will you adopt the cloud?
Phased approach, one shot (cutover), pilot, parallel environment, execution model
4. How long will the migration take and how much will it cost?
Timeline, cost of migration
5. Do you know what you want / can migrate to the cloud?
Existing workloads, dev / prod, net new
6. Who will perform the migration?
Your team, AWS, Partner

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Understanding Cloud Economics

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Traditionally, AWS customers have focussed on
using total cost of ownership (TCO) analysis as the
primary means of modelling the cost of adopting the
AWS cloud.
TCO works well for many customers, but wider
appreciation of cloud economics and the topics of
total cost of migration (TCM), cost optimisation (CO),
the payback period and the value benefits of the
cloud add valuable insights with which to form the
basis of a business case for migration to the cloud.
A TCO analysis is not a business case.

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Cloud Economics
• Concerned with the cost savings achievable in the cloud
• A focus on tangible benefits of the cloud:
• migration bubble
• total cost of ownership
• cost optimization
• payback period
• And intangible benefits:
• time to market
• developer productivity
• agility

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Cloud Economics
• Leads to development of a cloud business case
• marginal internal rate of return
• net present value
• return on capital employed
• return on investment

Author:
Author:
mario@amazon.com
Cloud Economics
Intangible
Benefits
$
1 2 3 4 50
TCO
Migration Cost
Cost Optimising / BAU
Current / Do Nothing
AWS Environment
Payback
Period
Time
Cost

Author:
Author:
mario@amazon.com
Total Cost of Migration (TCM)
Intangible
Benefits
$
1 2 3 4 50
TCO
Migration Cost
AWS Environment
Payback
Period
Time
Cost

Author:
• All migrations have a cost, even small migrations
• The investment needed to achieve the migration is often
called the migration cost or the migration bubble
• Costs typically include:
• discovery, planning and assessment costs
• proof of concept (POC) activities
• migration tooling
• application readiness
• staff readiness and training
• software licensing changes

Author:
• Continued…
• running duplicate environments during migration
• lease penalties
• redundancies / restructuring / re-deployment
• external consultancy
• The migration bubble can be controlled
• Migration planning can help
• Migrations can be optimized for cost, speed and risk or
balanced for all three

Author:
Author:
mario@amazon.com
Total Cost of Operation / Ownership (TCO)
Intangible
Benefits
$
1 2 3 4 50
TCO
Migration Cost
AWS Environment
Payback
Period
Time
Cost

Author:
• TCO provides a comparative total cost of ownership
analysis for on-premises workloads as compared to the
cloud
• Is valid up until migration actually takes place
• Doesn’t consider use of higher level services
• Is not a price quote or forecast of your future spend
• Answers the question: “How much would it cost to keep
all of this in the cloud”
• Used for budgeting and contributing to the wider
business case

Author:
Author:
mario@amazon.com
Hardware
in a Data
Center

Author:
Author:
mario@amazon.com
≠

Author:
Author:
mario@amazon.com
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
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, etc. 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

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Author:
mario@amazon.com
Cost Optimization (CO)
Intangible
Benefits
$
1 2 3 4 50
TCO
Migration Cost
AWS Environment
Payback
Period
Time
Cost

Author:
Author:
mario@amazon.com
Cost Optimization (CO)
$ $
Paying for what
you use
Paying for what
you need

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Cost Optimisation (CO)
Simple Stimulating Stretching
Consolidated Billing
Permissions
Tagging
Idle Resources
Design for Elasticity
Instance Right Sizing
Storage
Purchasing Options
OS Licencing
Offloading Architecture
Higher Level Services

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Tangible vs. Intangible Benefits

Author:
Author:
mario@amazon.com
Intangible Benefits
Intangible
Benefits
$
1 2 3 4 50
TCO
Migration Cost
AWS Environment
Payback
Period
Time
Cost

Author:
Tangible cost savings (financial benefits) associated
with migration to the cloud are not the only benefits
to be gained from it. Analysing the intangible
benefits (economic benefits) a migration could have
on your business and your bottom line can lead to a
more rounded business case for justifying it and a
greater urgency to complete the migration.

Author:
Author:
mario@amazon.com
Intangible Benefits
$tangible
benefit
intangible
benefits…

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Author:
mario@amazon.com
Intangible Benefits
Tangible
/ Tactical
/ Operational
/ Technology
Intangible
/ Business
/ Strategic
Scalability
Increased productivity
Time to market
Risk mitigation
Agility
Global expansion
Team morale
Pace of innovation
Resilience
Resource efficiency
Self service
Reduced capex
Reduced opex
Migration cost
Payback period
MA&D
$

Author:
Intangible Benefits
• Intangible (value) benefits will depend on your business
• There are numerous KPIs and they can even be
applicable across industries
• You may already be measuring them
• You may already be reporting performance against them
• Intangible benefits once understood should be able to
map to financial benefits / improved business
performance

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Example Intangibles

Author:
Author:
mario@amazon.com
Example Intangibles
Example Value Benefits Specific to a Customer of adoption of AWS Cloud
No need to purchase for peak capacity ✔
No need to guess capacity for theoretical peaks ✔
No hardware obsolescence ✔
Refresh instances to new generation instances at any time ✔
Avoid stale servers sitting in racks while development takes place ✔
Reduce costs by turning off idle resources in any environment ✔
Avoid need to purchase duplicate disaster recovery infrastructure (17% of estate) ✔
Lower infrastructure management head count required for AWS vs. on-premise ✔
Provision storage for what is actually needed and not what could be needed ✔

Author:
Author:
mario@amazon.com
Example Intangibles
Example Value Benefits Specific to ABSA of adoption of AWS Cloud
Avoid pending storage refresh costs by moving backup to AWS ✔
Apps moving to AWS could provide younger hardware to those approaching EOL ✔
Design for resilience, failover and elasticity – avoid unecessary hardware purchases ✔
Improve application performance for customers through use of CloudFront ✔
Avoid maintenance costs for production kit not yet in use ✔
Reduce labour costs, recruitment costs and address skills shortage for infrastructure ✔
Rapid experimentation with no hardware lead times ✔
Shift to self service culture ✔
Ability to introduce DevOps/DevSecOps culture ✔

Author:
Author:
mario@amazon.com
Understanding Cloud Economics
Intangible
Benefits
$
1 2 3 4 50
TCO
Migration Cost
AWS Environment
Payback
Period
Time
Cost

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Building the Business Case

Author:
Author:
mario@amazon.com
Discovery
Collection of key data points:
• People Costs
• 3rd Party Costs
• Infrastructure Costs
• Application Costs
• Migration Costs
• Current intangibles

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Author:
mario@amazon.com
Discovery
Current Budget
Customer sign off of current
budget review:
• Review of budget by
customer
• Customer to confirm it is
accurate
• Budget used as basis for
business case

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Author:
mario@amazon.com
Discovery
Current Budget
Migration Bubble
o Application discovery
o Current costs of applications
o Exit costs of migration

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Author:
mario@amazon.com
Discovery
Current Budget
Migration Bubble
o Compare on-prem / co-lo to cloud
o Consider like-for-like
o Recalculate for six R’s
TCO

Author:
Author:
mario@amazon.com
Discovery
Current Budget
Migration Bubble
o 11 principles of cost optimisation
o Apply to TCO models
TCO
Cost Optimisation

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Author:
mario@amazon.com
Discovery
Current Budget
Migration Bubble
TCO
Cost Optimisation
Business
Case
Preparation
AWS prepare business case:
• AWS analyse data points
• Multiple operating models considered and presented
• Costs for future state included
• Comparative budget’s included
• Cash flow forecast included
• Measuring value benefits of the migration

Author:
Author:
mario@amazon.com
Discovery
Current Budget
Migration Bubble
TCO
Cost Optimisation
Business
Case
Preparation
Business Case
Outcome:
• A detailed business case that addresses the key considerations
• Multiple options for the operating model
• Multiple options for the release of existing costs
• Operating profit and loss (P&L) statement for 1-3 years
• Cash flow forecast for 1-3 years
• Key changes in HR and MSO contract
• Executive summary plus detailed analysis

Author:
Author:
mario@amazon.com
When to Produce a Business Case
At each stage of adoption:
• Project
• Foundation
• Migration
• Reinvention
Customers may opt to develop any and
all types of business case to establish
gating criteria to the next stage.

Author:
Author:
mario@amazon.com
Types of Business Case
Directional Business Case
High-level, designed for establishing direction for the Cloud
journey. Based on high-level data inputs, directional
accuracy.
Refined Business Case
More refined than directional, adds greater detail around
people, designed for confirming high-level business case.
Based on multiple data inputs medium accuracy.
Detailed Business Case
Deep-dive of multiple data points, designed for Boards to
approve adoption of cloud / reinvention of cloud. Highly
accurate.
Typically delivered by
Customer - self-service,
Partner and/or
SA / AM / TAM
Partner and/or
ProServe
Partner and/or
ProServe

Author:
Author:
mario@amazon.com
Business Case Accelerator - Inputs
Input Directional Refined Detailed
High-level assumptions (adjustable)
Business Objectives R
Simple TCO Calculator
Migration Cost Estimator
Six R’s Analysis
Infrastructure data points -
Third Party data points -
Customer and CFO financial data -
Automated & Manual Application Discovery Data -
Simple Opportunity Calculator
Resource Efficiency Model
CAF Assessment
Business Case Accuracy
= required
= optional

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Author:
mario@amazon.com
Business Case Accelerator - Outputs
Input Directional Refined Detailed
High-level business case presentation
Backing data
Calculate migration bubble
Calculate the operating cost
Decision case file (output from business objectives)
Map intangible benefits to financial performance
Detailed multi-year business case -
Cloud Strategy -
NPV Calculation -
MIRR Calculation -
ROCE Calculation -
ROI Calculation -
Technical plan - -
Business Case Accuracy
= required
= optional

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Author:
mario@amazon.com
Migration
Readiness &
Planning
(MRP)
Migration
Readiness
Assessment
(MRA)
Alignment with MAP
Refined
Business Case
(the accelerator content
and approach should be
used by the MRA team to
deliver the MRA to the
customer)
Directional
Business Case
(may get the attention of the
MAP sales team and
then become the basis of
a proposal to the customer
to do an MRA)
Detailed
Business Case
(Used to build the
Business Case for
migration at the customer)
Migration

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Case Study – A UK Bank
• Customer wanted a directional business case
• Engaged in early March 2017
• AWS hosted a 1-day customer workshop
• Customer collated data over a two week period
• AWS engaged Cloud Economics, ProServe and storage team to
develop directional business case based on data provided by
customer
• Directional business case presented to customer for consideration
• Business case now going to Board to approve refined and detailed
approaches

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Case Study – A UK Bank
• Tech refresh in existing DC’s - $275m
• Add mainframe (+$122m)
• Replace existing DC’s with ‘private cloud’ – $160m
• Add datacentre running costs (+$35m)
• Replacement with AWS – $110m, made up of:
• Compute – $52m
• Storage – $39m
• People – $19m; 54% lower people costs
• AWS 60% more cost effective than tech refresh and 31% more cost
effective than ‘private cloud’.

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Discovery of Data Points

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Discovery of Data Points
1. People Costs
2. 3rd Party Costs
3. Infrastructure Costs
4. Application Costs
5. Migration Costs

Author:
Author:
mario@amazon.com
Data Points and Effort
Data Points
Effort
High effort,
many data
points. Leads
to a high
quality
business case.
Low effort, many
data points.
Difficult to build
compelling
business case.
Low effort, few
data points.
Unusable
business case.
High effort, few
data points.
Leads to an
inaccurate
business case.

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Discovery of Data Points – People
People Costs
People costs include (and are not limited to):
• Direct people costs (employees):
• Recruitment, retention, replacement and retirement costs
• Activity costs including undertstanding time and motion
• Training and development costs
• Physical space, equipment, and services
• Direct people costs (contractors):
• Recruitment, retention, replacement and retirement costs
• Cost per hour/day/week/month
• Physical space, equipment, and services

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Discovery of Data Points – 3rd Party
3rd Party Costs
3rd Party costs include (and are not limited to):
• Contract related costs
• Fixed costs (maintenance, etc.)
• Variable costs (innovation, change requests, etc.)
• Variation penalties / early termination penalties
• Lock-in deals
• Tools lifecycle status
• Software licences (e.g. orchestration tools / multi-cloud)
• Activity costs including undertstanding time and motion

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Discovery of Data Points - Infrastructure
Infrastructure Costs
Infrastructure costs include (and are not limited to):
• Data centre costs
• Facilities costs
• Lease term remaining
• Lease termination penalties
• Cost of reduced footprint
• Connectivity
• Leased lines to the data centre
• Servers
• Number of physical servers
• Number of virtual servers
• Virtual servers mapped to their physical counterparts
• Specification (CPUs, cores, RAM)
• Performance characteristics (CPU/RAM/IO min/max/avg.)
• Storage (SAN, NAS, direct-attached)
• Network connectivity (peak throughput)
• Dependencies on other servers

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Discovery of Data Points - Infrastructure
Infrastructure Costs
Infrastructure costs include (and are not limited to):
• Upcoming refreshes
• Existing end of life plans
• Date purchased / instantiated, time remaining on capex
• Cost of purchase / instantiation, cost remaining on capex, lease penalties
• Depreciation / amortisation approach
• Data centre management costs (non-third party) maintenance and support
• Utilisation of the servers
• Applications and systems installed on the server
• Power supply, cooling, backup, DR
• Security, Compliance and certification cost

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Discovery of Data Points - Applications
Application Costs
At the same time as you perform server discovery, you should also be
establishing what applications (“workloads”) you are running. The more
data points you can collect about your applications, the better equipped you
will be to make a decision about how they will feature in the migration:
• Number of application workloads
• Map workloads to the underlying servers
• Establish workload dependencies (both server and other workloads)
• Review OS licensing and the underlying OS (move to Amazon Linux?)
• Understand upcoming application changes
• Consider application migration patterns
• Perform a “Six R’s” analysis of each workload
• Re-examine the Six R’s analysis and understand scope for:
• R1 > R2 or R5
• R3 > R4
• R5 > R4
• R6 > R5 or R4

Author:
• Application maintenance costs
• Innovation / ongoing development / bug fixes
• Managed service organisation
• Licensing landscape
• Licenses in place
• Transferability of licences
• Upcoming licence renewals
• Application requirements:
• SLAs
• Disaster Recovery
• High Availability
• Security and access

Author:
Author:
mario@amazon.com
Discovery of Data Points – Migration Patterns
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
Create Cloud
Strategy
Design, Build AWS
Environment
Move the
Application
Determine
Migration
Process
Manually Move
App and Data
Third-Party Tools
AWS VM Import
Refactor
for AWS
Rebuild Application
Architecture
Vendor
S/PaaS
(if available)
Third-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

Author:
Author:
mario@amazon.com
Discovery of Data Points – Six R’s
Pattern
Label
Migration Pattern
Name
Pattern Description Examples
Retain
• Customer will keep host / application in their source environment
• Minimal analysis/validation of scope and application affinity
• Dependency on integrating service management
Unresolved Physical Dependencies
Mainframe/AS400
Non x86 UNIX Applications
Retire
• Application and host decommission on source
• No migration to target
• Application owner approvals needed
Existing Decommission Program Scope
UNIX, AIX, SCO;
Clustered host for DR, alternative HA hosts
Re-Hosting
• Like for Like application migration to AWS
• Minimal effort to make the application work on AWS (Minor application changes)
• Storage migration will be needed (without conversion)
• UAT - Some level of application testing
Simple to Medium V2V, P2V
Storage: Local to DASD
RHEL 6 above
Win 2008 above
Re-Platform
• Up-Version of the OS and/or Database onto AWS
• Some level of application changes
• Application reinstallation on the target
• UAT is highly recommended
• Database to AWS RDS
W2K3 to Win 2012; Win 2008 below; RHEL below; Oracle 8
to 11; All databases
New application releases
All clusters (MS cluster, DR)
MS SQL same technology (RDS)
Re-Factoring
• OS and/or Database porting
• Middleware and application change to AWS
• Data conversion; Database transition to MySQL, Aurora, etc.
• UAT required; HPC Grid, No ITIL
• Application architecture changes may also require Up-Version or Porting
• Middleware, data modernisation; application consolidation / stacking
AIX to Linux
Oracle to SQL; SQL to Aurora
Middleware, IBM products
Any custom application change
Complex / Highly complex application migration
Re-Purchase
• Customer wishes to use available SaaS offerings to replace on-premise On-premise CRM to SaaS CRM
On-premise thin-client to WorkSpaces
On-premise Exchange Server to WorkMail
R1
R2
R3
R4
R5
R6
ApplicationModernisation/ChangeEffort

Author:
Author:
mario@amazon.com
Discovery of Data Points – Six R’s
Pattern
Label
Migration Pattern
Name
Pattern Description Examples
Retain
• Customer will keep host / application in their source environment
• Minimal analysis/validation of scope and application affinity
• Dependency on integrating service management
Unresolved Physical Dependencies
Mainframe/AS400
Non x86 UNIX Applications
10%
Retire
• Application and host decommission on source
• No migration to target
• Application owner approvals needed
Existing Decommission Program Scope
UNIX, AIX, SCO;
Clustered host for DR, alternative HA hosts
5%
Re-Hosting
• Like for Like application migration to AWS
• Minimal effort to make the application work on AWS (Minor application changes)
• UAT - Some level of application testing
Simple to Medium V2V, P2V
Storage: Local to DASD
RHEL 6 above
Win 2008 above
40%
Re-Platform
• Up-Version of the OS and/or Database onto AWS
• Some level of application changes
• Application reinstallation on the target
• UAT is highly recommended
• Database to AWS RDS
W2K3 to Win 2012; Win 2008 below; RHEL
below; Oracle 8 to 11; All databases
New application releases
All clusters (MS cluster, DR)
MS SQL same technology (RDS)
30%
Re-Factoring
• OS and/or Database porting
• Middleware and application change to AWS
• Data conversion; Database transition to MySQL, Aurora, etc.
• UAT required; HPC Grid, No ITIL
• Application architecture changes may also require Up-Version or Porting
• Middleware, data modernisation; application consolidation / stacking
AIX to Linux
Oracle to SQL; SQL to Aurora
Middleware, IBM products
Any custom application change
Complex / Highly complex application
migration
10%
Re-Purchase
• Customer wishes to use available SaaS offerings to replace on-premise On-premise CRM to SaaS CRM
On-premise thin-client to WorkSpaces
On-premise Exchange Server to WorkMail
5%
R1
R2
R3
R4
R5
R6
ApplicationModernisation/ChangeEffort
70%

Author:
• Application maintenance costs
• Innovation / ongoing development / bug fixes
• Managed service organisation
• Licensing landscape
• Licenses in place
• Transferability of licences
• Upcoming licence renewals
• HA / DR / SLA’s

Author:
Discovery of Data Points - Migration
Migration Costs
We need to establish the costs of migrating your workloads. This will be
based upon which ‘R’ the workload falls into.
• Planning and designing migration
• Development effort
• Testing effort
• Acceptance effort
• Deployment effort
• Landing zone configuration
• Licensing
• Data migration
• Cut over
• Roll back plan
• Duplicate environment
• Training and certification

Author:
Author:
mario@amazon.com
Disconnected
and Incomplete Data
Asset
Inventories
CMBD
Tribal
Knowledge
SLA/OLA
App
Configuration
Data
Performance
Information
Architecture
Outcomes
Cost Model
Migration Patterns
Resource Model
Project Plan
Business Case
Gathering Data and Organising
“Discovery & Planning”
AWS Application
Discovery Service
Applications
Infrastructure
Performance

Author:
Migration Velocity
The speed of your migration to AWS will directly affect the size (cost) of the
Migration Bubble. Creating a migration rhythm will drive the entire business
to work to achieve the migration.
• Identify which apps can move most easily
• Create prioritised move groups
• Organise in sprints and sprint teams for fast results
• Be able to forecast the entire project timescale
• Create a high-level multi-year/month project plan
• The migration should be fast paced and demonstrate a commitment to
migrating the workloads because of its velocity

Author:
Author:
mario@amazon.com
Application Prioritisation Drivers
Organisational Drivers (Cost, Risk, Time)
Application Drivers
Business
Criticality
Application
Complexity
Environment Infrastructure Transaction Load
Frequency of use Resource Utilisation
Scalability and
Performance
Size of Servers
Number of Servers
File Systems
Database
Storage Volumes
Test, dev, UAT,
staging, acceptance,
prod
Security and
Compliance
Supported business
process and impact
Size of user base
End of life; end
of life support
Technology stack
Application architecture
External interfaces
Inter-dependencies

Author:
Due Diligence
Migration Costs
CFOs are outcome orientated whereas AWS messaging tends to be tech
and solutions oriented. Before deep diving into solutions, tech and cost
benefit analysis, we will take a step back and get agreement on what the
customer wants to achieve and why. We will then:
• Generate a statement of the problem to solve and ideal outcome in non-
technical language
• Facilitate agreement on objectives and ownership
• Conduct a decision readiness assessment from customer perspective
and AWS perspective
• Review IT Risk Register and tie in cloud
• Conduct a business risk survey with a heat map
• Obtain agreement on decision aspects, options and their scores
• Build a decision analytic model for comparing additive utility scores

Author:
Current Budget Review
Current Budget Review
The data points we collect are collated into a budget statement which will
present back to you the run rate cost of your current workloads. Key points
of review:
1. Planned capital expenditure
2. Monthly operations budget
3. Depreciation / amortisation
4. Overall budget review
We will seek your sign off of the budget statement as accurate in order for
us to be able to use it as a baseline for the business case comparison.

Author:
Business Case Preparation
Business Case Preparation
Following sign-off of the budget statement, AWS will set about creating the
business case:
1. Review all data points
2. Licence review and future state forecast
3. Instance right-sizing
4. Higher-level service review
5. Total cost of migration modelling
6. Total cost of operation modelling
7. Cost optimisation modelling
8. Final business case reviews
9. Executive summary
10. Backing data

Author:
Business Case Presentation
Business Case Presentation
AWS will present the executive summary to the customer along with the
backing data. Using this information, the customer will be able to develop
the business case for a wider range of workloads than those considered by
the business case.

Author:
Example Business Case

Author:
mario@amazon.com© 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
AMAZON CONFIDENTIAL
Mario Thomas, Professional Services
31 March 2017
The Business Case for AWS
Business transformation through migration to the cloud

Author:
Executive Summary
• AWS would like to thank The Bank for its engagement to date
• Working with you and our Partner this week we have prepared a high-level business
case for the adoption of AWS for the in-scope applications.
• We have considered the migration cost as well as the operations cost of the
applications in our model to arrive at a financial benefit statement.
• We have also considered the business value benefits of the migration to The Bank to
arrive at an economic benefit statement.
• Our expectation is that the detail will be refined as we continue to work closely
together, with the ultimate objective of a model that can be owned by The Bank to
drive a business decision for the migration to get under way.

Author:
Executive Summary
• Financial Benefits
• Migrating to AWS is 27% more cost effective than migrating to an on-premise environment.
• Operating on AWS is 51% more cost effective than operating in an on-premise environment.
• Overall, AWS is 49% more cost effective than on-premise and saves The Bank $47,699,084.
• At the end of the three year period The Bank may need to refresh hardware at a cost of at least
$29,468,726 (assuming 20% growth in capacity requirements over 3 years).
• Economic Benefits
• Migrating to AWS will allow The Bank to begin deploying to the landing zone at least one year quicker
than on-premise (and could be as high as two years).
• Migrating to AWS will allow The Bank to avoid significant costs associated with building out capacity to
support the in-scope applications.
• The Bank would be able to ’refresh’ their AWS estate throughout the period thereby improving
application performance as instance family performance improves.
• The Bank would be able to choose the operating model to suit the skills available to them – AWS
Managed Services, an MSO or self-managed.

Author:
High Level Assumptions
• The Bank is facing the closure of its data centre and has two years to migrate
• Migration of workloads to The Bank owned/leased data centres or to AWS
• All development, production, DR and UAT workloads are in scope
• Pilot light DR is assumed in AWS
• 147 applications on 1532 servers in scope
• Migration is assumed over a 2 year period
• Operation is assumed over a 3 year period
• Assumes hardware is ordered in year 1
• Assumes a 3 year hardware lifecycle
• Assumes 3 year full upfront RI’s
• No internal ROCE for AWS or The Bank has been assumed
• Assumed equal cost of migration
• Assumes all data provided by The Bank to date is accurate

Author:
Establishing an effective business case for the
adoption of AWS for your application workloads
requires knowledge of how your organisation does
things now.
By understanding your existing on-premises or co-
location environments as well as the associated
ecosystems you will be able to lay the groundwork
for an effective business case.
Building the Business Case for AWS Adoption

Author:
Author:
mario@amazon.com
The AWS Stages of Adoption
At each stage of adoption:
• Project
• Foundation
• Migration
• Reinvention
Customers may opt to develop any and
all types of business case to establish
gating criteria to the next stage.

Author:
“What are the financial and economic benefits to
The Bank of migrating in-scope workloads to AWS
versus bringing those workloads into existing or new
The Bank operated data centre(s)?”

Author:
Author:
mario@amazon.com
Building the Business Case for AWS
Directional Business Case
High-level, designed for establishing direction for the Cloud
journey. Based on high-level data inputs +/- 30% accuracy.
Refined Business Case
More refined than directional, adds greater detail around
people, designed for confirming high-level business case.
Based on multiple data inputs +/- 10% accuracy.
Detailed Business Case
Deep-dive of multiple data points, designed for Boards to
approve adoption of cloud / reinvention of cloud. Highly
accurate +/- <1% accuracy.
✔
-
-

Author:
Author:
mario@amazon.com
Building the Business Case for AWS
Discovery
Current Budget
Migration Bubble
Business
Case
Preparation
Business Case
Collection of key data
points:
• People Costs ✔
• 3rd Party Costs
• Infrastructure
Costs ✔
• Application Costs
• Migration Costs ✔
• Current intangibles
Customer sign off of
current budget
review:
• Review of budget
by customer
• Customer to
confirm accuracy
• Budget used as
basis for
business case
• Principles of cost
optimisation
• Apply to TCO models
AWS prepare business case:
• AWS analyse data points ✔
• Multiple operating models
considered and presented
• Costs for future state included
• Comparative budgets included
• Cash flow forecast included
• Measuring value benefits of
the migration
TCO
Cost Optimisation
Outcome:
• A detailed business case that
addresses the considerations
• Multiple options for the operating
model
• Multiple options for the release
of existing costs
• Operating profit and loss (P&L)
statement for 1-3 years
• Cash flow forecast for 1-3 years
• Key changes in HR and MSO
contract
• Executive summary plus
detailed analysis
• Application discovery ✔
• Current costs of
applications
• Exit costs of migration
• Compare on-prem / co-lo
to cloud ✔
• Consider like-for-like
• Recalculate for six R’s ✔

Author:
Three Year Business Case

Author:
Author:
mario@amazon.com
Financial Cost Comparison
Item The Bank
Cost of Migration $4,437,150 $4,437,150 -
Cost of Operation Over 3 Years $46,210,704 $93,909,788 51%
Cost in Year $14,536,110 $19,853,865 27%
Cost in Subsequent Years $10,129,571 $19,669,388 49%
Total Cost Over 5 Years $50,647,854 $98,346,938 49%
Saving Over 5 Years on AWS $47,699,084
Annual Savings on AWS $9,539,817
Assumes 3 year full up-front reserved instances

Author:
Author:
mario@amazon.com
Economic Value Benefits
Value Benefits Specific to The Bank of adoption of AWS Cloud
No need to purchase for peak capacity ✔
No need to guess capacity for theoretical peaks ✔
No hardware obsolescence ✔
Refresh instances to new generation instances at any time ✔
Avoid stale servers sitting in racks while development takes place ✔
Reduce costs by turning off idle resources in any environment ✔
Avoid need to purchase duplicate disaster recovery infrastructure (17% of estate) ✔
Lower infrastructure management head count required for AWS vs. on-premise ✔
Provision storage for what is actually needed and not what could be needed ✔

Author:
Author:
mario@amazon.com
Economic Value Benefits
Value Benefits Specific to The Bank of adoption of AWS Cloud
Avoid pending storage refresh costs by moving backup to AWS ✔
Apps moving to AWS could provide younger hardware to those approaching EOL ✔
Design for resilience, failover and elasticity – avoid unecessary hardware purchases ✔
Improve application performance for customers through use of CloudFront ✔
Avoid maintenance costs for production kit not yet in use ✔
Reduce labour costs, recruitment costs and address skills shortage for infrastructure ✔
Rapid experimentation with no hardware lead times ✔
Shift to self service culture ✔
Ability to introduce DevOps/DevSecOps culture ✔

Author:
Further Optimisation
• Right-size proposed AWS compute instances based on application performance data
• Evaluate higher level services to replace self-managed services on EC2
• Evaluate licencing landscape to look for ways to decrease the licence burden
• Switch existing RHEL licences to Amazon Linux
• Migrate Oracle databases to Aurora – feasibility study
• Further cost savings with selected use of Spot Instances
• Transformation of workloads to use serverless technologies

Author:
Questions

Author:
Next Steps

Author:
Next Steps
1. Prepare Refined Business Case
• Review refined and detailed data collected this week
• Deep dive on the resource efficiency model and incorporate
• Review CAF assessment outcomes and incorporate
• Provide updated refined business case
2. Prepare Detailed Business Case
• Review application discovery data (automated and manually generated)
• Review financial data
• Provide final detailed business case

Author:
Thank you!

Author:
Lunch

Business Case for Cloud Migration

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