Understanding the Long-Term Cost Benefits of Cloud Migration

There are many business opportunities out there for motivated managed service providers (MSPs), resellers, and other technology partners. However, they need to constantly be on the lookout for innovative cloud solutions to help their customers optimize operations and reduce costs. It is a crowded, competitive market, and if you cannot offer your customers the latest solutions, your competitors will. 

Migrating customers to the cloud is one of the most impactful long-term changes you can make for your customers. The advantages may be obvious to technology experts but often are not as obvious to their business customers. 

Among SMB business leaders, on-premise to cloud migrations are often perceived simply as a cost-cutting measure. However, this view overlooks the broader array of long-term economic benefits that can significantly enhance the profitability and sustainability of an organization.  

Sometimes, skeptical customers just need a little nudge in the right direction and help see what is in their best interest. This article offers a straightforward exploration of the many financial and operational advantages of moving to cloud environments that MSPs and other partners can share with their non-technical customers. 

Shifting infrastructure from CapEx to OpEx 

Traditionally, on-premises IT infrastructure demands significant capital expenditure (CapEx)—the upfront investment in physical hardware, such as servers, storage systems, and networking equipment, and the costs associated with maintaining and upgrading these assets. This model requires business customers to understand future IT needs clearly. The on-premises infrastructure model also requires additional expenses in the form of real estate, power, cooling, and human resources needed for ongoing maintenance and management. 

In contrast, cloud infrastructure operates predominantly on an operating expenditure (OpEx) model. That means that companies pay for IT services on a subscription or pay-as-you-go basis, as regular old operational expenses. So, cloud migrations transform large upfront capital IT investments into predictable, recurring operational costs. This model aligns expenses with actual usage, offering a more flexible and scalable approach that can adapt to the business’s changing needs. 

‘Right-sizing’ expenses with pay-per-use payment structures 

The cloud is pay-as-you-go OpEx model not only lowers the barrier to entry for smaller businesses but also allows organizations of all sizes to optimize their spending in response to fluctuating demands. Your cloud customers will only pay for the computing resources they actually use, such as storage space, CPU cycles, or bandwidth, keeping their total costs low. You can scale their usage up or down based on current requirements, ensuring they are not overspending on idle resources. This ‘right-sizing’ of expenses is particularly advantageous for businesses with variable workloads or those experiencing rapid growth, as it allows them to adapt quickly without significant financial risks. 

This has some secondary benefits for your customers as well. It becomes easier for them to experiment with new projects without heavy upfront investment. They can quickly deploy or wind down resources as the project evolves. 

Optimized staffing 

Beyond the upfront hardware costs associated with maintaining on-premises IT infrastructure and legacy applications, businesses are also faced with the ongoing expense of employing a dedicated team of IT professionals. A legacy application migration to cloud can significantly reduce the need for an extensive in-house IT team, as the cloud service provider manages many of the technical responsibilities and maintenance tasks. This shift not only optimizes staffing requirements but also allows businesses to allocate their remaining in-house resources more effectively, potentially leading to considerable cost efficiency in comparison to the expense of maintaining a specialized IT team. 

Better data leads to better decision-making 

A migration from on-premises to the cloud significantly enhances data storage visibility by enabling better communication and interaction across different business areas. This heightened access to information across the organization facilitates faster and more informed decision-making—often in real time.  

Your customers can also integrate their cloud solutions with other enterprise systems for high performance gains. Data flows freely in integrated environments, which can lead to significant improvements in process optimization, data analytics, and customer engagement. 

Increased flexibility 

Cloud migration strategies provide scalable and on-demand resources that can be quickly adjusted to meet your customer’s internal business needs and those of their own customers. This flexibility is crucial for businesses to maintain a competitive edge, allowing them to rapidly deploy new applications and scale up or down based on demand without the lengthy procurement and deployment cycles associated with traditional IT infrastructure. 

With cloud services, teams can collaborate more effectively, accessing shared data and applications from anywhere in the world, which is particularly beneficial in today’s increasingly remote and distributed work environments. By leveraging the improved agility provided by cloud infrastructure, businesses can foster a culture of innovation and continuous improvement. 

Improved business continuity 

The cloud offers cost-effective security measures and disaster recovery. By adopting cloud services, businesses ensure that their applications remain accessible, available, and operational, even during power outages and emergency events while still getting consistent cost savings. 

It also provides more day-to-day operational continuity through features like one-click backup, recovery, and the option to strategically store backups across different geographical locations. Using cloud infrastructure also provides more regular hardware and software updates. And enterprise-grade cloud platforms offer tailored solutions to meet strict security and compliance standards, which is crucial for finance, healthcare, and public sectors.  

Partner with Stratos Cloud Alliance to build better long-term relationships with your customers 

We are the Microsoft Indirect Provider of the Year with extensive experience in the cloud migration process. Partnering with us, a proven indirect cloud provider who understands the Microsoft ecosystem end-to-end, can help you move your clients to Dynamics 365 Business Central and other Microsoft services more easily and effectively. 

Schedule a quick call today to learn how Stratos Cloud Alliance can help you get started with the CSP program today.