Team Cloud Migration

Estimating Costs and ROI for an Atlassian Cloud Migration

July 2, 2024
Praecipio

Transitioning to the cloud has become a priority for businesses aiming to remain competitive in a fast-paced market. Besides the $3 trillion at stake for those that adopt the cloud by 2030, key drivers for this shift include cost reduction, enhanced efficiency, scalability, and the growing necessity for remote work capabilities.

While the benefits of the cloud make migrating seem like a no-brainer, many organizations are hesitant because of the price tag attached to cloud migration. At first glance, the cost of migrating to Atlassian Cloud can cause sticker shock, but when you do the math, the investment pays off through significant cost savings over time. 

Atlassian Cloud vs. Data Center: Which Is The Better Investment?

Even beyond the Atlassian ecosystem, organizations are experiencing significant returns on investment with cloud adoption. Nearly 80% of IT professionals said they have saved money, seen more productivity, and experienced better security since moving to the cloud. 

Deciding between Cloud vs. Data Center might seem straightforward, but it’s a nuanced decision process that ultimately depends on what works best for your business. When comparing the monthly subscription costs of cloud services with the one-time payment for Data Center licenses, Cloud seems more expensive. Plus, when you add on the cost of migrating, the cloud looks like a bigger investment. 

However, this limited viewpoint doesn’t account for the long-term benefits. The process of moving to the cloud is a one-time expense, and the long-term costs of self-hosted installations often exceed those of cloud services.

The process of moving to the cloud is a one-time expense, and the long-term costs of self-hosted installations often exceed those of cloud services.

According to a report from Forrester Consulting, organizations that migrated to Atlassian Cloud realized a 155% return on investment and saved $1.79 million over three years, with a payback period of only 6 months.

Let’s look at other ways cloud migration can save you money over time.

Five Ways Atlassian Cloud Helps You Achieve Long-Term Financial Benefits

1. Minimize Downtime Costs 

In today’s world, if your site is down or performing slowly, you’re losing revenue and possibly customers. Research shows that unplanned downtime costs Global 2000 companies $400 billion annually, which equates to about 9% of their profits. 

Migrating to the cloud can significantly cut downtime-related expenses, providing your company with the speed, security, and responsiveness your customers expect. With built-in redundancy, automatic failover mechanisms, and real-time monitoring, Atlassian Cloud minimizes the risk of downtime and quickly addresses any potential issues before they impact operations. Plus, with a guaranteed 99.95% uptime, you can achieve data resiliency and keep your business running smoothly in the cloud.

2. Lower Operational and Physical Costs 

Self-hosted solutions come with hidden costs, such as server maintenance and software license renewals. Migrating to the cloud eliminates these expenses and offers a scalable way to manage your resources. No more throwing money at outdated hardware or expanding your physical space just to keep up with growth.

Plus, cloud services simplify the licensing management lifecycle. Cloud services offer subscription-based models that provide greater flexibility, allowing you to pay for only what you use. Considering that the average company spends $135,000 annually on unnecessary software licenses, Atlassian’s pay-as-you-go cloud model aligns costs with actual usage, which helps you avoid paying for Data Center licenses that may go unused. 

3. Ease Workloads for Your IT Teams

There is a long list of routine tasks to manage a data center instance, from hardware upgrades to security patches and system monitoring. Atlassian handles these responsibilities in the cloud, freeing up your IT teams to focus on strategic initiatives and innovation.

For instance, research from Forrester found that developers experienced a 20% increase in productivity with Atlassian Cloud. Instead of being bogged down by repetitive tasks, they improved collaboration and focused on creating better products for customers. 

The same Forrester report noted that other IT team members also saved time after their organization migrated to Atlassian Cloud. By having Atlassian take over maintenance and security responsibilities, IT teams could reallocate 50% of their time to more critical work that drove business growth.

4. Save on Scalability

One of the biggest perks of Atlassian Cloud is its on-demand resources, which let businesses scale IT infrastructure up or down as needed. This means you don’t have to make a big upfront investment for infrastructure that might sit idle for most of the year.

Traditional data centers require you to predict your future computing needs, which often leads to over-provisioning or scrambling to add capacity during peak times. Cloud platforms, on the other hand, let you adjust your resources on the fly without the hassle and cost of buying and installing new hardware.

5. Reduce Your Carbon Footprint

Beyond the workplace benefits, moving to the cloud helps businesses operate more sustainably. Cloud providers make the most of their resources through multi-tenant architectures, letting various customers share the same physical hardware. This setup reduces electronic waste and lowers the environmental impact of producing and disposing of IT equipment.

Providers like AWS invest heavily in energy-efficient technologies and renewable energy sources, significantly lowering carbon emissions linked to data storage and processing. AWS infrastructure is up to 4.1 times more energy efficient than on-premise solutions and can reduce the carbon footprint of workloads by up to 99%.

It just so happens that Atlassian Cloud products are hosted on AWS. So, if you are on Atlassian Cloud, you're not only reducing your energy consumption but also supporting global sustainability efforts.

How Do I Calculate The ROI of Migrating to The Cloud?

Use this simple formula to estimate your ROI when migrating to the cloud:

(Profit/gain from migration investment - migration investment) ÷ (migration investment) = ROI

Let's say you spend $75,000 to switch from Data Center to Cloud and save $75,000 each year after the migration. After three years, here's what the breakdown looks like:

($225,000 - $75,000 = $150,000) ÷ ($75,000) = 2

This means your ROI would be 200% after three years. During the first year, you would break even, and eventually, you would start to see your investment pay off after the second and third years. 

When taking on a big investment like moving to Atlassian Cloud, of course, you want to calculate your ROI, but we invite you to also ask yourself, “What is the cost of not investing?” 

Atlassian Cost Savings Calculator

Atlassian also has a great tool for calculating how much you would pay for its cloud platform. Start by selecting your products, choose your billing cycle, and input the number of users to get a tailored pricing estimate:

Atlassian Cloud Migration pricing calculator

 

Cloud Migration Cost Savings Calculator

 

Tailor Your Migration Strategy to Your Cloud Journey

Understanding where your organization wants to be will help you determine the course of your cloud journey and implement a migration strategy that aligns with your business objectives.

If you want to avoid the most expensive migration mistakes and achieve the long-term financial benefits of the cloud, your best bet is to bring in an Atlassian Cloud Specialized Partner to guide you through the process. Praecipio proudly holds a 100% migration success rate, and our team can help you build a thriving cloud instance

Reach out to our team to help you determine costs, next steps, and what it will take to migrate your organization to Atlassian Cloud.

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