For many Data Center customers, Data Center relocation /migration is a once in a lifetime opportunity. The various decisions, teams involved, old and new vendors engaged, establishing a Data Center Relocation Cost Estimate, make this even more complex and challenging.
With the evolution of the cloud the decision-making complexities have even further widened as customers are seeing this not only as a Data center facility, but a part of a Hybrid cloud ecosystem. Even further, several are implementing core data center infrastructure functions by leveraging as-a-service models to deliver performance, security and agility at the right price point.
However, when considering a Data center relocation, one of the key decisions you have to select is your desired-end state for the data center migration among Consolidation, Relocation, and Colocation. Based on your choice, your Data Center Relocation Cost Estimate checklist will have line items for the costs of migrating the data center(s).
Desired End-State of a Data Center Relocation
| Consolidation | Reducing the number of physical data centers and/or the number of servers being used by merging one or more facilities or servers. |
| Relocation | Moving data center facilities from their current location to a new location. |
| Colocation | Moving some or all organization’s data center operations to a colocation service provider. (including, hardware & applications) |
High Level Steps in Making a Data Center Migration Plan
Five Reasons for Moving Data Center to a New Environment?
1. The number of disconnected systems and data silos is increasing: Growth in disconnected systems and data silos results in conflicting answers to key questions, added costs, and increased security risks
2. Your on-premises maintenance costs are increasing: Your system fees and services costs are increasing annually
3. Existing Data Center not scalable: Your existing data center provider is not able to scale up with lack of new space
4. You’re experiencing rapid and global company growth: International expansion, mergers, acquisitions, and divestitures lead to consolidating Data Centers
5. Existing Data Center provider shutting shop: Your existing data center provider is shutting shop and is constantly nudging you to migrate to cloud-based environments.
What is a Data Center Relocation Cost Estimate?
A financial document which estimates technical costs (e.g., technology, real estate, transportation) and business costs (e.g., retraining, downtime, time commitment of IT staff) to determine the migration budget in light of the desired end state and the selected site of the new data center.
Insights post discussions with senior IT Leaders unearthed that Budgeting, at this stage, should be less about getting to a single number and more about getting the right cost model in place with all assumptions documented. Incorporate a level of variance in the cost estimate budget to account for any changes or surprises during the project’s implementation and make adjustments to the budget as more information becomes available.
Build and present the business case to the leadership team (i.e., senior IT leaders, head of procurement, CFO, CHRO, head of legal), outlining the Data Center Relocation Cost Estimate, rationale and value proposition. Map migration objectives to business objectives to gain their approval and commitment.
Cost Heads in a Data Center Relocation Cost Estimate
Each of the desired-end state paths you choose will have an impact on costing differently. Based on your choice, your Data Center Relocation Cost Estimate checklist will have line items for the costs of migrating the data center(s) as below:
| CONSOLIDATION LINE ITEMS | RELOCATION LINE ITEMS | COLOCATION LINE ITEMS |
| Location Analysis Costs | Location Analysis Costs | Colocation Vendor Costs |
| Physical and Application Inventory Costs | Site Building Costs | Physical and Application Inventory Costs |
| Dependency Mapping Costs | Physical and Application Inventory Costs | Dependency Mapping Costs |
| Cost for Creation of Move Groups | Dependency Mapping Costs | Cost for Creation of Move Groups |
| Cost of Downtime | Cost for Creation of Move Groups | Cost of Downtime |
| Cost/Rent of Hardware for Swing Move | Cost of Downtime | Cost/Rent of Hardware for Swing Move |
| Moving Company Fee | Cost/Rent of Hardware for Swing Move | Moving Company Fee |
| Dismantelling Costs | Moving Company Fee | Dismantelling Costs |
| Packing and Labelling Costs | Dismantelling Costs | Packing and Labelling Costs |
| Truck Rental | Packing and Labelling Costs | Truck Rental |
| Reassembly and Installation Services | Truck Rental | Reassembly and Installation Services |
| Additional Security Costs (guards for day of move) | Reassembly and Installation Services | Additional Security Costs (guards for day of move) |
| Asset Decommissioning Costs | Additional Security Costs (guards for day of move) | Asset Decommissioning Costs |
| Migration Team- Internal Resources Costs | Asset Decommissioning Costs | Migration Team- Internal Resources Costs |
| Migration Team- External Resources Costs | Migration Team- Internal Resources Costs | Migration Team- External Resources Costs |
| Legal Fees | Migration Team- External Resources Costs | Legal Fees |
| Insurance | Legal Fees | Insurance |
| Other Vendor Expenses | Insurance |
One of the common pitfalls is that Organizations often try to exploit opportunities for rationalization, modernization, virtualization and cloud migration, along with the data center migration, leading to increased complexity and higher risk of migration failure.
How to solve this? Fix and Move, Don’t Move and Fix Ensure you have identified and implemented opportunities for rationalization, modernization, virtualization and cloud migration before starting migration planning.
It’s highly important to create a comprehensive data center migration cost estimate that accounts for downtime costs, people costs and costs for retraining redeployed staff, if any. A business case that includes business-focused metrics and potential benefits to the lines of business, in addition to benefits to IT. Senior leadership should have clear understanding and in principle approval of the importance of the data center migration.
Speak to our experts as we ensure first time right solutions with our 20 years of onprem and cloud migration expertise for complex ERP and High-Performance computing environments for leading companies around the globe.
