TNT Cloud Migration: Cost Savings and Challenges

No story convinces like a personal one.  As president of The Network Team, I knew that my leadership was contingent on practicing what I preach and what I ask our team to preach.  Here is our story of our cloud migration.  Since the story isn’t done, it represents a great, real time dialog and I want to connect with some of the fears that nearly everyone has when they think about giving up control.  This is a case study that isn’t finished.

TNT is a sub-20 employee IT Services Provider.  We sell other people’s boxes and software, and we do a lot of work to optimize and customize the offering for each of our customers.  We operate as a virtual, non-brick-and-mortar (NBAM) company and our motto is, “work is a thing you do, not a place you go.”

TOOLS WE USE:

We created technology for internal use that allowed us to efficiently operate.  We had Citrix for application delivery of all our killer business applications.  We had a Microsoft Exchange Server, setup to synchronize with all our IP phones and tablet devices, so email was portable.  We used a pure Cisco Unified Communications Platform (the same one we sell and maintain for our customers) and we had a backup appliance that kept our data safe.  We had a firewall, a voice router, a couple of switches, a couple of servers (all running Microsoft Products, of course), a Storage Area Network, and a LOT of programs, most of them used once in a blue moon.

COST BEFORE CLOUD MIGRATION:

  • We purchased our equipment at a huge discount, and we kept our boxes up and running always by paying ~$1000 a month to a data center provider in Charlotte, NC.
  • We used approximately $500 a month in backup and disaster recovery services.
  • We paid $300 a month for telecom services for our voice technology, in addition to $600 a month for cell phone services for our team.
  • We spent $35,000 on a custom piece of software that integrated quoting, project management, time and billing and reporting, and it ran on a Citrix platform that everyone accessed.  Although the software was free for us as partners, it required approximately 3-man weeks to build it and debug it, and it still requires a few man days a year to maintain.
  • Occasionally, we purchased maintenance contracts for our equipment, but typically avoided this until we HAD to.  We used spare boxes in the event of failures.  The total cost of these contracts amounts to $1000 a year.
  • We had a cloud CRM system to creating and tracking our sales and marketing efforts, and this product was a rental service that cost us $5000 a year.  It also required about 2 weeks a year (this is a guess) of our marketing director’s time to learn to use and debug issues as they came up.  It was proprietary and didn’t integrate with our other tools.
  • Finally, we have a subscription to a service that keeps our SharePoint file structure available, pain free, as a shared drive, and that costs $720 a year.

THE JOURNEY of our Cloud migration

The first technology we dumped in our cloud migration was email.  We moved all our mailboxes and associated services (archiving, backup, spam filtering, et al), to Office 365.  The monthly cost for us, as a Microsoft Partner?  $0.

The second item we dumped was our internal time tracking system.  Although we had no real ongoing costs with the product after the initial outlay, it required multiple man weeks a year of effort to maintain.  In addition, it wasn’t consistent in operating as it was designed.  Since it was proprietary code, there was no support package that we could buy to help us when things broke.  We replaced it with ConnectWise.  ConnectWise was and is most attractive to us, in that it integrated with all of the other tools that we have come to know.  ConnectWise costs us $500 a month for all our user fees, and I imagine that will go up, incrementally, as more users are added to the system and our company grows. That said, there is no server or data center to maintain, no backup to message, no upgrades to perform.

We moved the two remaining applications that we require (Quickbooks for Accounting and Quotewerks for quoting) into the Microsoft Azure Cloud.  Although these are still software packages that we buy (less than $1000 a year for both), the hardware and operating systems that they run on are now someone else’s problem.  We run both on one server that we can expand as needed, and we back it up, in real time, inside of Azure.  This saves us the $500 a month in backup services, as well as removing any time required for TNT engineers to abandon work at a customer’s location to maintain our network.  As a partner, we get Azure credits to offset our usage.  Last month, the bill was $27 for the server and all the apps running on it.  I anticipate that number will stay steady at less than $50 a month for the foreseeable future.

ConnectWise will also double as our CRM platform and our primary marketing platform. The incremental cost of this is $50 per month.  This cuts the $5000 a year number down to zero.  Our monthly ConnectWise bill will go up by $50, though.

We can also decrease the size of our data center, as now we will only be hosting our Cisco Powered voice network that we use internally and resell to our customers.  The currently best quote we have is $414 a month, and we will probably take that.

We will keep our SIP trunk provider and their $300 a month number, as we are still under contract with them.  They have historically provided us with good service…even though our main number is down, even as I type this.

We will migrate all our file services to the cloud.

The Difference:

Our hard costs will go from $26,820 a year to $25, 768 as part of this cloud migration.  That is only a $1000 difference (~3%)  However, our soft cost in terms of time spent on internal tools goes from $21,800 a year to $2,600 a year.  When I combine the total “before” cost of $48,620 a year to the after cost of $28,368 a year, the picture justification becomes more palatable.

In Summary:

We remain at the mercy of the public Internet in either model, as do our customers.  We also have the one-time cost associated with the migration and the internal loss of time that each employee will experience as they learn the modern technologies.  That said, we encourage our customers to consider a cloud migration, so it is only logical that we demand it and expect it of ourselves in the process.

I will be using these savings to pay employees addition compensation (they have earned it!) and grow the business.


For Further Reading:

5 Considerations before moving servers to the cloudcloud migration

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