A TCO Calculator to Help You Understand the Real Cost of Your Database Migration

Database migrations are rife with horror stories of cost overruns. Cost overruns of 300%–500% are more common than you might think. (That most migrations fail to accomplish their objective is a different subject, and we need to talk about that as well another time). 

The real shocker, however, is that the actual cost could have been anticipated. And more important, if understood, you would choose a different approach to control risk and cost and not go with the conventional migration. 

What makes the cost assessment difficult is the complexity of the operation. A migration typically consists of many moving parts. Those become cost components in their own right. Until now, we have not seen a proper cost model published anywhere. Hence, we built one. 

In this article, we cover all primary contributing cost factors. Some of them are obvious; others are what you might call hidden costs. The broad categories are: (1) the cost of keeping the legacy system operational during the migration, (2) the necessary upgrades of dependent systems like ETL or BI system, (3) consulting and staffing, and (4) the cost of disrupting the business and opportunity cost. 

Armed with this Total-Cost-of-Ownership (TCO) calculator, you will be able to produce a solid estimate for your migration project. You will also understand why database virtualization is able to cut the total cost by up to 75%. 

Consulting cost 

In a conventional migration, existing SQL code must be rewritten or adjusted to work with the new destination system. For example, applications written for Teradata will not work on a modern cloud database. All SQL statements used in such an application need modifying. 

For large migrations, contracting with a system integrator is a standard procedure. Because SI’s are already present in those enterprises, it seems like a natural thing to entrust them with the rewriting of applications. 

The consulting cost is often the most visible cost component in any migration. For large systems, SI fees may run into the tens of millions. For exceptionally large projects with Fortune 100 organizations, they often exceed $100m. 

Based on billable hours, SI engagements are notorious for delays and cost overruns. Some argue that overly optimistic estimates are critical to secure the deal in the first place. Realistic estimates, so they reason, would scare their customers. 

Database virtualization eliminates this entire cost component. Large scale rewrites are unnecessary. This takes 30%–40% of the total migration cost off the table. 

Keeping the legacy system operational 

While migrating, the legacy system remains the primary environment for all or most workloads. Only after the last workloads have moved off, can the legacy system get decommissioned. Until then, it chugs along and racks up considerable keep-alive cost. 

Because keep-alive cost has been such a long-standing expense, it is often overlooked. The annual cost gets grandfathered into every new budget. Your legacy vendor is certainly banking on that effect. 

Not surprisingly, keep-alive is a function of, well, how long you must keep the legacy system alive. The longer the migration takes, the higher this cost climbs. Any delay in your migration which entails significant cost on its own is magnified and penalized by the keep-alive cost. 

With database virtualization, the migration time is 60%–80% reduced and so is the keep-alive cost. 

Upgrading of dependent systems 

This cost component often comes out of left field. It’s the most surprising and, hence, most underestimated cost. And yet, it is a considerable component in every migration. 

To move from a legacy system to a modern cloud system you must upgrade ETL, BI, and reporting systems. In short, every software that has used the legacy system may require an upgrade before it can function with the new destination. 

For example, an ETL system may well predate the database system to which you want to migrate. Thus, the organization needs to undergo a complete upgrade of the ETL system and bring it up to the latest version, even still on the legacy database. 

You may want to upgrade these dependent systems at some point in the future. But right now, when you’re trying to pull off a migration, it is just the worst possible time. Not only is it a terrible distraction, but it also adds considerable cost to the migration. 

With database virtualization, the picture changes fundamentally. Your dependent applications continue to function as-is. Even your ETL system continues to work on the new stack.  

Disruption to the business 

And finally, there is the cost of disrupting the business. Conventional database migrations require the business to pause, adopt new tools, or even rewrite their reports. Because the load is distributed over so many members of the team, it is often hard to quantify its cost. 

Anybody who’s ever been part of a migration project that concerns a central infrastructure component knows what it means. For weeks if not months, the business wastes precious time on preparing and cleaning up their processes for the long-awaited cut-over. 

But things can get a lot more complicated. If the workload must comply with regulations, the migration can trigger a re-certification. In this case, the business may get bogged down for months proving the new stack is compliant. 

Here is where database virtualization truly shines. Because applications continue to work seamlessly with the new stack, the business does not skip a beat. This property of database virtualization is the biggest surprise for our customers. You can read about it here, here, and here. 

Determine the TCO before you move 

Database migrations are a critical element of the business cycle. They drive the rejuvenation and re-invention of the business. Without them, enterprises fall behind and lose their competitive edge. 

The entire database market of approximately $50bn currently still on premises will be migrated to cloud-native systems. Each one of these transformations will hinge on a well-executed database migration. 

Independent of what pundits say, most enterprise infrastructure, including databases, is still on premises. Thus, over the next years, database migrations will become even more important than they have been in the past. 

If you are currently faced with the business requirement to migrate from a legacy system to a modern cloud database, you must understand the costs. We have developed a detailed TCO calculator that analyzes everything from keep-alive to dependent upgrades, from consulting and staffing costs to cut-over. 

To try our TCO calculator contact your cloud vendor representative or contact us at sales@datometry.com. We look forward to demystifying the cost of database migrations for you!