Over the next three articles, I’ll discuss the individual components of each solution designed to bust the migration bubble. To recap, the migration bubble describes the duplicative cost associated with operating on-prem data center infrastructure while building, testing, and ultimately migrating applications to AWS’ public cloud platform. The journey to full cloud adoption could take years. The migration bubble expense often skyrockets to mid six-figure expenses and sometimes eclipses a seven figure number. The first step to busting these migration bubble expenses starts with an asset lifecycle management strategy focused on divesting the current data center estate.
Investments in the data center leave companies with tremendous technical debt and with few options to reset their technology strategy, as asset values rapidly decline. With depreciation schedules averaging 5 years, CFO’s often prevent transformation until all systems are fully depreciated. A divest strategy designed to monetize these assets before beginning the migration provides an injection of capital. This capital can be used to either write down hardware book value on the general ledger or it can be repurposed to fund the migration for fully depreciated assets. More importantly, this use case is agnostic to a company’s vertical market, revenue size, etc., essentially making it a relevant data center exit strategy for virtually any company owning its own hardware.
Below are a few of the most effective scenarios we’ve implemented at companies across the globe on behalf of AWS adoption:
- Purchase / Lease Back
- Eliminating capital debt through a purchase, then structuring an operating lease to run in parallel to your migration schedule. CapEX vs OpEx
- Full Value Recovery – get real money for excess hardware
- Monetizing duplicative hardware before it retires
- Deinstallation service, on-demand
- Increase recovered value when migrating faster than expected and disposing on-demand by serial number
- Data Sanitization
- Ensuring a single chain of custody for assets hosting sensitive data, then erasing that data either on-prem or at our facility
Regardless of whether if your journey is across the entire continuum of your global data center estate or if you’re looking at a subset of a single segment in a smaller environment, an IT Divestment strategy aligns the goals of your finance team with the leadership in IT — which is almost always a recipe for a winning project.