How Much Does a Cloud Migration Actually Cost?
Cloud migration costs range from €15,000 to €500,000+ depending on estate size, complexity, and target architecture. The wide range exists because most organisations only budget for the visible costs — compute and storage — while ignoring the hidden costs that account for 30–60% of total spend. This guide gives you a complete cost model so you can plan with confidence.
According to Gartner, 75% of cloud migrations exceed their original budget, and the primary culprit is poor upfront cost modelling. The good news: with the right framework you can forecast within 15% accuracy before a single server moves.
The Four Cost Categories of Cloud Migration
A complete TCO model for cloud migration must cover four distinct categories. Skipping any one of them leads to budget overruns.
1. Visible Infrastructure Costs
These are the costs most teams model correctly:
- Compute — EC2, Azure VMs, or GCP Compute Engine instances replacing your on-premise servers. Rule of thumb: start with equivalently sized instances, then right-size after 30 days of real usage data.
- Storage — Object storage (S3, Azure Blob, GCS), block storage (EBS, Azure Managed Disks), and file storage (EFS, Azure Files). Cloud storage pricing drops significantly with lifecycle policies.
- Networking — VPC/VNet costs, load balancers, CDN, and NAT gateways. Budget €50–€500/month per production VPC depending on traffic.
- Managed services — RDS, ElastiCache, SQS, and equivalent PaaS services that replace self-managed middleware.
2. Hidden Migration Costs
These are where budgets typically blow out:
- Data transfer egress fees — AWS charges €0.085–€0.09 per GB out to the internet. Migrating 50 TB of data can cost €4,000–€5,000 in egress alone, before any application traffic.
- Dual-run period — Running both old and new infrastructure simultaneously during cutover typically lasts 2–8 weeks. For large estates, this doubles your infrastructure bill during that window.
- Licensing changes — Microsoft SQL Server, Oracle, and IBM licences often need re-evaluation in cloud environments. Licence Included vs Bring Your Own Licence (BYOL) decisions can swing costs 40–60%.
- Application refactoring — Lift-and-shift is the cheapest migration pattern but often the most expensive to operate. Applications designed for bare metal often waste 3–5x cloud resources without refactoring.
3. People and Process Costs
Frequently underestimated, often the largest single line item:
- Internal engineering time — Estimate 20–40% of your engineering team's capacity for 3–6 months on a medium-complexity migration. At European senior engineer rates of €80,000–€120,000/year, that's a real number.
- External consultancy — Professional cloud migration services typically cost €800–€1,800/day for senior architects. A well-scoped engagement saves money overall by avoiding costly rework.
- Training — AWS/Azure/GCP certifications for your operations team run €300–€1,500 per person. Budget for 3–5 people minimum.
- Tooling — Migration tools (CloudEndure, AWS Application Migration Service), monitoring (Datadog, New Relic), and security (Prisma Cloud, Wiz) add €500–€5,000/month.
4. Post-Migration Operational Costs
The ongoing cost structure changes fundamentally after migration:
- FinOps function — You need someone watching cloud costs. Either a dedicated FinOps engineer or a tool like CloudHealth/Apptio (€1,000–€5,000/month for mid-size companies).
- Support plans — AWS Business Support starts at 10% of monthly spend (minimum €100/month). For production workloads, this is non-negotiable.
- Backup and disaster recovery — Cloud backups via AWS Backup or Azure Backup add 10–20% to your storage bill but are essential for compliance.
Cloud Migration Cost by Company Size
Use these ranges as a starting point, then build your specific model:
| Company Size | Infrastructure Scope | Migration Cost Range | Timeline |
|---|---|---|---|
| Startup / SME | 5–20 servers, 1–3 apps | €15,000–€60,000 | 4–8 weeks |
| Mid-Market | 20–100 servers, 5–20 apps | €60,000–€200,000 | 3–6 months |
| Enterprise | 100–500 servers, 20–100 apps | €200,000–€500,000 | 6–18 months |
| Large Enterprise | 500+ servers, 100+ apps | €500,000+ | 18–36 months |
How to Calculate Your TCO: A Step-by-Step Framework
Follow this five-step process to build your migration cost model:
Step 1: Inventory Your Current Infrastructure
You cannot model what you cannot measure. Run a discovery scan using AWS Migration Hub, Azure Migrate, or open-source tools like Netdata to capture:
- CPU, RAM, and storage for every server
- Peak vs average utilisation over 90 days
- Network traffic between servers (critical for egress cost modelling)
- Application dependencies and communication patterns
Step 2: Choose Your Migration Pattern per Workload
Not all workloads should be migrated the same way. The 6 Rs framework helps categorise each application:
- Rehost (Lift & Shift) — Move as-is. Cheapest to migrate, most expensive to operate long-term.
- Replatform — Minor changes to take advantage of managed services (e.g., move from self-managed MySQL to RDS). Good balance of cost and effort.
- Refactor/Re-architect — Rebuild for cloud-native patterns. Highest upfront cost, lowest long-term operating cost.
- Repurchase — Replace with a SaaS alternative. Often overlooked but can eliminate entire workloads.
- Retire — Decommission applications that are no longer needed. Typically 10–20% of enterprise portfolios qualify.
- Retain — Keep on-premise for now. Regulatory, latency, or dependency reasons may require this.
Step 3: Size Your Cloud Resources
Use the AWS TCO Calculator, Azure TCO Calculator, or GCP Pricing Calculator to estimate running costs. Key inputs:
- Provisioned vs actual utilisation (use your Step 1 data, not provisioned specs)
- Reserved Instance discounts (1-year: 30–40% off, 3-year: 50–60% off on-demand)
- Savings Plans (AWS) or Committed Use Discounts (GCP) for flexible workloads
- Spot/Preemptible instances for batch workloads (up to 90% savings)
Step 4: Model the Transition Period
Calculate your dual-run cost: (monthly cloud cost + monthly on-premise cost) × transition months. For a typical mid-market migration with a 6-week parallel run, this adds €15,000–€40,000 to the total budget.
Step 5: Calculate 3-Year TCO
Compare total 3-year costs: (migration cost + 36 × monthly cloud operational cost) vs (36 × monthly on-premise cost including hardware refresh cycles, maintenance contracts, data centre rent, and staff).
In our experience working with European companies through cloud migrations, the 3-year TCO for cloud is 25–45% lower than equivalent on-premise infrastructure when the comparison is done honestly — including all hidden on-premise costs.
Cloud vs On-Premise: An Honest Cost Comparison
On-premise costs that organisations routinely forget to include in comparisons:
- Hardware refresh — Servers have a 3–5 year lifecycle. Replacement cost is €5,000–€25,000 per server.
- Data centre costs — Rent, power, cooling, and physical security run €500–€2,000/rack/month in European co-location facilities.
- Maintenance contracts — Dell, HP, and Cisco hardware support typically runs 15–20% of hardware cost per year.
- IT operations staff — Someone has to manage physical infrastructure. Cloud shifts this burden to the provider for commodity infrastructure.
- Disaster recovery infrastructure — A secondary data centre for DR typically adds 50–70% to your infrastructure footprint.
Top 5 Ways to Reduce Migration Costs
- Retire before you migrate — Audit your application portfolio and decommission unused applications. Every application you retire saves migration effort, ongoing licensing, and cloud running costs.
- Use AWS Graviton / Ampere instances — ARM-based instances offer 20–40% better price-performance than equivalent x86 instances for most workloads.
- Commit early with Reserved Instances — If you know your baseline compute requirements, commit to 1-year Reserved Instances from day one. The discount pays for itself in month 4.
- Automate environment shutdown — Development and staging environments don't need to run 24/7. Auto-shutdown after business hours reduces dev environment costs by 60–70%.
- Migrate data via Direct Connect / ExpressRoute — For large data sets, using a dedicated network connection eliminates egress fees entirely. AWS Direct Connect costs €0.030/GB vs €0.085/GB over the internet.
What Our Clients Achieve: Real Numbers
Across migrations we've led for European companies, the outcomes cluster around consistent ranges:
- Infrastructure cost reduction: 30–55% within 12 months of migration
- Deployment frequency increase: 3–10x when combined with CI/CD implementation
- Mean time to recovery (MTTR): 80–90% reduction with proper monitoring and IaC
- Engineering time on infrastructure: 60% reduction with managed services adoption
If you're ready to build your specific migration cost model, read our guide on reducing AWS costs by 40% for post-migration optimisation strategies, or contact us for a free migration assessment — we'll give you a scoped cost estimate within 5 business days.
Frequently Asked Questions
How long does a cloud migration take?
Small migrations (under 20 servers) take 4–8 weeks. Mid-market migrations typically run 3–6 months. Enterprise migrations with 100+ applications are 12–24 month programmes broken into waves.
Should I migrate everything at once or in phases?
Phased migration is almost always the right approach. Start with non-critical workloads to build team confidence and refine your runbook. Never migrate your most business-critical system first.
What's the biggest mistake companies make in migration budgeting?
Treating it as a pure infrastructure project. Failing to budget for application changes, team training, and the 2–3 month learning curve on cloud operations leads to the majority of budget overruns.
