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Demystifying Cloud Migration: Why, When, and How to Migrate to the Cloud
Jan 21, 2025
21 mins read
Inna Fishchuk
Market Data Analyst
Deloitte states that 9 in 10 companies view cloud technology as a critical driver for growth, digital transformation, and competitiveness in the marketplace. And it’s easy to see why. Cloud has become a catalyst for business transformation by allowing companies to innovate faster, scale easily, and adapt to changing market demands.
The pace of cloud adoption continues to accelerate. The 2024 Cloud Computing Study found that 63% of IT decision-makers sped up their cloud migration efforts over the past year. This is a 6% increase from last year and back to migration rates seen in 2022. The reasons behind cloud migration vary between small and large companies, but they all point to one thing: a need for greater agility, efficiency, and resilience in today’s competitive landscape.
This article will explore why, when, and how to migrate your software to the cloud. But first, let’s clarify what cloud migration involves.
What is Cloud Migration?
Cloud migration is a set of distributed activities that aim to transfer a company’s digital assets, such as data, applications, and IT resources, from on-premises servers or one cloud provider to another cloud environment.
Cloud adoption ambitions remain high among small and large companies that, till now, have been renting virtual machines or operating on-premises data centers. For instance, McKinsey’s survey among 80 enterprises showed that more than two-thirds aspire to run 80% of their systems in the public cloud within five to seven years.
Many companies are viewing cloud migration as merely a basic IT optimization tactic. But there’s a big difference between migrating to the cloud and using it to drive organizational success.
Why Migrate to the Cloud?
Your cloud migration has a destination, but it isn’t the cloud. The 2024 Cloud Computing Study highlights the main reasons companies are migrating to the cloud:
34% want to strengthen security and governance
33% aim to improve scalability
29% want to accelerate the adoption of advanced technologies like AI and machine learning
Another side of the coin lies in the potential financial impact of the cloud. McKinsey estimates that cloud could generate up to $3 trillion in EBITDA (earnings before interest, taxes, depreciation, and amortization) by 2030. However, to unlock this value, you should move to the cloud with a clear strategy, understanding where you’re heading and why.
Benefits of cloud migration
When done strategically, cloud migration allows you to host applications and data in the most effective IT environment possible, based on cost, performance, and scalability factors.
Here are several advantages you can get by migrating to the cloud.
Benefits of cloud migration
Easy scalability. The cloud scales up or down based on demand. For enterprises, this means they can support massive data loads and spikes in usage without sinking money into hardware they might only use occasionally. They get the performance and capacity to handle big projects or seasonal traffic surges without overcommitting on infrastructure. When demand drops, costs drop too, because you’re only paying for what you use.
No upfront investments. For startups and SMBs, the cloud eliminates the need for costly, upfront investments in infrastructure. Instead of committing to expensive servers and hardware, they can pay as they grow, allocating resources only when needed. This pay-as-you-go model provides the financial flexibility to focus on innovation and growth without being weighed down by infrastructure expenses.
Simplified IT resource management. Cloud providers handle hardware, infrastructure, and maintenance, so companies don’t need to buy, install, or manage their servers. For enterprises, this shift reduces operational complexity since they no longer need to maintain costly data centers or handle complex hardware upgrades. For smaller businesses, the cloud simplifies resource management by allowing them to host all the services under one roof.
Efficient IT spending. McKinsey states that the cloud allows businesses to do 5x more than they could by merely reducing IT expenses. Accenture proves that moving workloads to the public cloud leads to savings in total cost of ownership (TCO) of 30-40%. For large organizations, cloud cost savings span from avoiding the capital expense of buying, housing, and maintaining hardware. For SMBs, the cloud turns costly, complex systems into affordable services with no need to invest in hardware.
Built-in security and compliance. More than 6 in 10 C-Suite executives and policy maker respondents of Oracle’s Security in the Age of AI survey cite security as the top benefit of cloud technology. The reason is that leading cloud providers like Azure and AWS include security features and compliance protocols as part of their service. This means that even without a large IT budget, small businesses gain access to data encryption, automatic backups, and routine security patches that might be too complex or costly to handle on their own. It might also benefit many enterprises (except those operating under stringent regulations) since they don’t have to worry about constantly tracking every regulatory change or updating their systems to stay compliant.
Data analytics and insights. Deloitte states that 86% of companies use cloud services for their data analytics capabilities. By analyzing structured and unstructured data, large companies can predict market trends, enhance customer experiences, and make data-driven strategic decisions. Meanwhile, SMBs can benefit from actionable insights, such as identifying new growth opportunities or optimizing daily operations without needing massive infrastructure investments.
Cloud computing benefits for organizations, statistics
Still, not all workloads are suited for the cloud for compliance, security, or other regulatory reasons. In some cases, on-premises might be a better choice in terms of control and predictability.
However, if you decide to move to the cloud, you should know your options.
Types of Cloud Migration
When companies move to the cloud, they often start with existing resources on physical servers or virtual machines. But they don’t necessarily always go all-in. Different cloud migration strategies reflect the primary state of the company’s infrastructure (so-called starting point) and the desired state or destination. Let’s take a look at the main types.
Types of cloud migration
On-premises to cloud migration
This is the traditional “lift-and-shift” approach, where data and applications are moved from an organization’s on-premises servers (often located in the company’s office or server rooms) to a cloud provider’s infrastructure. Moving to the cloud removes the need to maintain physical servers, which, in many cases, cuts costs and improves scalability.
Compared to enterprises, SMBs rarely have extensive on-premises data centers. Instead, they often rely on virtual machines hosted on local servers. Because their workloads are already virtualized, moving to the cloud is more straightforward—there’s no need to convert physical servers to virtual machines first.
Whatever the case applies to your company, you still have to choose the cloud provider first.
Don’t know which cloud provider to choose? Read our cloud provider comparison guide:
In a hybrid cloud setup, some data and applications remain on-premises while other resources move to the cloud. This option is popular among healthcare, telecom, financial companies or governments with complex IT architectures.
Strict legal and compliance issues within a particular industry may require a company’s sensitive data to stay within specific geographic zones or dedicated data centers. In that case, moving applications and data to public cloud platforms can potentially cause legal, security, and operational issues and financial losses.
As of 2024, 73% of enterprise respondents indicated that they had deployed a hybrid cloud. This approach allows them to enjoy the scalability of the cloud while keeping critical assets in-house or in a private cloud.
Hybrid cloud architecture example
Migration between cloud providers
This type of migration may include transferring data, applications, or services entirely or partially from one public cloud to another to avoid vendor lock-in, use better services, reduce costs, or use a multi-cloud strategy.
According to Statista, the adoption of multiple public cloud strategies has increased from 7% in 2022 to 14% in 2024. Yet, сloud-to-cloud migration isn’t as straightforward as it may seem. Each cloud provider has its unique infrastructure, configurations, and services, meaning that moving to a new provider usually involves reconfiguring or even rewriting parts of your applications. So whether you need to do AWS to Azure cloud migration or vice versa, you may face challenges that go beyond simply transferring data. Reconfiguring workloads, adjusting security protocols, and ensuring compatibility with the new provider’s services can be time-consuming and technically demanding.
Cloud-to-cloud migration can also lead to significant costs associated with transferring data out of a cloud provider (the so-called data egress charges), especially if you are managing large datasets. Additionally, differences in service models, APIs, and storage mechanisms mean that teams must account for potential compatibility issues during migration. In such cases, you may need cloud migration consulting services first to ensure a smooth transition.
Check our eBook to find out how to optimize cloud costs and avoid unnecessary data transfers
So, what’s the secret to a successful migration? The answer lies in proper strategy, planning, and execution.
Here are 6 main steps to take to ensure a successful cloud migration.
Cloud migration process
Step 1. Discovery and assessment
Nearly 40% of companies say that business value determines which applications they move to the cloud. Defining value behind cloud migration and assessing risks and benefits should be the first step in your cloud migration journey. You can do it by answering four main questions: why, what, where, and when to move. To do it, you need to perform three key actions:
Identify the business goals and objectives driving the migration
Perform technical audit to understand the technical requirements and constraints of your applications and data
Estimate potential expenses and savings to build a clear business case
With this foundation, you can shape a migration strategy and prioritize what to move first based on business value and complexity. Next, you’ll need to do the following.
Determine the proper cloud deployment (private, public, hybrid, community, multicloud) and service model (IaaS, PaaS or SaaS) for your needs
Read more about cloud deployment and service model:
Not long ago, many companies followed Gartner’s 5Rs model, introduced in the early days of cloud computing when companies were just beginning to migrate to the cloud. With cloud computing becoming more mature, AWS expanded this framework into the 7Rs model.
The 7Rs provide a comprehensive roadmap for planning, executing, and optimizing cloud migration. They help businesses evaluate their infrastructure, applications, and data to choose the most effective migration strategy.
7Rs cloud migration strategies (Source: AWS)
Rehost (lift and shift). This approach allows you to move your existing applications, data, and all the dependencies “as is” (without changing the core infrastructure) from an on-premises data center to a cloud. It’s one of the fastest options, however, it doesn’t unlock all the cloud’s potential, as the application remains configured for the on-premises environment.
Relocate (lift and optimize). Similar to rehosting, relocation transfers applications with minimal modification. However, once applications are in the cloud, they can gradually shift to cloud-based services and features. This lets you start using the cloud quickly while allowing for refactoring and cloud-centric improvements over time.
Replatform (lift, tinker, shift). Replatforming involves moving applications to the cloud with moderate modifications to use basic cloud capabilities. This approach strikes a balance between rehosting and refactoring (complete redesign). The “tinkering” focuses on optimizing performance and functionality (e.g., integrating managed databases or scalable storage) without fully overhauling the application.
Redesign (refactor or rearchitect). This strategy involves rethinking and restructuring your applications (e.g., breaking down a monolithic app into microservices or replacing modules with fully managed cloud services). Though it’s more complex than previous options, this approach maximizes the benefits of cloud migration.
Repurchase. In this approach, you typically abandon or replace existing software licenses in favor of modern, cloud-native alternatives. For example, instead of maintaining a traditional virtual desktop infrastructure (VDI) in your data center, you might transition to a fully managed, cloud-based VDI solution. This strategy is often driven by the desire to simplify operations, reduce maintenance overhead, or access advanced features that weren’t available in your legacy application.
Retire. Instead of replacing outdated applications with modern cloud-based alternatives, this approach involves identifying and shutting down applications that are no longer needed. These could be outdated, redundant, or underused systems that no longer serve a clear purpose. By retiring unused or obsolete applications, you simplify your IT environment and reduce costs, and the complexity of the migration process.
Retain. Finally, some applications might need to stay on-premises, at least temporarily, due to compliance requirements, latency needs, or other factors. Retain these applications until circumstances change, or consider a hybrid solution to bridge both environments.
You can choose to follow a single strategy that aligns with your goals, apply them sequentially as part of a phased approach, or even combine multiple strategies to address the diverse needs of your applications and infrastructure.
For example, you might start with a lift-and-shift approach to quickly migrate less critical systems, then replatform key applications to optimize performance, and finally, redesign complex systems to use cloud-native capabilities fully. Similarly, you might retire outdated or redundant systems during the process and repurchase modern cloud-based solutions to replace legacy software.
By preparing a cloud migration project plan and combining strategies thoughtfully, you maximize the benefits of cloud migration and minimize unnecessary complexity or wasted effort.
Step 3. Preparing the cloud environment
Before moving anything to the cloud, you must prepare the environment. Start with security settings and access controls: configure user permissions and authentication measures to safeguard sensitive data. Cloud providers offer robust security tools, but it’s up to you to implement them effectively. In fact, cloud misconfigurations account for 15% of all security breaches, so this step should be carried with greater attention.
Next, establish backup and disaster recovery plans. Migration introduces risks, so create backups of critical data and test your disaster recovery processes. If something goes wrong, you’ll need the ability to restore systems quickly without losing valuable information.
Then, configure your network infrastructure. Migration requires secure, efficient data transfer between your on-premises systems and the cloud. This might involve setting up VPNs, direct connections, or other secure pathways to ensure data flows smoothly without bottlenecks or vulnerabilities.
Step 4. Migrating data, infrastructure, and applications
This is where the actual transition to the cloud and detailed testing take place.
Infrastructure migration focuses on transitioning your servers, storage, and networks from on-premises or virtual environments to the cloud. This step sets the foundation for your entire cloud environment and ensures the new infrastructure can handle your workloads efficiently.
Data migration involves transferring databases and files to the cloud. This is often the most complex part of the process, as data integrity, security, and compliance need to be maintained throughout. We recommend moving less critical data first and testing the environment and workflows before transitioning high-priority or sensitive information.
Application migration takes your software and moves it to the cloud. Depending on the chosen cloud migration strategy, this step might require modifications to ensure the applications work seamlessly in the new environment.
Data and applications can be migrated via the public internet or a private, dedicated network connection. For smaller volumes of data, internet-based transfers may suffice. However, large-scale migrations require careful planning to ensure adequate bandwidth. With it, transfers can be faster and cheaper.
If you have substantial data volumes, you can also consider physical data transfer. Major cloud providers like Microsoft Azure and AWS offer offline data shipping services, where you load data into secure devices and physically ship them to the provider. While this approach still requires some final syncing once the data reaches the cloud, it can significantly reduce both the time and costs associated with massive data migrations.
Step 5. Management of workloads in the cloud environment
Many organizations make the mistake of viewing migration as the finish line. They move their workloads to the cloud and assume the transformation is complete. However, without ongoing management, they miss the opportunity to realize the cloud’s potential fully.
After migration, the real work begins to ensure everything works effectively. In fact, 68% of companies report that their cloud initiatives don’t stop after migration but remain an ongoing effort. However, only 1% of IT executives report that a continuous process of transformation was a key part of their cloud strategy.
Ongoing work includes, but is not limited to, monitoring how your applications and infrastructure perform in the cloud. Leading cloud providers offer out-of-the-box monitoring tools that let you track uptime, latency, and overall system health to ensure that your workloads run smoothly and meet business needs.
Besides, if you’ve chosen to rehost, relocate, or replatform your software as an initial cloud migration strategy, there are high chances that you’ll want to move your workloads to cloud-native services (e.g., use serverless functions, migrate to containers, etc.)
Step 6. Cost and resource optimization
Managing cloud costs is another challenge that is not quite obvious to most businesses. According to the Flexera 2023 State of the Cloud Report, 82% of companies identify managing cloud spending as their top concern. This isn’t surprising. The flexibility of the cloud is a huge advantage, but it can quickly turn into unchecked expenses without the right strategies in place.
What’s causing this inefficiency? The survey points to three main contributors:
Lack of needed skills. The cloud requires expertise, but 41% of companies struggle to find or train the right talent.
Overprovisioning resources. Businesses often allocate more capacity than they need just to be on the safe side, yet this only drives up unnecessary costs.
Idle or underused resources. Unused instances, forgotten subscriptions, and neglected workloads eat into budgets without delivering value.
To combat waste, companies must implement cloud cost optimization strategies. When appropriately adopted, they can help you do more than just cut costs but achieve the right balance between performance, resources, and expenses.
Partnering with an experienced cloud migration services provider like Leobit can help you take control of your cloud spending. And here’s why.
Leobit’s Cloud Software Development Services and Experience
With more than a decade of expertise in cloud software development and over 100 cloud-based projects completed, Leobit has established itself as a trusted partner for businesses seeking cloud migration and development services. The solutions we develop empower companies to unlock the full potential of the cloud, and benefit from its scalability, efficiency, and capacity for innovation.
As a Microsoft Solutions Partner, Leobit demonstrated the capability to build, run, and manage applications across multiple clouds, on-premises, and at the edge, using Microsoft tools and services that perfectly fit the customer’s requirements. Clutch, a leading B2B ratings and reviews platform, has ranked Leobit among the top global AWS and Azure developers and cloud consulting companies in 2024.
Leobit ranked among the global AWS and Azure developers and cloud consulting companies
We continuously invest in expanding our cloud expertise and currently have a team of 40 certified Azure and AWS cloud specialists. Our tech experts can help your company seamlessly transition to the cloud, design new architecture and cloud-native modules, and optimize your cloud spend.
Check out our cloud migration success stories.
Case study 1. Helping our client scale 15x with cloud migration and transition to microservice architecture
Web, Mobile and Embedded Cycling Solution
Our customer, a Norwegian startup later acquired by a leading US-based indoor cycling hardware manufacturer, approached Leobit with a critical challenge: their monolithic architecture could no longer handle the growing number of users. As their customer base expanded, system scaling became a significant pain point, and they needed a solution that could support continued growth.
Initially, the project was hosted on a virtual machine using Internet Information Services (IIS). We performed a migration to Azure infrastructure, where Azure DevOps played a central role in managing the development pipeline. In this process, we also established distinct services, the Cloud and Studio, to handle different aspects of the project.
This migration allowed us to improve the secure storing of settings and data. We also set up CI/CD processes, which allowed seamless build and release management through a unified portal.
As the project evolved, we prioritized the integration of microservices rather than further expanding the core project. This led to the adoption of Linux-based machines and containerization through Docker, which enhanced the system’s portability, scalability, and overall performance.
Thanks to all these actions, our client’s system is now handling a 15x increase in users. Read more about the solution and cloud migration we performed in Web, Mobile and Embedded Cycling Solution case study.
Case study 2. Cloud migration and architecture redesign for a leading 1031 exchange investment property platform
Real Estate Investment Management Platform
Our customer, a US-based real estate company, faced scalability limitations and turned to Leobit for a comprehensive redesign of the product architecture and migration from on-premises infrastructure to the cloud.
We began with a thorough technical audit to determine the optimal cloud migration strategy and provider. Based on our findings, we opted for a redesign strategy and selected Microsoft Azure as the cloud platform. The migration included transforming the monolithic application into a microservices architecture, which allowed for independent scaling of individual services based on demand.
After implementing the new architecture, we tackled two critical steps:
Synchronization of investment offerings. We combined manual updates with custom scripts to extract and migrate data from the legacy database.
User and data migration. Once we synchronized the investment offerings, we migrated user accounts and their associated data to the new platform. Our process minimized disruptions, ensuring users experienced a smooth, uninterrupted transition.
This strategic migration and redesign enhanced the platform’s scalability and performance, empowering the client to serve their growing user base better. During our ongoing technical partnership, our customer raised $6 million in Series A funding. Learn more about the project and Leobit’s role in our Real Estate Investment Management Platform case study.
Migrating to the cloud is more than a one-time task. The process of transforming a business through cloud technology demands thoughtful planning, strategic execution, and ongoing optimization. From understanding why, what, where, when and how to move to selecting the right partner for your transition, every step matters. A successful migration doesn’t end with moving workloads to the cloud. It extends to continuous monitoring, adjustments and cost optimization to fully use the capabilities of your new environment for your business needs.
At Leobit, we’ve spent the last decade helping businesses like yours unlock the full potential of the cloud. With over 100 successful cloud-based projects and a team of 40 certified cloud experts, we’re here to ensure your migration isn’t just seamless but a stepping stone to your business growth.
So, whether you need help with migration, cloud architecture design, or cost management, contact us and we’ll be your partner every step of the way.
Author
Inna Fishchuk
Market Data Analyst
Inna is a passionate advocate for cutting-edge technology solutions. She demystifies complex tech concepts and transforms intricate data into actionable insights to help businesses thrive in an ever-changing technological landscape.
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