Testing: First Services Workload to Migrate to Cloud | Sherpas in Blue Shirts

The services market is aflutter with the coming impact of migrating work from legacy environments to cloud environments. Twenty-five to 30 percent of capacity in legacy environments today is utilized for testing, making it ideal as the first workload in services to migrate to cloud. We see signs that this migration is already underway. We believe the implications of migrating the testing workload are very significant.

Let’s look first at why testing will be the first big area to move to the cloud. Testing environments are low risk to be moved, and there are few production consequences. Testing is a really interesting first step and low-risk way to test cloud environments. Test environments are used intermittently, which makes them ideal workloads to move into a public cloud where you only pay for what you use. You can spin them up quickly and shut them down quickly. There is also a substantial cost benefit. And they’re a great test bed in that you can use them not only for the testing workload but also test your legacy applications running in these environments.

It will take some time to put the migration in place, but we think this is a natural grouping of things to move.

The implications, though, are fairly dramatic to the existing legacy workloads.

If a testing environment comprises 25 to 30 percent of the capacity moved, it means you’re left with excess capacity in your legacy environment. For organizations that are not in outsourcing relationships for testing, they won’t need to buy new equipment; the capacity can be used for production as production grows. But those that are in outsourced relationships, whether with asset-intensive or remote infrastructure management outsourcing (RIMO) providers, there will be a corresponding reduction in the invoice to the outsourcer.

At Everest Group, we’ve looked at the contracts for more than 300 outsourcing relationships to see what the implications would be as a result of the migration. We found that almost uniformly, if companies manage these migrations correctly, they can reduce their invoice by 25 to 30 percent without breaking banding or costing prices. So testing workloads certainly can be migrated.

This will result in a downward pressure in revenue for the incumbent infrastructure providers, so we think this has significant implications for the outsourcing industry. Whether it is the RIMO players or the asset-intensive players such as CSC-HP and IBM, migrating the testing workloads will impact 25 to 30 percent of the existing capacity in these providers’ invoices.

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