Cloud & Infrastructure · Cloud Strategy · Medium · 25-35 min

On-Prem to Cloud — Is the Migration Worth It?

On-Prem to Cloud — Is the Migration Worth It? is a medium Cloud & Infrastructure cloud strategy case interview that runs 25-35 min. A mid-size enterprise runs ~400 applications across two aging on-prem data centers. A strong answer works through 5 phases: Separate the cost question from the value question; Build the TCO bridge; Segment the 400 apps; Address why cloud bills balloon; Sequence the three years and state the realistic savings range with the assumptions behind it.

Last updated 2026-09-05

The brief

A mid-size enterprise runs ~400 applications across two aging on-prem data centers. Annual run cost is about $42M (hardware refresh, facilities, licenses, ops staff). The CIO wants to migrate to public cloud over three years and has promised the board a 30% cost reduction. The CFO is skeptical — peers who migrated saw bills go up, not down. You are asked whether the 30% is real and how to get there.

How to approach it

  1. Separate the cost question from the value question — is this a pure cost play, an agility/speed play, or a forced refresh
  2. Build the TCO bridge — current on-prem run vs projected cloud run including egress, managed services, and the migration program cost itself
  3. Segment the 400 apps — retire, retain on-prem, rehost ('lift & shift'), or refactor — and show why a flat lift-and-shift rarely hits 30%
  4. Address why cloud bills balloon — over-provisioning, no FinOps, lift-and-shift without rightsizing — and what governance prevents it
  5. Sequence the three years and state the realistic savings range with the assumptions behind it

What a strong answer does

  • Recognizes lift-and-shift alone usually costs MORE, and that savings come from rightsizing, retiring dead apps, and refactoring the heavy hitters
  • Builds savings bottom-up by app disposition rather than asserting a flat 30%
  • Names FinOps / tagging / reserved-capacity governance as the thing that makes or breaks the business case
  • Includes the one-time migration program cost and the double-run period in the bridge
  • Distinguishes cost savings from agility benefits and is honest that 30% may not be achievable on cost alone

Red flags interviewers score down

  • Accepts the 30% target without rebuilding it from the application portfolio
  • Assumes cloud is automatically cheaper than on-prem
  • Ignores data-egress, managed-service premiums, and the cost of the migration itself
  • Recommends 'migrate everything' with no app-by-app disposition

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