As businesses increasingly migrate to the cloud, many face unexpected budget overruns due to inefficient legacy architectures. Traditional lift-and-shift migrations are failing to deliver cost efficiency, forcing the software industry to transition toward cloud-native architectures and FinOps practices.
Why simple lift-and-shift migration increases cloud costs
The traditional lift-and-shift migration approach involves copying physical servers to the cloud. However, without considering cloud-native specifics, this creates resource redundancy. In an on-premises environment, hardware is purchased with a margin, whereas in the cloud, paying for static 24/7 redundancy significantly increases infrastructure costs. Monolithic systems cannot scale dynamically, so without autoscaling configured, resources often run idle.
Architectural FinOps and unit economics
According to the Microsoft Azure Well-Architected Framework, cost modeling during the design phase is more effective than attempting to optimize after deployment. Financial parameters of the system should be designed as non-functional requirements (NFRs). Mature organizations focus on unit economics—the cost per unit of business value (e.g., processing a single transaction)—rather than the total bill. To achieve this, they implement resource tagging strategies for clear cost allocation.
Cost-saving levers and automation
According to the AWS Well-Architected Framework, cost optimization is an ongoing process. Key tools and practices include:
- Right-sizing: analyzing actual CPU and memory consumption and downsizing instances to the optimal level.
- Pricing models: using Reserved Instances and Savings Plans for predictable workloads.
- Automation: shutting down test environments during non-working hours and setting up budget alerts.
Expertise and technological solutions
Cost optimization requires shared responsibility between engineering and business teams. Experts at Softengi (a member of the Intecracy Group consortium) integrate FinOps principles directly into the architectural patterns of enterprise systems. For enterprise solution development, the UnityBase low-code platform is also utilized. Its architecture, based on a single metadata model, minimizes code redundancy and ensures optimal resource consumption in both cloud and on-premises environments.
Market implications
Relying on outdated migration methods leads to severe resource redundancy and uncontrolled cloud spend, directly impacting business profitability. Conversely, adopting cloud-native architectures and unit economics allows companies to tie IT costs directly to business value, fostering financial transparency and operational agility across engineering and business teams.
How to respond
- Shift to cloud-native design: Avoid simple lift-and-shift migrations and design financial parameters as non-functional requirements from the start.
- Implement FinOps and unit economics: Use resource tagging for cost allocation and focus on the cost per unit of business value.
- Optimize resources: Apply right-sizing, leverage Reserved Instances, and automate the shutdown of non-working environments.
- Leverage modern platforms: Integrate FinOps into architectural patterns and utilize low-code solutions like UnityBase to minimize redundancy.
Prepared by a Software Ukraine member. Original publication.