Bill shocks, exits and official sources
Hosting migration costs: what moving servers or websites really costs a small business
The one-off costs of moving to a new host or cloud provider, from planning and data transfer to overlap months and DNS cutover, an illustrative budget, payback test and common failure points.
A hosting migration costs more than the new provider's first invoice. The one-off costs are planning and discovery, building the new environment, moving data (including outbound data transfer charges at the old provider), testing and cutover, overlap months when you pay both providers, DNS, email and certificate changes, and a contingency for what the inventory missed. In the illustrative budget below, a three-server move costs about $6,100. Whether that is worth it depends on the monthly saving: at $250 a month it takes about two years to pay back; at $500 a month, about one. Always compare migration with simply cleaning up where you are.
This guide belongs to the section overview, why cloud bills blow out. It links to exit costs and lock-in, cost control and the commitment payback example. Figures are illustrative, ex GST.
The cost lines of a migration
| Line | What it covers | Often forgotten because |
|---|---|---|
| Discovery and planning | Listing every site, server, database, cron job, email route, DNS record and integration | It feels like paperwork, but it prevents most failures |
| New environment build | Servers, networks, security, backups and monitoring at the new host | Security and backup set-up is extra work if moving from managed to self-managed |
| Data transfer | Copying files and databases; egress charges at the old provider | Egress is charged by the provider you are leaving |
| Software and licences | Reinstalling licences, control panels, certificates | Licences may be tied to the old server |
| Testing | Functional tests, performance at peak, restore test | Skipped under time pressure |
| Cutover | DNS changes, final data sync, monitoring the switch | Usually out of hours, at higher rates |
| Overlap | Paying both providers while the new one is proven | Notice periods and minimum terms at the old host |
| Early termination | Fees or forfeited prepayments at the old host | Hidden in the old contract |
| Contingency | Problems the inventory missed | Every migration finds something |
An illustrative budget for three servers
A small business moves a website, a staff portal and a database from one provider to another. Contractor rate: an illustrative $140 an hour. The old monthly bill is $600.
| Line | Basis | Cost |
|---|---|---|
| Discovery and planning | 8 h × $140 | $1,120.00 |
| Build new environment | 10 h × $140 | $1,400.00 |
| Data transfer out at old provider | 400 GB × $0.12 | $48.00 |
| Testing and cutover | 8 h × $140 | $1,120.00 |
| Overlap: old provider for 2 extra months | 2 × $600 | $1,200.00 |
| DNS, email, certificates | 3 h × $140 | $420.00 |
| Subtotal | $5,308.00 | |
| Contingency 15% | $5,308 × 15% | $796.20 |
| Total one-off cost | $6,104.20 |
The data transfer itself is the smallest line. People's time and the overlap are most of the cost.
Does it pay back?
Use the payback calculator: one-off cost $6,104.20, credits if the new provider offers any, and the yearly saving.
| Monthly saving | Yearly saving | Payback |
|---|---|---|
| $150 | $1,800 | 3.4 years |
| $250 | $3,000 | 2.0 years |
| $500 | $6,000 | 1.0 year |
With $1,000 of migration credits, the $250-a-month case pays back in ($6,104.20 − $1,000) ÷ $3,000 = 1.7 years. If payback is longer than you expect to stay with the new provider, or longer than the time until the next likely change to your systems, the move may not be worth it on cost alone.
Compare with cleaning up first. If cost control at the old provider would save $200 a month with a few hours' work, the migration's real saving is only the difference that remains.
Where migrations commonly go wrong
- Email breaks. DNS changes move website traffic but can also move or break email records (MX, SPF, DKIM, DMARC). List every DNS record before changing anything.
- Something was not in the inventory. A scheduled task, an integration with accounting software, a file share. Discovery prevents most of these.
- DNS time-to-live not lowered in advance. Old records stay cached for hours; lower the TTL a few days before cutover.
- No rollback plan. Keep the old environment running until the new one has been proven for an agreed period.
- Old provider cancelled too early or too late. Too early and you lose your rollback; too late and you pay extra months. Check the notice period.
- Backups not set up at the new host on day one. Restore-test before decommissioning the old environment.
- Domain not in your name. If a former contractor registered the domain, transferring it can delay the whole project.
Privacy and security during the move
Copying databases with personal information is a moment of higher risk: copies on laptops, temporary storage and transfer links. Use encrypted transfer, delete temporary copies, and restrict access. If the new host stores or accesses data overseas, check APP 8 before moving. If something goes wrong and personal information may have been exposed, assess it under the Notifiable Data Breaches scheme.
Frequently asked questions
Will the new provider migrate for me?
Some offer free or discounted migration for websites or servers, within limits. Read what is included, and who is responsible if something breaks.
How long should the overlap be?
Long enough to test at a busy period and confirm backups work. Two to four weeks is common for small setups; adjust for your notice period and risk.
Is a migration tax-deductible?
Migration costs are generally business expenses, but the treatment of larger projects can vary. Ask your tax agent.
What should I get back from the old provider?
Data exports, configuration, DNS records, licences, backups you need to keep, and written confirmation of deletion when you are done.
Sources
- Office of the Australian Information Commissioner — APP 8, APP 11 and the Notifiable Data Breaches scheme
- Australian Cyber Security Centre (ASD) — securing email domains and cloud migration guidance
- .au Domain Administration — .au domain transfers and registrant rules
- business.gov.au — managing IT projects and contractors
