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Pubmatic swaps AWS for OpenStack after public cloud hidden-cost horror show

Tamlin Magee | June 24, 2016
Udy Gold describes how he played hide and seek with his CFO when monthly invoices soared out of control

When this decision maker decided to pick Amazon Web Services because his devs needed cloud in a hurry, he didn't know what he was letting himself in for. A move to OpenStack and all was well eventually, but only after the painful lessons hundreds of thousands of dollars can teach you.

The director of data centres and cloud at marketing automation company Pubmatic has warned of the spiralling hidden costs of public cloud services like Amazon Web Services and Microsoft Azure, spurring a decision to move to OpenStack.

dollar flickr creative comm
Image: Flickr/Greg Dunlap

Udy Gold, speaking at OpenStack Summit 2016 in Austin, likened his experience with public cloud to the "most expensive taxi ride" of his life - when in India he knew he was being ripped off for a rickshaw ride but handed over the $20 anyway. It led to a situation so desperate he was hiding from his CFO.

When Pubmatic first signed up to AWS the thinking was perfectly logical: the business had a situation where development needed new machines and new hardware. With a CFO withholding the level of budget this would require, Gold wondered: how do we do it without buying new hardware? And so the firm signed up to the public cloud.

He reminded the room that the public cloud does not equal the data centre: it's CPU for hire. "So if you need a CPU for 24 hours a day, then the public cloud is going to bite you with the cost," he said.

Then there's the costs the business would have to take on anyway: people who understand what the company's doing, resource management, system administrators, network monitoring. And there are other challenges, like troubleshooting latency issues, machines dropping, contacting the provider, for example.

"The cost is unpredictable," Gold said. "It can be very expensive and very difficult to control."

"We basically put money down the drain."

Although Gold didn't reveal the exact figures, he did tell the room the ratio. The project on AWS ended up costing 18 times the original budget. But by the time the invoice arrived it was too late. The company was heavily invested with over 1,000 production nodes in the public cloud - so of course the cost skyrocketed.

"When I came to the office I had to go through the back door and climb under the table so the CFO wouldn't see me," Gold said. "I'm not kidding. It was unpleasant."

This unsustainable cost reached six figures and sometimes close to seven - a month. It fluctuated, and there just was not a lot Gold could do. It turned out the vendor didn't want to negotiate.


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