Several 'hidden costs' in public cloud offerings, warns Betfair CIO

By Sooraj Shah
27 Feb 2014 View Comments

The CIO of online gambling website Betfair, Michael Bischoff, has warned end users that there are several hidden costs with public cloud offerings which need to be considered by end users who are thinking of shifting their data.

Betfair was one of VMware's customers involved in the Beta trial of the vCloud Hybrid Service, an infrastructure-as-a-service (IaaS) service that competes with IaaS offerings from Amazon Web Services and Rackspace.

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VMware's aim was to ensure that firms who were already familiar with VMware tools in managing their on-premise IT could use those same controls to manage a public cloud offering while also being able to move workloads between the public cloud and on-premise systems without having to reconfigure either environment.

And since deciding to go forward with VMware's new hybrid product, Bischoff has suggested that there are several hidden costs with public cloud offerings.

"The most obvious ones are that there are a set of consumption-based services that are not obvious to everybody; for example, with bandwidth utilisation, they tend not to come with the sticker price that you often see," he said.

"The more profound costs come with the internal management overheads with using a public cloud offering because ultimately [these solutions] are about unit costs of compute, storage, networking and whatever it might be."

Bischoff explained that each of those unit costs have to be multiplied by the cost of security, compliance, management and monitoring and "all of the ancillary things that you have to do anyway".

"All of that erodes the value proposition of any public cloud service, because you have to add all those costs back and I think that's where many organisations including ourselves, compared [each type of offering] side by side, and realised that while the cost differentials are initially very appealing, when you add back all of the corporate overhead costs you have to carry, the value proposition is no longer as compelling," he said.

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