Be careful with hidden costs of cloud, warns City & Guilds IT director

'It's very quick for people to put prices up fast,' Ian Turfrey tells Computing and Zerto web seminar

Businesses need to be cautious when adopting a hybrid cloud solution, because even though the concept can bring benefits of scalability, there are circumstances where it can prove to be more expensive than keeping data on premise.

That's according to Ian Turfrey, group board IT director at vocational edication organisation City & Guilds, who made the comments during a Computing and Zerto web seminar titled 'Towards the platform-agnostic private cloud'.

Turfrey is a shortlisted finalist for CIO of the Year at Computing's UK IT Industry Awards 2015.

City & Guilds itself ended up in a situation with Microsoft after mistakenly applying the wrong tariff for using its Azure cloud computing platform.

"You have to be very, very careful, in cloud, especially if some of these things are new, it's very quick for people to put prices up very fast and if you don't apply the right licensing tariffs associated with it, you can get a bit of a bill shock," Turfrey explained.

"We've had a few issues around Azure, we made a mistake and applied the wrong tariff licensing and paid the price in terms of additional costs," he said. "You can get a really big shock if you're not controlling that licensing."

Turfrey described how it can be all too easy to choose the wrong licensing programme as applications become more commoditised.

"People can make genuine mistakes and that's what happens; rather than applying a development licence, which would be free, you then treat it like a production type environment, which is when you incur the costs," he said.

"You just have to be very careful about how you use these things, because they're a lot easier to do, but the mistakes are a lot easier to make, too," Turfrey added.

Turfrey's remarks on the hidden costs of adopting cloud come after Mansoor Bin Saeed, development director at Coreix, warned of the hidden costs of keeping systems on premise at Computing' s recent Data Centre Summit.

"Storing in-house is good to begin with, but in the end software updates or failed power supplies lead you to start googling solutions or parts, or hiring someone to help," he said.

But Turfrey told the Computing web seminar audience there are hidden costs that could make it more economically viable to store some data on-premise, rather than in the cloud.

"There does sometimes become a price point where it may be cheaper to actually put it on premise," he said, before suggesting that scalability and elasticity can bring hidden costs to a company.

"If it's a very big type of application, it can be expensive, especially when you're making calls to get data in and out. Because when you're making those calls, you can start paying £500,000 a year and that can become quite expensive," Turfrey said.

The argument, he suggested, is between "do I need the flexibility and scalability of this verses the actual cost of putting it on my own private cloud" stating that this "depends what you're trying to do".

"Sometimes it will be more expensive, but then you've paid for that to scale up and down and everyone wants to pay per use, pay per click, which is what we're trying to do in our business," he said, referring to the work at City & Guilds.

"However, when you're looking at very small customer applications, sometimes it doesn't make that much sense," he added.

Turfrey also claimed that exchange rates between the US and the UK can sting British firms that are using US technology providers.

"If you look at what Microsoft have just done, Microsoft are moving their prices up because of the exchange rate," he said.