Skip the navigation

Cloud computing: Beware cost overruns

By Tim Greene
May 18, 2011 06:00 AM ET

Network World - The touted cost savings associated with cloud services didn't pan out for Ernie Neuman, not because the savings weren't real, but because the use of the service got out of hand.

When he worked in IT for the Cole & Weber advertising firm in Seattle two and a half years ago, Neuman enlisted cloud services from a provider called Tier3, but had to bail because the costs quickly overran the budget. He was a victim of what he calls cloud sprawl -- the uncontrolled growth of virtual servers as developers set them up at will, then abandoned them to work on other servers without shutting down the servers they no longer needed.

Where he expected the developers to use up to 25 virtual servers, the actual number hit 70 or so. "The bills were out of control compared with what the business planned to spend," he says.

CLOUD SECURITY: Interop: Cloud services take a beating in debate over security 

He tried modifying policies around use of the virtual servers so they could be used only from 7 a.m. to 7 p.m. But that didn't work either because, inevitably, deadlines had to be met that required violating the new policy.

If you use cloud for six months and it costs the same as buying physical hardware, then you have to switch.
Ernie Neuman, IT director, Big Fish Games

Ultimately, the business built its own VMware cloud that supports up to 100 virtual servers.

Since then Neumann has moved on to being IT director for Big Fish Games, which makes computer and online games, and where he has given cloud service another shot, but with similar results.

Big Fish hired server capacity from Amazon to launch an experimental Facebook game. "Then the game was very successful," he says. "It was great to be in the cloud because it could scale so quickly, but the costs got out of control."

So again he pulled the content from the cloud and hosted the game in-house, a move that paid for itself in three months with the savings from not having to pay the cloud bill, he says. "Performance issues didn't drive the change," he says, but the experience has jaded him a bit. "Now we're cloud averse. We don't even talk about it."

Originally published on www.networkworld.com. Click here to read the original story.
Reprinted with permission from NetworkWorld.com. Story copyright 2012 Network World, Inc. All rights reserved.
Our Commenting Policies
Consumerization of IT: Be in the know
consumer tech

Our new weekly Consumerization of IT newsletter covers a wide range of trends including BYOD, smartphones, tablets, MDM, cloud, social and what it all means for IT. Subscribe now and stay up to date!