“Doing battle with Cloud’s evil contracts and hostile hidden costs”
Such is the speed with which some organisations are seeking to move away from old-world tech with the inherent inflexibility and cost of legacy systems and large contracts, to a new cloud-based Nirvana with flexibility and choice for all, that they are oblivious to the many ways in which they are actually repeating many of the mistakes of the past.
Across the private sector, CIOs have been bringing to an end the era of big outsourcing contracts, in much the same way that the Government Digital Service (GDS) set about doing so in the public sector. As large legacy contracts with cumbersome IT suppliers came up for renewal, they look to switch to more agile alternatives.
Unfortunately, in their haste, many have overlook the inflexibility of the cloud contracts that they are signing and the hidden costs that they will incur. And as they’ve raced to script their new systems to AWS’s proprietary APIs and rushed to integrate with the higher-level functionality provided of AWS’s services, they have found themselves simply swapping one form of lock-in (with proprietary systems) with another (with a proprietary cloud provider).
In the public sector, digital transformation and breaking away from the incumbent tech oligopoly was always going to be a challenge, but it has been exacerbated by frequent changes at a ministerial level and by the stifling shadow of Brexit. As the Financial Times recently reported: there are hundreds of contracts expiring that are being renewed because civil servants are too busy with Brexit to focus on new and better-value tenders.
Most CIOs would expect that with a pure play cloud service, there will be no commitment to term, or to consume services, and you’d have the ability to terminate at will without any form of penalty.
For public sector CIO’s, G-Cloud provides an element of protection with contracts that are limited 2 years and that include provisions to allow them to break for convenience. Unfortunately, G-Cloud doesn’t prevent vendors from penalising customers for breaking for convenience, or from setting a minimum call-off term of 1 year, and early termination may not excuse you for liability for a full year’s charge.
Not only do AWS’s feature sets ensure that applications cannot be migrated to other providers without considerable application re-writes – creating technological lock-in – but they impose contractual lock-in as well. They don’t explicitly state that termination charges will apply, but are not transparent about what those charges might be and they then hold your data hostage until you have paid all “post termination costs”, and any other amounts due.
It is hardly surprising that there has been a massive move towards multi-cloud architectures in order to avoid lock-in, but there are further stealth charges that can make it expensive whether you remain with AWS or make it part of a multi-cloud architecture. Take for example egress charges, or the costs organizations pay to move data from one cloud to any another destination. These charges vary by provider. Typically, ingress and egress charges are billed monthly in a tiered structure, meaning that the more a customer transfers data into and out of a particular cloud, the more that it costs.
In recent research egress costs were shown to be a major concern for CIOs. The majority of respondents have a negative stance on egress costs, with 43 percent calling them a “necessary evil” and 29 percent deeming them “annoying, unnecessary additional charges.” Either way, they are a cost that could so easily have been avoided.
For those CIOs that survived prolonged trench warfare in their efforts to escape from the legacy tech oligopoly, it is infuriating to find themselves fighting the same issues all over again – this time “doing battle with Cloud’s evil contracts and hostile hidden costs.”
Fortunately, for diligent CIOs that are aware of these cloud pitfalls, there are cloud providers that can offer extensive multi-cloud solutions, so not technological lock-in, that offer fair contracts whereby you simply stop consuming services and export the data and the bills stop immediately, so no contractual lock-in, and that charge nothing for ingress and egress, so little at all in the way of hidden costs. You just need to find one. I think you know where to look!