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Public vs. Private Cloud: PubMatic’s Journey to an OpenStack Private Cloud

If you missed Udy Gold’s presentation on the benefits of public vs. private cloud at the OpenStack Summit, here it is!

If you don’t have 37 minutes to watch the entire video, here’s a quick recap of what he had to say about his “cloud-hopping” journey.

Udy Gold is vice president of Data Center and Cloud Operations for PubMatic, a leading marketing automation software for publishers. In his presentation at OpenStack Summit 2016, Udy spoke about his experience setting up and managing infrastructure on a public cloud, how PubMatic’s public cloud operating costs subsequently spiraled out of control, and how an OpenStack private cloud environment finally met their requirements.

Quick Summary

PubMatic’s journey holds several key learnings for companies looking to expand their infrastructure with sufficient spending controls on capital as well as operational expenses. This blog will summarize:

  • Why PubMatic chose public cloud and the problems they faced
  • How PubMatic saved millions on OpEx after migrating to OpenStack private cloud
  • The advantages and disadvantages of public versus private clouds

PubMatic’s journey to a sustainable private cloud began in the public cloud

PubMatic is in the adtech industry. Their solution runs real-time bids for online ad impressions, receives bids from publishers and then publishes the ad with the winning bid. All of these transactions happen in milliseconds so, for example, by the time the New York Times homepage has loaded for you, PubMatic has already served the ad for the highest bidder on the website. Such performance has to be backed by an extensive and high-performance infrastructure. PubMatic achieves this by operating across multiple, geographically dispersed data centers. As their business depends on high-volume data and network traffic, these data centers always need to perform at a certain threshold.

Why did PubMatic initially choose a public cloud?

The PubMatic team was working against the clock to launch their analytics platform. The development, QA and deployment teams needed several hundred servers to meet their deadlines. They had limited budget to scale their hardware the way they wanted to. As a result, a lot of engineering work was on hold. To accelerate, they made the decision to move to a public cloud.

Prefacing PubMatic’s experience with public clouds, Udy had an important warning for the audience: Do not treat the public cloud as a data center! Since public clouds operate like “CPUs-for-hire,” renting hundreds of instances for long timeframes can make the operating costs shoot up very quickly. PubMatic soon realized that controlling costs in a public cloud would not necessarily be easy. And using the public cloud did not necessarily eliminate all OpEx costs: PubMatic would still need to involve several staffers and multiple hours to support resource management, network monitoring, troubleshooting and managing access controls.

Overall, Udy estimated the final cost PubMatic incurred for their investment was about 17-18 times higher than their initial projections! He even joked that he spent weeks avoiding his CFO so that he would not have to discuss controlling public cloud costs.

Assessing alternatives to public cloud

At this point PubMatic decided to explore alternatives to public cloud and considered a private cloud strategy. They put together requirements and policies to govern their decisions about infrastructure assets and investments. These included:

  • Using their existing data center hardware without making any changes to it
  • Having a centralized management dashboard which would allow teams to control, deploy, monitor things in their own environment
  • Supporting virtualization provisioning and management VMware, KVM, Docker
  • Seeking vendor support and enabling the ability to work fast
  • Creating as simple an integration as possible

PubMatic eventually settled on a private/hybrid cloud model where they would largely run on OpenStack private cloud but rely on the public cloud for capacity spikes. This would reduce the dependency and hence the cost associated with the latter.


“We saved easily $6-8 million on OpEx a year.”

– Udy Gold on his migration from public cloud to Platform9 Managed OpenStack


Managing costs with Platform9 Managed OpenStack as the alternative to public cloud

While the capabilities of a public cloud were something PubMatic needed to scale their product development, clearly it was not something they could afford. As an alternative to public cloud, PubMatic decided to migrate to an OpenStack-based private cloud, which would provide them with an public cloud-like experience, but on their own on-premises data center infrastructure. They chose Platform9 Managed OpenStack to implement what has become an “OpenStack-first” strategy. According to Udy, there were several reasons for choosing Platform9:

  • Platform9 was hardware agnostic and so PubMatic could just plug and play with it
  • Tenant self-management and control
  • Multi-region support for PubMatic’s geographically-dispersed architecture
  • Support for both VMware and Docker
  • Out-of-box management dashboard where PubMatic could monitor the overall environment e.g. how many CPUs they’re consuming currently (for better planning)
  • Platform9’s deployment model – full OpenStack capabilities provided as managed service with guaranteed SLAs. Its SaaS-based solution simplifies OpenStack monitoring, management, troubleshooting, upgrades, etc.

So how did PubMatic’s “cloud hopping” story end?

The migration to the private cloud and Platform9 enabled PubMatic to save between $6-8 million of OpeEx each year – a total reduction of 90% in expenses. PubMatic is now able to support its development and QA teams without having to worry about runaway operating costs.

Udy emphasized that every organization’s cloud journey is different and there is no black-and-white, one-size-fits-all solution and offered his experiences as a way to help others avoid his trial-by-fire with the public cloud.

public vs. private cloud journey

Private cloud vs. public cloud: What makes sense for you?

As a cloud computing company, we’re often asked how private and public clouds compare, i.e., what are the advantages and disadvantages. Last year, we surveyed about 1000 people to get users’ perspectives on the same topic. (Read: Public Cloud vs Private Cloud: Six Key Insights). This topic has been widely discussed and debated, but in a nutshell, here are high-level things to consider for each alternative:

Public Cloud

Enterprises invest in a public cloud infrastructure expecting technical as well as financial benefits. On the technical side, public clouds offer the ability for administrators to quickly scale infrastructure to meet spikes in demand while enablng developers and other users to quickly spin up resources – though, as Udy learned, the latter can be a double-edged sword. Developers also benefit from the API-driven automation capabilities that services like Amazon Web Services (AWS) offer. Financially, public clouds offer companies adopt a rental model rather than a capital investment model, which can be helpful for those whose resources are limited at the outset.

Public cloud advantages
  • A public cloud reduces upfront capital investment needs and lets companies operate in a monthly rental format
  • Can reduce the need for IT headcount to manage infrastructure; enables automation for developers
  • Ability to support scale dynamically, especially where demand fluctuates due to seasonality or promotional activity
Public cloud disadvantages
  • The foremost concern is data security. Many companies have stringent regulatory requirements or work in industry segments that prevent them from using shared resources in a public cloud.
  • As we discovered in our survey, cost escalations are the second highest concern with public clouds. As in the case of PubMatic, the actual expenditure can be many times more than the budget estimate you began with.
  • Data gravity and vendor lock in. Amazon makes it very easy to get your data into the public cloud, but very difficult and expensive to extract it.

Private Cloud

A private cloud provides the same basic benefits of public cloud such as self-service; multi-tenancy; the ability to provision machines; changing computing resources on-demand; creating multiple machines for complex computing jobs; and DevOps automation. Because they are within a company’s firewall, they minimize concerns over security and the company more direct control over their data.

Private cloud advantages
  • Private clouds offset security concerns with public clouds.
  • They also offer greater control over infrastructure that needs to be customized to internal company or team-specific needs.
  • Private clouds optimize the utilization of a company’s existing assets.
  • Private cloud management platforms like OpenStack provide AWS-like features, including self-service and access to open APIs for automation.
  • With private clouds, you always have the option to use ‘cloud bursting’ to augment operations with public cloud compute resources for planned spikes in traffic/utilization or as insurance to manage unplanned spikes.
Private cloud disadvantages
  • Companies need to invest in and manage on-premises data center infrastructure.
  • The initial investment cost may be a challenge especially for smaller and medium-sized businesses – although, as Udy points out, many small businesses have been destroyed by runaway costs in the public cloud.

Hybrid cloud

Most companies recognize that it’s not “either-or” when it comes to public vs private cloud and therefore pursue a hybrid cloud approach. Milind Govekar, managing vice president at Gartner, wrote a blog explaining his views on the advantages of the hybrid cloud. Among other factors:

  • A hybrid environment like the one PubMatic enables, maximizes private infrastructure usage and quickly shifts to a public cloud when the private cloud capacity needs to be supplemented.
  • A hybrid environment also enables companies to balance isolation, cost and scalability requirements.

Tell us what you think

For more details about PubMatic’s journey from the public cloud to Platform9 Managed OpenStack, watch the complete video. And please comment to tell us what you think or share details from your own public vs private cloud journey!

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