TCO: Why SISTIC bought a ticket for the private cloud train

It was time for an infrastructure refresh, and SISTIC looked to be a prime candidate for moving to the public cloud.

The Singapore-based ticketing services provider was experiencing growth in both the B2C and B2B arms of its business. In addition to its B2C ticketing service, SISTIC also white labels its hosted ticketing system for use by event venues; the company counts Marina Bay Sands, Resorts World Sentosa and five casinos in Macau among its customers, including the Parisian Macau.

SISTIC’s infrastructure needs had grown exponentially over the years – it started with a single UNIX server in 1992 and had built its own web-based ticketing system by 2003. SISTIC was controlling some 300 servers by 2012 and began a virtualization journey that same year to reduce its physical footprint.

By 2016, plans were in place to launch a single instance, multi-currency, multi-tenant cloud-based ticketing system, and SISTIC found itself facing an infrastructure dilemma. Should it implement a private cloud or hop onboard the public cloud train like everyone else?

Criteria

The evaluation process was carried out with three criteria in mind, shared CEO of SISTIC Kenneth Tan (pictured) during Cloud Expo Asia 2017. These included the technical considerations for going onto the public cloud, cost of moving to the cloud and references from other cloud users.

Tan confessed that he had entered the project feeling inclined toward the public cloud, partly due to the hype generated by happy public cloud customers. SISTIC’s use case also seemed to fit the public cloud, flexibility wise.

“We needed a system with the capacity to scale up and down quickly, as 50 to 100 VMs would need to be instantly activated during the sale of hot shows for up to two hours,” said Tan.

Other factors were in the public cloud’s favor too. The public cloud provider had the expertise to facilitate the migration and could also provide a 15 minute response time service-level agreement (SLA), a critical requirement given SISTIC’s B2B business.

But these requirements would come at a price, as Tan and his team, who had been in deep discussion with Amazon Web Services (AWS), found out.

 “We considered increasing the amount of RAM to improve performance, but the public cloud provider was unwilling to offer that, and instead tried to get us to achieve that same level of performance by adding more servers, which would cost more,” Tan shared, adding SISTIC was also quoted a five figure sum monthly by AWS for the SLA it required.

References

Tan sought the opinions of friends who were running their businesses on the public cloud and received varied responses, some of which touched on the public cloud’s cost and limitations.

 “We chose a public cloud because we can start new projects with minimal infrastructure costs and do it within a very short time,” said an owner of a startup e-commerce site that has been in business for three years. “However, take note that the trade-offs could be a higher opex in the long run.”

The owner of another popular e-commerce site praised the public cloud’s ease of use, but said it would not be suitable for applications that demanded high levels of customization.

“If you use public cloud, you will need to subscribe to their premium support. If not a fast response time is not guaranteed,” said one boss of a major fashion e-commerce site that had started off without premium support.

TCO

Tan and his team evaluated a public versus private cloud approach based on total cost of ownership, and the evaluation’s outcome (pictured below) left Tan “very surprised”, in his own words.

 

 

 

 

 

 

 

 

 

 

The private cloud approach turned out to be significantly cheaper, despite the upfront capex of about S$1 million needed.

“We calculated we’d save around 50% with the private cloud over the next 5 years,” said Tan. “In just 3 years, the amount we’d have spent on a private cloud would already be less than what we’d spend on the public cloud.”

A significant cost component for the public cloud approach was the premium support SISTIC needed from its public cloud provider. “It all adds up,” Tan explained.

Operating a private cloud also turned out to be less complicated than initially thought.