Friday, September 04, 2009

Cloud Computing is Baaaad, mmmKayyy?

Cory Doctorow has a story in the Guardian (link) describing the "real" purpose of cloud computing.

The tech press is full of people who want to tell you how completely awesome life is going to be when everything moves to "the cloud" – that is, when all your important storage, processing and other needs are handled by vast, professionally managed data-centres.

Here's something you won't see mentioned, though: the main attraction of the cloud to investors and entrepreneurs is the idea of making money from you, on a recurring, perpetual basis, for something you currently get for a flat rate or for free without having to give up the money or privacy that cloud companies hope to leverage into fortunes.

Now, Cory Doctorow is making the spot-on observation that cloud computing is a scheme to get money from your pocket into someone else's. I dislike it for this reason, but that's not the only one. I have long maintained that choosing SaaS is a major mistake for most companies. This is especially true for small companies that don't have the negotiating clout to legally safeguard their data. Nor is it a good choice for large companies. For medium-sized companies it questionable at best.

People, do not put your mission-critical data in someone else's hands. There are some things that "the cloud" is good for, but not when you realize that you can, in fact, do it yourself... more securely and cheaper. Most people don't even know that they have these capabilities available to them. And many don't, because they don't have the right tools. But they could.

Now, if I were in a Microsoft shop I might be worried that I can't provide these "cloudlike" services in-house economically. But I work in a Notes/Domino environment. You can use it for email, sure... but it also gives you a full messaging solution. It can provide your website, your forums, etc. Yet I repeatedly see companies deploy other "solutions" to handle the functions that they could do perfectly well with what they have, if they only knew it.
Need a wiki? Notes. Need a Teamroom? Notes. Need a document repository? Notes. Need instant messaging tightly integrated with email? Notes. SFA? Notes. Other Lotus products can extend your infrastructure beyond the basic capabilities, but for many small businesses, Notes and Domino are all you need. A Notes+Domino environment is ridiculously cheap for small businesses, and it will quickly repay the investment rather than constantly drain your finances, as will cloud computing.

Domino isn't the only way to do this... you can use a number of Open Source software packages if you can deal with complexity. Or you can cobble together Microsoft's offerings if you don't mind complexity AND expense. But Notes+Domino is really the simplest way to go for those who aren't technically inclined.

Folks, processing power is cheap: people have so much of it that they can afford to donate it to projects like SETI and ASTRA. Data storage is cheap: you can buy a terabyte for one Benjamin Franklin. Network connectivity is cheap: I get gobs of it with several hundred channels of cable television. The capabilities you need are cheap as we've discussed above. As a result of all this, the cloud vendors are selling you "solutions" to problems that don't really exist. Avoid, avoid, avoid.


Anonymous Greg Charland said...


I understand where you're coming from. From a tech guy standpoint I agree that there are many reasons NOT to like hosted services. We've spent the past 20 years getting intelligence from mainframes and minicomputers onto the desktops. Going the other way is contrary to everything that's happened in the industry for years now.

Really, though, it comes down to the math.

I'm not even going to go in the direction of google as I'm not convinced that their email solution is business-worthy.

But I can offer hosted Exchange & SharePoint through a well-known provider for $15 per mailbox per month...and make good margin doing it. Not cheap crap but a real provider who answers phones, monitors their servers, and knows their stuff.

For an "average" 10-user business:
10 x $15 = $150/mo
That's $1,800 per year
That's $7,200 over the 4-year life of a "typical" server.

I'm not able to install and maintain an SBS or LFS server for that kind of money. Heck, good IBM or HP server-grade hardware will cost nearly that!

Yes, there are unknowns in the security and availability side. That's why I use OwnWebNow or FluidHosting rather than the-G-word. And people need to know that a routing issue could mess up the internet and knock 'em out for a while. Adding a $500 dual-WAN router and $50/mo backup internet is STILL way cheaper than a server.

Or decide NOT to multi-home...and go to the nearest McDonalds or Starbucks if your Internet goes down.

Hosted services aren't for everyone. High-security clients (like accountants, lawyers, medical, etc) will probably stay on-site for a long time. Locations like Central Massachusetts without highly-reliable internet access will probably stay on-site for a long time.

There will always be business owners who want to OWN a server and software so they have the choice to run Notes 2 on OS2 or NT3.5, connect it to Quickbooks 95 and Ami Pro. I don't consider these people "A-List Clients" and won't build my business around enabling them.

I believe that most business owners are prepared to take the *small* risk that something bad *could* happen in the cloud to save $10k+ over the life of their server.

We as consultants need to advise our clients of the risks and guide them toward the solution that makes the best sense for THEM.

If you don't offer them the solution that saves 'em $20k over the next five years...they'll want to know why. And they'll want blood.

September 5, 2009 at 8:55 PM  
Blogger Dave Leigh said...

Greg, I've been writing this blog for a long while, now and I'm thrilled to say that this is the most thoughtful, insightful comment I've ever received.

I wrote a response to this, but it's waayy too long, so I'll repurpose it as a follow-on blog post.

September 7, 2009 at 10:42 AM  
Blogger Dave Leigh said...

One point I'm not addressing in the subsequent blog post:

There will always be business owners who want to OWN a server and software so they have the choice to run Notes 2 on OS2 or NT3.5, connect it to Quickbooks 95 and Ami Pro. I don't consider these people "A-List Clients" and won't build my business around enabling them.

Your understanding here is extremely dated. The business owner who owns a server can install Domino 8.5 on it, with Notes 8.5 clients on each desktop, with a total software expenditure of $141 per seat, or $39 per seat less than you're charging for hosted Exchange+Sharepoint for the first year alone. This comes with integrated with Lotus Symphony, which provides MS Office and ODF-compatible word processing, spreadsheet, and presentation graphics.

Contrary to your characterization, these are indeed very good clients, running top-of-the-line software at a very reasonable rate; and who, as a result, have money to pay you for support and consulting on ways to increase and better their business, as opposed to paying to maintain the status quo.

Recurring charges for stuff they could have bought outright may be great for the vendor's bottom line; but remember... we as consultants need to advise our clients of the risks and guide them toward the solution that makes the best sense for THEM.

September 7, 2009 at 12:11 PM  
Anonymous Greg Charland said...

The bad clients I was alluding to are the cheapskates who do not want to spend money for updates. Don't want to spend money for security patches. Don't understand why their Foxpro DOS program isn't running right on a Windows 2003 server and Vista PC.

The hypothetical clients you mention ARE good clients. They understand the value of current support.

They're the ones you've built your business on, I'm sure.

September 7, 2009 at 8:32 PM  

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