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This story appears in the August 2013 issue of Entrepreneur . Subscribe »
Q: Should my company really send everything to heaven?
A: The cloud has changed the way we do business, archived data and computer tools, and made them available wherever they have access to the Internet. But it is not perfect, and some advantages have a high price. We asked Alen Peacock to play the devil's advocate. He is co-founder of Space Monkey, a startup based in Midvale, Utah, which focuses on making file storage faster and more cost-effective by using (it guessed) the cloud. Here he points to possible disadvantages.
They do not control the cloud. "If something goes wrong ̵
Peacock points out that nearly all major cloud service providers have had downtime and data losses. Amazon's cloud computing platform, EC2, has had at least three major outages in the last three years, which has led to some customers losing their data permanently. Netflix, Pinterest, Airbnb, and Instagram are among the companies that suffered service outages last year due to their dependency on the cloud.
It can be slow. "Data transmission over the Internet to a remote data center is much slower than local storage," says Peacock. "The same applies if you need your data." Cloud services have finite amounts of bandwidth to share among all users, and the more customers they have, the slower they work.
It's expensive. In the short term, cloud services appear cost-effective – instead of paying in advance to buy their own devices and software, you pay a small monthly fee. However, Peacock explains: "It's the long-term cost that bites you, it costs money to pay for server cooling systems, bandwidth, fire extinguishing systems, backup generators, security systems and patrols, and staff for 24/7 networking and you pay them every day , for years. "
It sucks energy. "The cloud is anything but a clean, energy-efficient technology," says Peacock. "If the data centers of the world where these cloud-based programs are stored would be a country, they would be the 12th largest electricity consumers in the world and would place them between Spain and Italy."
No internet means no cloud. "Accessing your files from any device and storing a copy safely rocks somewhere else," says Peacock. "But if your internet connection is interrupted or switched off, you do too."
Service providers can be arbitrary and volatile. Cloud service users can engage in complex policy and gatekeeping issues that could cause their accounts to be locked or closed. And, as Peacock points out, "A service that silences you can have a negative impact on your entire business."
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