Monthly Archives: March 2009

Cloud Storage: A Drain for Money and Data

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Cloud storage is getting a lot of attention these days, and not all of it is good. Over the years, lots of money has been plowed into building a business model in subscription-based on-line storage. Many of these companies have already gone bust or have been acquired. Just recently there was an article that Carbonite, a leader in online storage, is suing a hardware provider for losing customer data.

A good backup strategy requires a multi-pronged approach, not a single “silver bullet” solution as cloud storage is sometimes thought to be. People who do backup for a living understand this, yet many consumers are just beginning to become aware of a need to keep irreplaceable data like digital photos safe from computer viruses, hardware failures, fire, theft, and natural disasters. A major attraction of cloud storage is that presumably the data is stored on very reliable hardware and looked after by IT professionals and copied to redundant, geographically distributed data centers. But if you’re happily storing your data in some amorphous data cloud, if any data goes missing, you might be the only one likely to notice. That may happen quickly if it is data that is accessed frequently, such as data on an active website, but in the case of an archive of digital photos, if you don’t bother to check them periodically it could be a few years before you might notice some or all of the photos are gone (most likely while you’re attempting to do a restore). If that happens, what are the odds of getting your data back? I’d say not very good, since backup media like tape in data centers is frequently re-cycled and overwritten. Sure, there may be an archive copy off-site in a box of tapes, but I’ve been down that road and I know where it leads, and it’s usually not to your lost data.

What happens if the cloud storage company isn’t able to cover its expenses and turns into a money loser for its investors, as has happened several times already? Odds are, they will cut and run, telling you in a hasty email that your data is there for the downloading. You have a month to get it, otherwise it’s gone forever. That’s what HP’s Upline service told its customers recently.

I don’t think that cloud storage is necessarily a bad idea, it’s just that it’s hard to make money with it because people don’t like paying perpetual monthly fees for a benefit that is largely invisible to them. Companies offering a service love recurring revenue models, and will go to extreme measures to create one, not unlike a crack dealer giving away the first hit for free. People do crazy things for crack, and companies do crazy things when they hear those magic words as if sung by angels, ‘recurring revenue stream’.

I was comparing the price of Amazon’s S3 service to using a web hosting account like GoDaddy as one’s personal cloud storage. For 150GB of storage and 1.5 TB of monthly throughput, GoDaddy charges $7/month. There are many other providers with similar hosting plans. For Amazon’s S3, it costs $.15/GB per month of storage + .10/GB bandwidth charge for uploading and $.17/GB for bandwidth charge for downloading. It sounds cheap, but if you already have a hosted website you may have about 145 GB of storage left over, and thus the web host solution is free whereas the Amazon S3 solution would set you back another $22/month for 145 GB of storage. And you would need to spend about $40 extra for the bandwidth to upload and download the data just once.

Moving 145 GB of data on a typical broadband connection with a capped upload speed of 1 Mbps would take about 300 hours (~13 days) of continuous uploading. That’s another downside to cloud computing. The data transfer times are usually deal breakers, if one bothers to do the math. Would you wait 2 weeks for a backup to complete? I sure wouldn’t. Even to restore that amount of data on a respectable 3 Mbps download connection would take more than 4 days. Again, not a very compelling solution.

There is a place for cloud storage, but it’s probably best done in small amounts, perhaps a few GB of really important digital photos, and in those cases, a simple regularly-scheduled upload to a web host would be the most economical way to go.

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Product and Customer Abandonment

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Designing products is not like making movies, although today it seems to be moving in that direction. My friend Don, who spent 30 years in Hollywood as a film editor, sometimes felt like he was abandoned at the end of each major project and left to his own to find his next gig. Fortunately for him, he has amazing talent, and it became easier each time a project finished to find his next position. Over the years, he eventually worked for every major Hollywood studio. His last job was on the popular, long running series, called “Murder, She Wrote“. When you work on a long-running series, you don’t have to worry so much about what will happen to you after the season is over. There is always the next season to look forward to.

Designing successful products, if it has anything in common with Hollywood, should be thought of more like a long-running and popular series as opposed to a blockbuster movie. Each successive generation needs to build on the last generation like a foundation and, if you continue to do things right, everyone will know about your product. You don’t simply design a product, promote it like it’s going to be a blockbuster, and then abandon it if it fails to meet expectations, yet it is common to treat new product introductions like this in high tech industry.

There have been instances where popular TV series, both Seinfeld and The Office come to mind, struggled to find their audiences before they took off. People often forget the first tentative steps a successful series may take prior to what appears to be its apparent ‘overnight success’. Had the people who created these series cut and run at the first sign of struggle, we may never had heard of them.

Each generation of product has an opportunity to build on the strengths of its predecessor, eliminate its weaknesses, and hopefully establish a loyal following. You wouldn’t tell the people who worked on each season of a TV series that you won’t be needing them again and they’re now free to leave and then scramble to hire a new cast for the next season. Similarly, a product development company must give the cast of characters who work on a project some incentive to stick around to work on successive generations. You want to avoid starting from scratch with each product generation and having to relearn everything over. If the only thing in store for the team at the end of the design cycle is a pink slip, they may decide to beat you to the punch and jump ship midway through the project.

The reason I’m writing this is because I’ve noticed a trend in the industry where companies try to create blockbuster products and if they don’t catch on immediately, they lay off the participants and move on to the next big thing. But successful product design doesn’t work that way. If you create and then quickly abandon products, you also abandon the products’ customers, and they will think twice before investing their time, energy, and trust in you again. Not only that, the knowledge accumulated in the design process is extremely valuable and it’s not written down neatly in some manual you can refer to next time. It’s in the heads of the people who poured their hearts and souls into creating the product.

If you want to be successful in creating products, you need to start with the expectation that your product will be around for a few generations before it hits its stride. It’s not a good idea to hastily throw something together and get it out to customers to ‘see if it sticks’, because if you do, your lack of commitment will shine right through, and the only thing that ‘sticks’ will be a damaged reputation and the foul taste you’ve left in the mouths of customers who were naive enough to trust you.

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