The Cloud: A bigger risk to computers than a virus!

[Mushin]

The Cloud... The catch phrase that is promising to change computing as we know it. It's full of limitless possibilites. Nearly every software vendor on the planet is enabling their software for the cloud and nearly every hardware vendor is creating cloud devices. The advantages are worderful and great, companies will save money on infrastructure, software licensing, and hardware costs and so on...

But what we hear little discussion on is the potential of computer users (both personal and business) being held hostage to the cloud.

An example:

First lets look at a small computer repair business that needs software for basic accounting. Right now we have the option of both boxed software and cloud based software. The boxed software is $249.99 and the cloud based version is $19.99 a month... Comparable and indeed the cloud version is appealing to a small business with limited up front resources. Yet there the choice of which version to pick can have drastic cosequences on the business.

Lets say the business buys the boxed version.. they install the software start using it and away they go year after year they use the software and from time to time they shell out another $250 for the updated version. lets say over a 5 year period the update their version twice for a total spend of about $500... In the fith year the small business finds that the software developer has run into financial troubles will be going out of business. For the small computer repair business this will have minimal impact on operations since they can continue to use the software as is untill such a time they feel it is time to choose a new vendor. All in all.. this situation is pretty uneventful. $500 for five plus years of software usage and minor impact when the software company goes under.


In contrast lets look at a small computer repair shop that chooses the "cloud" version of the software. $20.00 a month is quite reasonable when compared to the box version and the software (as a service) has all the benifits of residing in the cloud. Off they go happy with their choice and month after month they are happy to pay their $20.00 not having to worry about updates and such. But 3 years later after speinding $720 total for Software/service the find that the softwre vendor is raising the price of the subscription to $25.00 per month citing increase operating costs steming from increased bandwith costs that are a result of the number of companies switching to cloud based services around the world. After 3 years the small computer repair shop is doing rather well and an extra five dollars a month is hardly anything to worry about. Life goes on.

In year 3.5 the Software vendor annocues that they will no longer offer boxed versions of their software as they switch to a full cloud based offering. They cite the need to reduce overall company costs and due to decliming sales of the boxed versions it is no longer economical to maintain two seperate versions. A few months later the company raises price to $35.00 for the cloud version as they could calulate they have eliminated their closest competition (Their own boxed version) from the playing field. By this time the computer repair shop has paid: $870 for the software.

In year four the great bandwith crisis hits as the rollout of increase network infrastructure can not keep up with demand... prices for internet access sky rocket around the world. ISPs reduce the amount of badwith allocated to each individual subscriber due to sweeping network outages and slowdowns. Companies offering cloud based services and well as those using them fee the pain of the slow downs and outages.

The software vendor rises prices yet again this time to $45.00. The small computer repair shop contemplates switching to another option but there is a whole host of problems since software vendors have closely guraded their file format to protect thier proprietary information. Sure their are options to export the data to different formats but a full data dump is very tedious and depending on the size of your database and cost of bandwith it could cost thousands of extra dollars. A decision is made that $45.00 is better than the added costs or migration so for the next year the computer repair shop spends their $45.00 a month. To date they have spent $140 for the software usage.

At the end of year four it is announced that teh software company can not keep up with rising costs and files for bankrupty. They will officially stop supporting their cloud based accounting package qand shut off servers in the coming months. Customers file a class action lawsuit to gain access to the proprietary database structure so that they can migrate to anohter service and after some legal back and forth the vendor agrees to make the subscribes data avaiable for bulk download.

By this time many ISP have switched to a metered internet usage scenario where you pay for badwidth much like you pay for water. This means an extra $200 in ISP charges for the computer repair shop so that they can "keep" all their accounting information. It might even mean an additional $200 to upload to a new accounting service..

The small computer shop is in a pinch as they try to figure outthe best option... So... in total of this 5 year people one company has paid $500 while the other has paid approx $1610 for essentially the same software ("Service")

And this my friends is a scenario based off of a single company using a single progra "as a service" imagine if all your software was actually a service and this scenario played out amoung 2 or 3 or 4 of the programs your business relies upon. Imaging a large corporation that needs hundreds of licenses of a word processor facing a similar scenario.

What happens when all the cloud based services hold your data hostage since no one except the vendor has access to the database structure?

What will happen as compnies decide to "leave" out an export feature or limit what can be accessed?

For my company I am not willing to give up access and control of my compnay information to a third party. As such I am not willing to pay for "cloud" based services or software to save money in the short term because the long term cost can't be quantified.

 

[14049752]

In year four the great bandwith crisis hits as the rollout of increase network infrastructure can not keep up with demand... prices for internet access sky rocket around the world. ISPs reduce the amount of badwith allocated to each individual subscriber due to sweeping network outages and slowdowns.

Year five: Locusts swarm on all of the data centers world-wide. People run to the streets in a panic when their data is lost forever because earth's magnetic fields have increased exponentially, without reason...wiping out all magnetic and flash media. The service company cites daily tornadoes, flooding and hurricanes as a reason to begin charging $550 per month to access your accounting data.


You make good points, when they're based on cost of the service vs cost of the box product. You even make a good point about the difficulty of switching products....but I think your year four scenario is a little over the top.

 

[Mushin]

Year five: Locusts swarm on all of the data centers world-wide. People run to the streets in a panic when their data is lost forever because earth's .
magnetic fields have increased exponentially, without reason...wiping out all magnetic and flash media. The service company cites daily tornadoes, flooding and hurricanes as a reason to begin charging $550 per month to access your accounting data

You make good points, when they're based on cost of the service vs cost of the box product. You even make a good point about the difficulty of switching products....but I think your year four scenario is a little over the top.

Yea I guess I just can resist a good dooms day scenario... But there is the posibility of increased bandwidth costs even though I take it to the extreme...(Or Do I?) and the is a real posibility of outages. Who knows what will happen.... with bandwidth come "2025."

 

[phaZed]

I just don't see the Cloud "taking off".. maybe to some limited degree, but not as the Media/corporations would have you believe. For the cloud to be practical, virtually everyone needs to have high speed service. Here in the USA, geographically, there are huge gaps in infrastructure. For instance, here in Richmond Virginia (Not a small City, but not near as big as Chicago or NY) if you were to travel to most counties going west (20-30 miles or more)... DSL, Satellite, and Dial-Up are your only options. The DSL is even more sporadic depending on your location. If "everything" is going to be cloud based then it will only be for metropolitan areas.

Not to mention the security risks involved with a third-party, as you touched on, is great. We have hackers able to infect US Military Predator Drones and Nuclear processing facilities for god sake. Your cloud services WILL NOT be secure. Also, by law (F'ing Patriot Act), the US Gov and counter-parties are able to data mine and access anything they want for absolutely whatever reason and without oversight. Putting your stuff in the cloud just makes it that much easier to take a peek.

Horrible idea if you ask me. It benefits the corporations and governments; they can sell you more crap you don't need, and the things you take for granted? Well, you get to pay for that now too... If that's the way it ends up.. I'm off to Linux for good.

 

[Appleby]

You use the cloud. Your internet connection does down. /end of story

I rest my case.

PhaZed is right. Reliable high speed internet is the problem. I stand by my beliefs that these big city programmers, developers and tech "inventors" are 100% out of touch with a HUGE portion of the population of the US. There are just so many people with no access to reliable high speed internet. A huge percentage of my customers have no options but dial-up and/or satellite (expensive, not fast and not reliable.) Think about this....we are talking about cloud computing possibly being the "norm" and in reality, a large percentage of the population wouldn't even be able to access it!

 

[Tony_Scarpelli]

Oracal and Intuit both started up an accounting application service provider what they called them 10 years ago. They both were roughly equivalent to Quick books non pro series.

They both offered $5 per month per user with 1 free Accountants account. So you and your employees.

Oracle closed their netbook.com down and Intuit charges about $75 per month for 1 user and 1 accountant.

They are clumsy and slow, little you can do about the latency.

With US Federal Fusion centers and Carnivore programs filtering and eves dropping on all communications do you really want any data online?

I'm not condemning IRS but what about your ex wifes attorney getting some of your personal info? What about a child custody suit?

there are always those who will capture and use your data unethically.

Recently there was a case of attorneys who hired investigators and prostitutes to setup men by getting them drunk and in compromising positions and then calling the cops so they would get a public DUI and pandering charge which then sunk them in their child custody case, property settlement, divorce.....

By attacking credibility everything you say in court is ignored so the other side has their way with your attorneys.

Spys and industrial espinoge is conducted in a very similar way.

I don't know what can and cannot be done so I am the type of guy who likes my visa in my wallet and I never let the server take it out of my site.
I like my data on my server and never out of my control or those who I trust. I do not trust Online with anything more than email and storing a few files.

 

[16k_zx81]

But what we hear little discussion on is the potential of computer users (both personal and business) being held hostage to the cloud.

You are not factoring in the force of the free market. The thing thats stopping company (a) from holding the planet ransom for accounting software is the existence of company (b), (c), (d), et al.

Because there will always be market competition this means that the market will drive prices, not individual companies. For your doomsday scenario to run its course it would have to have a monopoly on accounting software.

Not going to happen, unless the Internet becomes privately owned (a prediction cited by Richard Murdoch a few years ago), now that would be scary*

In terms of time, there is, at least, the mediating factor of high-speed broadband implementation before the whole cloud / distributed computing thing goes full swing. In the interim we can still make money doing repairs and can still buy boxed software licenses.

Personally I wont lose any sleep over it (tonight, at least).

*Boyer Lectures

 

[dipper]

You are not factoring in the force of the free market. The thing thats stopping company (a) from holding the planet ransom for accounting software is the existence of company (b), (c), (d), et al.

Sure but your data is in a different format which will make it hard or near enough to impossible to transfer. Plus you will need to download your data somehow (how many providers allow this) and upload it to your new provider.

 

[16k_zx81]

Sure but your data is in a different format which will make it hard or near enough to impossible to transfer. Plus you will need to download your data somehow (how many providers allow this) and upload it to your new provider.

EOFY = end old provider // start new provider. Hardly rocket science.

 

[Mushin]

You are not factoring in the force of the free market. The thing thats stopping company (a) from holding the planet ransom for accounting software is the existence of company (b), (c), (d), et al.

Because there will always be market competition this means that the market will drive prices, not individual companies. For your doomsday scenario to run its course it would have to have a monopoly on accounting software.

Obviously this is not a full analysis of market forces but a post to a forum that is aimed at provoking thought. However even in a free market the danager of cloud services are very very real. As others have pointed out security is a real issue, so is data portability, so is the drainer on business profits, so are the impacts of uncontrolable outages, and so on.

Even with market competition as it is now, we see high software fees. Using my example of accounting software there really are only two major players, Intuit and Sage and prices are what they are not so much because of competition but because they have become the "standard" accounting packages. Maybe not a monopoly but a duo-opoply. I am sure neiter one of these companies have a desire to lower thier prices drasticly and I am willing to bet that they would increase their prices in a hearbeat especially if other external factors exist that impact the industry as a whole. This is also the case with Microsoft. Sure there are "alternatives" especially in the case of operating systems but they are not a standard thus even giving linux away has little to no impact on Windows prices.

Now I am not all synical when it comes to a free market but we already have seen key companies come under fire because of their potential for abusing their market share... think "Microsoft, Yahoo (in the past), and Google". So lets just say that it is to our advantage as an informed consumer to share concerns with the world because we can't allow the "market makers" to go unchecked and dictate the terms of the new cloud market place.

I would contend that the world is already a "hostage" to Microsoft they just don't know it... but that is better looked at in another thread under another subject.

 

[Rosco]

EOFY = end old provider // start new provider. Hardly rocket science.

^^ haha.

This is a great little story/prediction. My thinking is the same way. Cost way to much for little to no security! Way to many unknowns for my liking.

I am in the US and the infrastructure here will not allow for cloud computing at this time. Most people in my area have dsl no way that we be good enough for reliable cloud services!

 

[sassenach]

EOFY = end old provider // start new provider.

But then you won't be able to use any data from previous years as your account with the first provider will have been closed.

I don't know what it's like elsewhere but in the UK all financial data has to be kept where it is accessible by the Tax Man for at least 5 or 6 years.

I'm really not sure that "the cloud" and its offerings are a sensible choice for any SME or business that uses sensitive data. It remains to be seen if companies using the cloud in the UK fall foul of the Data Protection Act.

 

[16k_zx81]

I don't know what it's like elsewhere but in the UK all financial data has to be kept where it is accessible by the Tax Man for at least 5 or 6 years

Traditionally this has been achieved by the use of a printer. Are you saying that this hypothetical monopolistic cloud computing software villain will veto that option too?

 

[phaZed]

Traditionally this has been achieved by the use of a printer. Are you saying that this hypothetical monopolistic cloud computing software villain will veto that option too?

Agreed. I don't think record keeping for the purpose of having to report your *whatever* to an authority is an issue. I *believe* that places like Intuit and IRS sponsered tax filing agencies are required by law to keep your records for the 5-6 years; a stipulation to be doing that type of business. Just because you don't have an account doesn't mean they erase your stuff... you just can't use their services in the future.. and a printer works too!

I think what should be of the main concern is that the "monopolistic cloud computing software villain" (I love that!) is the same force trying to kill Net Neutrality. It's the corporations and ISPs that don't want Net Neutrality, they want to charge you for your access to the internet, and then charge you for access to "sites" as well, they want a pay-per-view system for the internet. Now their PUSHING FOR THE CLOUD! They also don't want to spend the money to upgrade, innovate, and modernize their equipment (Read: NetFlix, Streaming Video and bandwidth problems)... The sad thing is that many of our politicians are corporate controlled shills and actually support the death of Net Neutrality, disregarding the public's view on the matter.

So, at the moment, Net Neutrality still stands but I see the "Cloud" as a great first step away from the freedom and wealth of relatively free information... along with all of the other shortcomings that we have touched upon.

And one more thing to think about... It would seem to me that this would be a bad thing for almost ALL the hardware manufactures out there... hard drives, speedy processors, memory.. who needs all that with a dumb terminal?

 

[sassenach]

For a sole trader and even a small business unit, having to manually reload all your financial data to a new system and ensure that you are putting everything in the right place if the formats are significantly different could be an absolute nightmare and take up far too much time that should be spent bringing in and completeing normal daily business.

Amazon's cloud servers in Ireland have already had at least 2 major outages that have caused data to be lost and no recovery to be possible.

Another problem is that some IaaS and SaaS providers have absolutely useless customer services - Amazon and Google being prime examples.

 

[Mushin]

And one more thing to think about... It would seem to me that this would be a bad thing for almost ALL the hardware manufactures out there... hard drives, speedy processors, memory.. who needs all that with a dumb terminal?

Oh... what a great point indeed! Of course their would be opportunites in the server segments but people are just creating too much data for that to be the only option. Thus the more restriced the "dumb terminal" the less appealing it would be to the consumer. That is a hard pill to swallow... not for all but for many.