Competitors in the cloud industry continue to cut prices and increase storage limits. The tech industry has dubbed this “the race to zero,” with many predicting that the future will bring free, infinite cloud storage to all. As romantic as this sounds, I just don’t buy it.
No one will win this race over the long-term, and the biggest losers will likely be the consumers who were promised they could have it all: Incredible speeds! Limitless storage! First-class security! Free! In reality, consumers have to make choices about what they value most – speed, security or price – and choose the company that best delivers on their top priority. And the fastest and most secure offering will certainly not be free.
While the cloud has in many ways revolutionized the tech industry, it’s important that consumers are sensitive to its overpromises. Let’s talk about these in more detail.
More Energy, Moore Problems
Some in the tech industry mistakenly assume that cloud storage will be driven by Moore’s law (the prediction that chip processing power will double every 18 months, or that prices halve every couple of years in general for all technology). But a distinguishing aspect of cloud storage is the enormous role data centers play. “The Cloud” is made of data centers. Energy, namely power and cooling, is a major component of data center costs, and energy does not follow Moore’s law the same way technology does. Rather than getting cheaper with time, energy prices have remained flat or increased every year for decades.
These costs put a cap on how much the cloud can provide to consumers. Cloud providers are aware of the pending crunch, which is driving them to experiment with extremes in energy-saving data centers. Facebook built a data center north of the Arctic Circle to try to reduce cooling costs and Google has experimented with data centers cooled with seawater. But endeavors like this are incredibly expensive and have not universally solved the problem.
The immense energy use may also be a concern for environmentally concerned consumers. Cloud storage is not green. An overview of electricity used by the cloud recently found that if data centers were their own nation, they would be the fifth-largest consumer of electricity in the world — only the U.S., China, Russia and Japan use more power annually.
Free and Unlimited: It’s a Trap!
The "free and unlimited” storage conversation is not a new topic. The recent press coverage is due to the “race to zero,” but in reality, companies have offered such options since at least 2006. Yet in the years that followed, nearly every company that tried to offer unlimited storage either went under or had to increase prices.
The list of times this has happened is extensive. In 2006, Mozy entered the market with an unlimited backup offering. By 2011, they had reverted to a capped and metered offering because the amount of storage used by their largest consumers was making the entire business unprofitable. Meanwhile, they’d forced Carbonite into a similar unlimited model, but one in which upload bandwidth was severely capped in order to prevent users from getting too much data into the system.
More recently, Bitcasa launched their cloud with an “infinite storage” offering only to be forced to recant not long thereafter, with much drama for its users. In September 2013, Nirvanix announced that it would be shutting down, giving users only a few weeks to vacate data from the cloud. Suddenly facing a company’s worst fear – losing actual data – Nirvanix’s clients panicked. Some did not have sufficient network connections or bandwidth to download all the data quickly enough. Without sufficient time to create an alternative plan for extracting the data, some clients’ data was permanently lost. Another storage provider, MegaCloud, suddenly went dark a few months later.
Some claim that Amazon, Google, and Microsoft are less likely to rescind recent offerings that fly in the face of basic economics. But history has taught us time and time again that markets can only remain irrational for so long. The endgame for these big players in the cloud storage space is to gobble up market share as quickly as possible, defeat all potential competitors and wait for a future day to recoup the losses they will weather today.
In other words, once they have your data, they have a tremendous amount of leverage to get you to pay later. And the truth is they won’t have much choice; cloud storage housed in datacenters is tremendously expensive to offer.
Electricity, cooling, disaster-resistant buildings, fire suppression systems, diesel backup generators, 24x7 network operations centers: none of these things are free. No amount of marketing or arguments about “racing to zero” changes that core fact. In the end, data you send to the cloud has to at least cover costs for these businesses, one way or another. Putting your most precious files in a position where they could be held hostage is a decision to take seriously.
Security: Do You Feel Lucky, Punk?
An honest expert will tell you there is no way to be completely sure your data will remain secure once it’s moved to the cloud. From scandalous celebrity photos to Edward Snowden’s revelations on the NSA’s surveillance programs, it’s clear that cloud storage opens users to varying degrees of vulnerability.
While cloud storage providers may claim that they encrypt all uploaded data, there is little chance that customers will ever be able to audit their systems to validate those claims. And that’s important, because empty claims about security are easy to make and much less easy to deliver on. In the past, well-known companies have claimed that they don’t have access to customer encryption keys when they actually do. That means a rogue employee, a clever cyber-attacker or the government could, without too much effort, access your data.
Centralized systems are also more susceptible to failure and malicious attacks than distributed systems. Internet history shows us that most services become more reliable when they are decentralized. In many ways, however, the cloud today runs counter to these decades of learning. Most cloud services are pleading with us to re-centralize our data and services, trusting it all to just a few locations in a datacenter. What the cloud offers in convenience, it takes away in security.
Cloud storage has overpromised consumers in many areas, including security and the ability to keep costs low because of energy demands. I expect the issues will only be exacerbated rather than get simpler and clearer as more peopleuse the cloud for storage.
