Is Cloud Storage Risky for Users?

In the past, companies required a lot of investment and time to be able to backup their data.  Expensive system, software, network infrastructure, salaries of employees were needed, and a place to install all the hardware.

Since storage capacity grew so fast, those equipments were always overpowered to make the huge investment lasting as long as possible. Once the data center was installed and implemented, which would take months to be accomplished, they had to add the operational and maintenance costs to the bill.

Today customers can opt more and more for cloud storage with a lot of offerings and is qualified these days as one of the safest, easiest and cheapest way to backup, store, recover, share and manage digital files. But is the migration to cloud worthy? And what are the risks to it?

What are the benefits of the cloud?

• Storage paid as you go and it’s very cheap, no need for huge investment
• Financial risk close to zero
• No operational or maintenance costs
• Easy transfer
• Easy access, and multiplatform support
• Easy collaboration
• Data accessible from anywhere
• No more disks or tapes, everything in the cloud
• File encryption during transition and while at rest
• Lot of choice with more than 2,300 cloud storage providers – and this figure continues to grow – in the planet accessible fo anyone from anywhere in the world

What are the risks of cloud?

• Confidentiality: Some users do not want their information circulating on Internet
• Security: some vendors do not offer encryption, few of them with serious SLA
• Data ownership: for example, DropBox’s conditions are that they own your data once you have uploaded them, but you alone are responsible for your data and that you retain your IP rights
• Slow Internet connection: especially for the first entire backup
• Backup and recovery momentarily unavailable: if the service or your Internet connexion is interrupted
• Service totally suspended: but generally you are alerted, have enough time to get your data, and sometimes competitors offer automatic migration

Since 2010, very few cloud storage or file sharing companies founded in the early 2000 have closed their doors, and these are the main reasons:

• Copyright infringement
• Piracy
• Fierce competition especially in prices always diminishing
• Bad management

Here are some examples we found:

Rapidshare / Founded: 2002 / Closed: 2015 (lasted 13 years)
A sharing service with 1PB of total space, where users could upload any kind of file to share to anyone with access to the file’s URL. Closing because of facilitating copyright infringement.
 
Megaupload / Founded: 2005 / Closed: 2012 (lasted 7 years) / Net Income: $175 million
A storage and viewing service via the web, with 25PB of total space. Closing because of copyright infringement.

Nirvanix / Founded: 2007 / Closed: 2013 (lasted 6 years) / Funds raised: $70 million
A public, hybrid, and private cloud storage service provider with IBM as one of its biggest customer. Closing doors for several reasons:

• Bad management: five different CEOs in six years
• With growth came higher operational costs. They had their own infrastructure built on Windows Server, which is more expensive than other solutions. They just couldn’t keep up with those costs.
• Couldn’t find a solution to attract more investments

Cirtas Systems / Founded: 2008 / Closed: 2011 (lasted 3 years) / Funds raised: $32.5 million
Provider of cloud storage controllers for storage management and TCO reduction in data centers. Closed because of high price, low performance and stability in comparison to Amazon S3 and others. Investors rescinded their investments for not getting their objectives accomplished.

Atmos Online / Founded: 2009 / Closed: 2011 (lasted 2 years)
A cloud storage provider that could be deployed as hardware or software in a virtual environment. Closed for not being able to keep up with competition.

Ubuntu One / Founded: 2009 / Closed: 2014 (lasted 5 years)
A file hosting service and music store that allowed customers to save data in the cloud. Decided to close the service assuming they couldn’t afford to offer the same amount of free space as Microsoft, Google and others.

LiveKive / Founded: 2011 / Closed: 2014 (lasted 3 years)
A cloud-based backup and sync service from AVG. Closed because of bad reviews and hard competition.

For sure, many others will not survive. But, for most of them, the investment to enter in online storage was small as they already have a comfortable computer infrastructure like the Amazon, Google, Microsoft and IBM, or being web hosting provider and just adding their own software for online backup or buying it from third party.

Finally we found only a dozen of cloud storage provider dying, that’s only one percent of the total number of companies involved in this field since at least ten years. It’s more risky to have your own data backuped in-house on disk or tape eventually unreadable or crashing. Furthermore, if you worried, you can think about hybrid backup with your data preserved at home and copied on a cloud service to avoid expansive outside replication built on another computer site.