The Downsides to Cloud Storage

Magazine Contributor
3 min read

This story appears in the August 2013 issue of . Subscribe »

Q: Should my company really be sending everything skyward?

A: The cloud has changed the way we do business, archiving data and computer tools and making them available anywhere that has access to the web. But it's not perfect, and some benefits come at a steep cost. We asked Alen Peacock to play devil's advocate. He's co-founder of Space Monkey, a Midvale, Utah-based startup focused on making file storage faster and more cost-effective through (you guessed it) the cloud. Here, he points out some potential downsides.

You do not control the cloud. "When things go wrong--and they will--you're not likely to be OK sitting on your hands, waiting for someone else's employees to make things work again," Peacock says. "Consider what happens if you're the 823rd-largest customer of a business-critical cloud service.You're at the end of the line."

Peacock points out that almost all major cloud service providers have had outages and data losses. Amazon's cloud-computing platform, EC2, suffered at least three major outages over the past three years, causing some customers to lose their data permanently. Netflix, Pinterest, Airbnb and Instagram are among the companies that suffered service outages last year due to their reliance on the cloud.

It can be slow. "Shipping data across the internet to a distant data center is much slower than storing it locally," Peacock says. "Same goes when you need your data back." Cloud services have finite amounts of bandwidth to share among all users, so the more customers they have, the slower they operate.

It's expensive. In the short term, cloud services appear cost-effective--instead of paying upfront to buy your own equipment and software, you pay a low monthly fee. However, Peacock explains, "It's the long-term costs that bite you. It takes money to pay for server-cooling systems, bandwidth, fire-suppression systems, backup generators, security systems and patrols, and staffing for 24/7 network operations centers. And you'll pay for them every day, for years."

It sucks energy. "The cloud is anything but a clean, energy-efficient technology," Peacock says. "If the world's data centers, where those cloud-based programs are stored, were a country, they would be the 12th-largest consumer of electricity in the world, placing them between Spain and Italy."

No internet means no cloud. "Accessing your files from any device and having a copy safely stored somewhere else rocks," Peacock says. "But when your internet connection goes down or shuts off, so do you."

Service providers can be arbitrary and fickle. Users of cloud services can get caught up in complex policy and gatekeeping issues that can cause their accounts to be suspended or closed. And, as Peacock points out, "One service shutting you down can cause a negative ripple effect across your entire business."

loading...

More from Entrepreneur

Our Franchise Advisors will guide you through the entire franchising process, for FREE!
  1. Book a one-on-one session with a Franchise Advisor
  2. Take a survey about your needs & goals
  3. Find your ideal franchise
  4. Learn about that franchise
  5. Meet the franchisor
  6. Receive the best business resources
Entrepreneur Insider members enjoy exclusive access to business resources for just $5/mo:
  • Premium articles, videos, and webinars
  • An ad-free experience
  • A weekly newsletter
  • Bonus: A FREE 1-year Entrepreneur magazine subscription delivered directly to you
Make sure you’re covered for physical injuries or property damage at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business

Latest on Entrepreneur