Cloud computing — online services like Mint, Google Docs, Google Spreadsheet, and other online applications that replace local desktop applications — is the hype of the day. Last year, they called it SaaS (software as a service). I guess they got bored with that. I have nothing against SaaS. I use Google Docs. I like it. I also use Google Spreadsheet and I’ve used Zoho Invoice. Very convenient and free.
But, at Macworld a few weeks ago, I overheard a terrifying story that has made me gone back to using local applications and storing my data locally (albeit always backed up). I was eavesdropping on two men who were at a software developer’s booth at Macworld talking to the developer about their awful experience. Both men own a business that had been using an online CRM application run by a European company. They had stored all of their customer data in that application including sales prospects, their sales pipeline, the deals to be closed, the status of sales activities, everything.
One day, they logged on and . . . it was gone. Not only their data and everything their business relied on, I mean, the company itself was gone. Panic ensued, they tried to contact the firm, but found out that the firm had gone bankrupt. The website was gone. Their data, gone. And what were two silly Americans going to do to try to get something back via a foreign bankruptcy court?
Now, you say, those men should have backed up everything to their local hard drives. Right. Do you back up all of the things you do on Linked In, Facebook, Zoho, or Google Docs to your hard drive? Think about it. Who has the time to do this? Don’t we all have too much trust in these online services? Who among us has bothered to find out what are the laws governing our data in the event that the company to which we have entrusted it goes bankrupt? And even if we are entitled to get it back, how long will it take? Where is it — the company, I mean?
Over the past few months I’ve been terribly suspicious of a lot of things I’ve taken for granted. Why? Because during the worst financial crisis since the Great Depression, it is very likely that horrid things are going to happen, for example, one or more of these online applications that I rely on will disappear. Why shouldn’t they? Most of them don’t charge you for anything. How on earth do they pay their staff, the rent, the coffee, the phone bills, the utilities, the CEO’s travel expenses? How are they making money? Or are they relying on the largesse of their venture capital investors? Good luck, I say. In the meantime, I’m keeping my data close to me, right here, by my bedside.
Everything old is new again: the Great Depression, software installed locally on your computer, government spending on infrastructure . . .
27 January 2009 at 05:23
Have you taken all your money out of all the banks and put them in your mattress yet? Its pretty much the same thing. Or at least it should be. Maybe we should be lobbying for some minmal protection and "bill of rights" for data stored in cloud apps as a more appropriate reaction?
27 January 2009 at 05:57
I think a more appropriate analogy is having your money in an FDIC insured US bank or an Icelandic online bank account (e.g. Icesave, which went belly up leaving a lot of European depositors out of luck because Icesave was not insured in many European countries). What's wrong with storing your data in your computer next to your bed if you back it up? You do 2 backups: one to a local hard drive, and another to a remote location. Much better than entrusting it all to a firm halfway across the world in a jurisdiction that does not provide any protection at all.
27 January 2009 at 14:59
Good points Esme.
One thing I always do, because I've seen bits of Google Docs either not save, or disappear after I know it said it saved, is that I do manual exports regularly. That way I have my own copy. Sometime, when I go back to a Google doc, if the stuff isn't there and sometimes it's not, I just restore from my local copy, then keep working. It's very fast to do this, once you just decide to do it regularly.
I'd say use Google docs.. but just save/export them a lot and your fine.
On the larger point about companies disappearling, there is another issue: data formats. IF the Saas system you use is set up in a proprietary data format, all your data might be very hard to copy in any constructive way. Regardless of the stability of the company, before you put anything anywhere, check the format and put your data somewhere you can backup.
Linked in, Facebook, yasn's as a whole, that I know of, don't use anything that would allow me to recreate or make sense of the data later. In a way, they are CRMs but I don't really know that they would export your data in a CRM friendly format for reuse in say, Sugar. I doubt it, it's part of their lock-in to keep you coming back. For businesses like the two guys you mention in your post, I'd suggest that they should have insisted in a format that was CRM compatible, and done daily local backups.
Lastly, I used an RSS feed reader aggregator ($30) a few years ago that several times deleted all my data unexpectedly. I had been doing daily backups because I was doing a study on the feeds, and when I tried restoring (something like 8 times) the backup file eventually got corrupted, and I didn't have a backup of the backup. Turns out the software maker had a known bug in his paid software that just deleted everything and refused restoring.
In each of these cases.. we do have to think about data, copies, and control, because recreating is very expensive / nearly impossible.
I think the answer is to use services with shared microformat standards so that the user can take the data from one system to another and have control. Companies aren't so up for that.. so we have to demand it. But its a tough problem, even for the best engineering team. I'm working with a team now, and there is no format for what we do. I've already spec'd a solution for our users, but I don't know when in our priority list we'll be able t solve for this.
mary
27 January 2009 at 21:47
We take for granted that our Google emails or our Facebook profiles are free on one hand, yet we expect these companies to store all our personal information with appropriate backups. The solution is a paid subscription model to most of these sites, where in exchange for payment, the site will back it up with the 3rd party as well as provide you with a standard (as much as possible) file that you can download. I, at least, would pay $20-$40 year (equivalent of one month of Internet connection) to know that my email is safe and sound.
30 January 2009 at 11:53
I think it's always been a concern in the back of my mind. We store a lot of our important information on our own servers using open-source solutions. We know everything is backed up every night to a fall back server, as well as downloading those backups to local machines.
That being said though, I do use an awful lot of other services, however I think anything mission critical is safely backed up locally.
If you're paying for a service you'd definitely want reassurance that the terms and conditions guarantee you security of information.
Of course these free services probably do 'warn' the user that they have no responsibility for the data, but users are so used to ticking the box that agrees to terms and conditions that it would probably be the right thing to do to show a summarised version of those T&C on sign up.
30 January 2009 at 17:20
Esme,
I think you have a valid point, but the example of the European CRM company is so extreme. I can see something like this happening with companies in any industry, but I would not point the finger fully at SaaS companies.
I work for a CRM provider, and this is always a topic. When working with your CRM company, email provider, data hosting company, etc you need to talk to them about this. Find out about their financial situation, find out what their 'D-Day' plan is.
For us, this is not a concern. We're growing faster than ever. The economy tanking has brough us more business as people try to organize their data and increase sales and client relations. That said… We do have a plan. If the time should come that we do have to close up shop every single one of our clients will get a backup of their data. If you're still worried… just call and ask me for one. It's simple to do and I don'd mind doing it. It's easy and makes you feel better.
30 January 2009 at 17:34
Bill,
I did not want to single out CRM companies or SaaS. I used to be the European Legal Counsel for a US publicly traded eCRM company so I understand the space very well and most reputable CRM firms would never just shut down and toss out their clients' data.
I wanted to bring up the issue of "free" online services, which these two unfortunate individuals used. I have used Zoho invoice, the free version, but only because I had no more than five invoices per month to send out. I always made PDF copies of those invoices on my laptop. But people should wonder – if the service is free, where else are they making money and how are they going to survive? In some cases, the company offering free service makes a lot of money from something else so no need to worry (although one should still back up their data).
So there are 2 issues: viability of the online service and portability of the client's data.
19 February 2009 at 15:30
companies using some sort of online crm rather than hiring an in-house developer to create a crm to be housed, well, in-house, are not too bright. you can only be so cheap on hiring programmers before using foreign programmers bites you in the butt. They got exactly what they deserved for outsourcing.
14 August 2010 at 19:32
What I see happening is that with cloud infrastructure, all the power will move out of the hands of the individual to the select few.
It paves the way for a central government to now control everything. Big brother on a global scale.
Everyone on this planet appears to be headed into a direction where they are forced to “hook in” to the system. Otherwise, they cannot operate. When things go cloud on a large scale, their is an element of control that the cloud companies can now exercise. They own all the apps. They store your info. everything is “theirs”. We – own nothing.
The potential manipulation and control that could then be exercised is unprecedented.
I don’t fear data loss. I fear data control.