Cloud Computing and Land Grabs

The whole emergence of cloud computing is a very interesting phenomenon. It is most definitely driven by consumers demanding more and more mobile solutions but it is also driven by something else…money. The thing that’s been interesting is that much of the cloud computing world has been rapidly dropping prices. Consequently, this is hurting their revenue…at least in the short-term. So, how does this all work and where is it going…good questions. I don’t know that I’m smart enough to answer every possible question but here are a few of my thoughts and observations.

The first part of the model is oversubscription. It’s done everywhere from telephone and Internet providers to airlines and much more. Cloud providers are banking on varying percentages of their customers not using all of the service they’re subscribing to. For example, if a provider brings in 1,000 customers and offers them each 1 Terabyte of storage, the provider doesn’t necessarily need to have 1,000 Terabytes of storage to serve those clients. They need, maybe, 250 Terabytes to serve that customer group.

The second and, I believe, bigger part is a land grab.

One dirty little secret of cloud computing is that it is, for the most part, VERY hard to get away from a cloud provider. Solutions like Office 365 are standardized enough that they are relatively easy to move away from but more advanced solutions, like Amazon Web Services, are VERY difficult to move away from. Some services, like SalesForce and QuickBooks Online are virtually impossible to fully leave without losing at least some of your data. IF you can get away from the provider, it will usually be at a very high cost both in money and potential data you can’t take with you. Cloud providers know how difficult it is to move away from them and are banking on this. Once they have you, they can increase their rates and there is little you can do. We have been seeing this happen in a number of the services out there.

Even if the cloud provider isn’t planning on cranking up your rates, most of the pricing models that are presently out there are not sustainable, unless they are viewed as a loss leader. If that is the case, expect providers to either reduce the free/low cost services or stop developing those services and charge you for the newer solutions. Over the next few years, I believe the “charges” for those solutions will be quite a bit higher than we have seen in the past.

Don’t get me wrong. This isn’t to say that cloud computing is horrible, it is just to say that we need to have an accurate understanding of what it is. In its proper context, cloud computing can be cost effective and very scalable. Taken out of its proper context, you are taking a massive gamble with your data, the future of cloud computing and the future of your business…those are things I’m VERY hesitant to gamble with.

The Spirit vs the Letter of the Law in Handbook Policies

Often, we work with our clients to help write IT policies for their Employee Handbook. I have mixed feelings doing this as part of me wants to write out every detail of the policies while another part of me wants to scream and just say “do the right thing!” This exemplifies the different approaches to writing handbook policies. One approach is to detail every single possible element while the other is to provide an overriding vision for what is considered right and wrong and expect people to fill in the gaps with common sense.

My oldest daughter is a competitive CrossFit athlete and this tension on standards came up this past week in the CrossFit world. In the spring, a worldwide competition, called the CrossFit Open, runs over 5 weeks. Each week, a specified workout is published, along with defined standards on the performance of that workout. In the first workout, the athletes had to perform a “bar over burpee”. Part of the movement is to jump over a bar, loaded with weights. In almost every case, you do this with a bar that is loaded with standard-sized plates. However, one group looked at the rules and thought they might be able to get a competitive edge by putting smaller plates on the bar so it wouldn’t be as high off of the ground. Approval was received from a regional CrossFit Director but their policies state that approval must be received from CrossFit Headquarters. As it stands now, CrossFit Headquarters has said that the modification was not allowable and violated the standards because it unfairly modified the range of motion the athlete must go through. As a result, CrossFit has assessed a severe penalty on all athletes in the group.

On social media, there is a firestorm over this CrossFit “controversy” with people feeling strongly on one side or the other. The interesting thing, however, is that both sides are right. On the one side, the athletes followed the letter of the law and sought and received approval from someone they reasonably believed had the authority to approve their request. On the other side, approval was not received from the proper person and the standard was modified beyond the spirit of the standard.

I say all of this to point out that, as leaders, we can tend to live on one side of the fence or the other. Either we detail exactly how we want something done or we just tell someone to “get it done” or “do the right thing”. It seems that both approaches leave quite a bit of room for well-meaning misunderstanding. When we respect this, we can seek to find a way to convey our intentions while also providing adequate detail in the policies we write ensuring that our intentions are understood at both the detailed and conceptual levels.