Electricity was once generated where it was used; now it comes from the grid. So it is with computing power, once the province of mainframes and personal computers, and now moving into the “cloud”—networks of data centres that use the internet to supply all kinds of services, from e-mail and social networks to data storage and analysis.
The rise of cloud computing is rapid, inexorable and causing huge upheaval in the tech industry. The old guard is suffering: last week’s $67 billion merger between Dell and EMC, makers of computers and storage devices respectively, was a marriage forced by the rise of the cloud.
Disruptive newcomers are blooming: if Amazon’s cloud-computing unit were a stand-alone public company, it would probably be worth almost as much as Dell and EMC combined.
The gains for customers have been equally dramatic. Compared with older IT systems, cloud computing is often much cheaper.
It adds tremendous flexibility: firms that need more computing capacity no longer have to spend weeks adding new servers and installing software. In the cloud they can get hold of it in minutes.
Their applications can be updated continually, rather than just every few months. Individual users can reach their e-mails, files and photos from any device. And cloud services also tend to be more secure, since providers know better than their customers how to protect their computing systems against hackers.
But cloud computing makes one perennial problem worse. In the old IT world, once a firm or a consumer had decided on an operating system or database, it was difficult and costly to switch to another. In the cloud this “lock in” is even worse.
Cloud providers go to great lengths to make it easy to upload data. They accumulate huge amounts of complex information, which cannot easily be moved to an alternative provider.
Cloud firms also create a world of interconnected services, software and devices, which is convenient but only for as long as you don’t venture outside their universe.
Being locked in to a provider is risky. Firms can start to tighten the screws by increasing prices. If a cloud provider goes bust, its customers may have trouble retrieving their data.
These risks have already triggered a debate about whether the cloud needs stricter regulation. Some European politicians want to force cloud providers to ensure that data can be moved between them. That is too heavy-handed, not least because rigid rules will inhibit innovation in what is still a young industry.
The history of computing suggests that common standards may well emerge naturally in response to customers’ demands—just as in personal computers, where it is now much easier to use the same files on different systems.
Be quick, be nimbus
In the meantime, a few commonsense measures can reduce the risk of lock-in. Firms that use more than one cloud provider to host their data are less vulnerable.
So are those that keep their most important information in their own data centres—General Electric jealously guards its most valuable data, Walmart has a phalanx of its own developers so that it can move its data from cloud to cloud. Consumers can take precautions, too.
Some services are better than others at enabling users to move data between providers (Google does well on this score). Cloud computing promises its users many benefits, but don’t mistake it for some sort of digital heaven.