Nirvanix cloud collapse seen as a canary in the coal mine for IaaS

Beth Pariseau, Senior News Writer

A major cloud storage service provider has abruptly closed up shop, according to reports, leaving cloud users to hedge against a similar disaster in other types of cloud services.

San Diego.-based cloud storage provider Nirvanix told customers and partners this week that data should not be replicated to its service any longer and that existing customers must move data off of the cloud storage service by next month, according to a TechTarget report. Nirvanix has declined to comment.

Everyone needs a backup plan.

Richard Calmas,
CEO, Neighborhood Pay Services

This cloud service shutdown is a fairly spectacular one -- Nirvanix has collected some $70 million in funding since its launch in 2007 and is an IBM SmartCloud Enterprise storage services provider. Some reports had hundreds of customers and dozens of petabytes of data under management. The company's product viability was also labeled "excellent" by Gartner Inc. in a December 2012 report comparing public cloud storage vendors.

This scenario gives IT pros that rely on services within the evolving cloud market reason for concern. In an Infrastructure as a Service market, where Gartner estimates Amazon Web Services (AWS) has more than five times the compute capacity in use than the next 14 providers combined, it's easy to surmise that some of the smaller IaaS players won't make it long-term.

Prepared for dissipating clouds?

Some enterprises use small IaaS providers, citing factors such as ease of use or greater flexibility in deploying resources than AWS offers. What will they do if one of these providers goes under?

"We believe in redundancy," said Richard Calmas, CEO of Neighborhood Pay Services LLC, a financial service provider for the housing industry based in Newton, Mass., which uses IaaS services from AWS and smaller provider ProfitBricks GmbH.

The company had used AWS alone, but ran up against problems with its user interface and customer support, prompting it to switch its primary IaaS location to ProfitBricks, which is headquartered in Germany but has a U.S. location in Cambridge, Mass. But AWS is still used for backup to hedge against just this situation, Calmas said.

It does add cost to sync the same data between two clouds at once, but "it's the cost of doing business," Calmas said. "Everyone needs a backup plan."

The belt-and-suspenders approach of a mix of cloud and local resources has worked for Brickfish, a Chicago-based social media marketing software provider. CEO Michael Mullarkey said his company uses multiple cloud providers but conducts its business primarily on NaviSite's cloud. The company also performs local backups, which are sent to Iron Mountain for disaster recovery purposes.

"One of the benefits of cloud is that you can take a snapshot of what you have and virtualize it somewhere else pretty quickly," Mullarkey said.

Still, in the worst-case scenario in which data is lost, Mullarkey said he's keenly aware that clients aren't going to blame cloud providers such as Rackspace, Amazon or NaviSite.

"They're going to look at us," he said.

In addition to IBM, Nirvanix had a number of reseller deals with companies, so organizations might not even have known its data was stored with Nirvanix until this week, pointed out Carl Brooks, analyst with 451 Research, an IT research firm based in Boston.

"White-label partners of Nirvanix might have been banking on Nirvanix and not telling anybody," Brooks said. "If customers aren't able to know the full chain of custody of their data, they could be in serious trouble."

Brooks advises careful evaluation of data that is put into the cloud, as well as thorough due diligence in finding out which partners a company works with to provide a service.

In the meantime, Brooks said, cloud storage services have matured at a faster rate than IaaS, where there are still debates about things such as OpenStack, and the industry is still developing. Thus, cloud storage failures -- which have included an EMC Atmos online storage service, as well as sites such as Megaupload -- could be a harbinger of things to come as the IaaS market matures.

"Nobody can treat cloud as a magic cure-all; everything fails," Brooks said.

Beth Pariseau is senior news writer for SearchCloudComputing. Write to her at bpariseau@techtarget.com or follow @PariseauTT on Twitter.

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