Could the end of Nirvanix storage mean the end of cloud nirvana?

Nirvanix's collapse along with recent data privacy news should make enterprise IT wary of going all-in with cloud computing services.

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Cloud computing is often pitched as the ultimate in IT. Infinitely malleable, it's whatever package of flexibility, economy and let-someone-else-deal-with-the-hard-parts ease the proponent wants it to be. Events in recent months, however, have ripped deeply into the credibility of visions of cloud nirvana, reinforcing the value of in-house IT capability.

Not least is the failure of Nirvanix, a well-funded provider of enterprise storage in the cloud. Suppliers fall in every industry, but Nirvanix storage departed in a way that left customers deeply disappointed -- not just about one company, but about the prospects for cloud services overall.

Nirvanix appeared to be doing well, and then it faced sudden financial meltdown. With little warning, it told clients they had just two weeks to retrieve their data and make other arrangements. Two weeks would be a hellacious timeline for the most agile Web shop. But for enterprise IT shops running databases, applications and analytics that their businesses depend on day to day and minute to minute, that's insanely little warning.

Even optimistically assuming that a suitable alternate infrastructure or service was immediately available, two weeks isn't much time to get data out of Nirvanix storage, onto an alternate infrastructure, qualified for production use, and then up and running. That's especially true during a high-stress period when every other customer is rushing to do the same thing.

This kind of failure mode, in which everyone freaks out all at once, affects other shared services, such as those for Disaster Recovery as a Service. Recovering from a single-business failure like a data center fire is a great use for cloud computing. But if a storm, an earthquake or another disaster affects a wider area, everyone nearby will be forced to evacuate, fail over or restore simultaneously. The shared, amortized cost model that makes cloud look magically cheap is less appealing when everyone bangs on that shared infrastructure at the same time. There probably won't be enough resources to go around -- at least not with the great performance and responsiveness one can see when those shared resources aren't running at frantic, historic high-water levels.

Moving back on-premises after Nirvanix storage failure

Nirvanix's failure as a well-funded provider is noteworthy because we're deep into the so-called Cloud Age. But it's actually just the latest in a series of failed storage service offerings going back a decade. See also Cirtas and StorageNetworks, among others. "Go with big, proven, stable providers" is trusted advice against the vagaries of startups. But Iron Mountain and EMC also shuttered storage-in-the-cloud services in recent years. Where exactly is an enterprise supposed to go for safe, solid ground?

Home. Back to providing -- or at least managing -- those services in-house. Or to a multisource strategy.

Availability isn't the only issue. This year also revealed a widespread lack of network and data privacy. In June, Google argued its legal position: "A person has no legitimate expectation of privacy in information he voluntarily turns over to third parties." What?! This directly contravenes Google's privacy policy, not to mention numerous laws, social norms and business contracts the world over. That a core provider could officially promote such a careless attitude is chilling to personal, much less business, use of cloud. At the time, I wondered if you could stab cloud's promise in the heart any harder.

It turns out you can. Later in the year, we learned that national security agencies are siphoning off large swaths of all telephone records and data communications. One program, "MUSCULAR," apparently taps all Google inter-data center traffic. That shocked even Google. The once-theoretical risks around data privacy and security have become urgent concerns.

Now, cloud computing isn't going away. Even with proven privacy and availability exposures, the economics and opportunities remain compelling for many uses. The extreme "everything will be cloud!" mania, however, is dead. Most enterprises won't stand for it. It would be negligent to do so. They'll use cloud resources but in measured, cautious, hybrid ways. That makes the ability to provide flexibility, efficiency and elastic scalability in-house -- in other words, modern infrastructure -- central to the enterprise IT mission.

About the author:
Jonathan Eunice is principal IT adviser at analyst firm Illuminata Inc.

This was last published in January 2014

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Well, let's not confuse the discussion by going off on a tangent about Google and the NSA when talking about Nirvanix. The warning signs at Nirvanix were there six months before the company shuttered its service. Nirvanix had approx. 1200 customers, but it did not have a sustainable business model and essentially burned through its cash before it could raise more. No one stepped up to buy Nirvanix probably because they didn't have much in the way of intellectual property. If Nirvanix had been a more responsible storage provider the company would have given ample notice about shuttering their service or would have set aside a fund to wind down the business in an orderly fashion without leaving its customers stuck out on a limb. The moral of the story for cloud storage customers is to pay attention to what your provider is not doing. Nirvanix essentially stopped communicating with the world about six months before it went out of business. Customers need to pay attention and have an exit strategy for moving off a given provider's service platform.
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This is the point where an analyst like myself comes in and reiterates that service providers are STILL having problems pricing things as they should in order to properly run a contemporary cloud business model.
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