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December 2011

Cloud Computing – A Darker Side

Ease of implementing a solution, the ability to seamlessly scale, and having someone else responsible for system management, including backups, are but a few of the key benefits of cloud computing, ones that are fuelling its adoption by organizations.  Research shows that firms of all makes and sizes are incorporating these SaaS-type offerings into their information technology (IT) mix.  But for smaller organizations, those with less than a hundred employees,  the appeal of cloud computing solutions is heightened due to the very limited IT staff they possess, leaving them in an especially vulnerable position.


A recent example clearly demonstrates the unfortunate position a smaller company may find themselves in.  In this instance, a firm contracted with a major cloud solution provider, and as part of their  agreement, were allotted 1 GB of storage for application data.  The company’s business grew, and with it, their reliance on the cloud offering and the volume of application data.  Suddenly their provider announced that the firm had exceeded their storage quota by almost 140% (now using 2.38 GB) and wanted to extract additional fees associated with the expanded storage requirements.  Although cloud computing’s pricing is based on usage, it is curious that the overage was only detected when it became substantially large.


The idea of paying more for using more is common in the cloud world, but it was the actual pricing that sent a shock wave through this organization.  To become compliant, the provider offered an additional 1.5 GB of storage for $3,000 USD annually.  It’s when you compare this to the rates offered by other firms that you begin to question the integrity of their price.  For example, Amazon S3 offers 1 GB of standard storage for $.14/month or an annual fee of $1.68.  Although Amazon is at the low end of the online storage price spectrum, there are many vendors closer in price to Amazon than to the 1 GB of storage for $3,000 per year.  What further undercuts this cloud provider’s price, however, is the fact they recently launched a new, add-on file storage service, offering existing customers 30 GB for free


The crux of the issue is that cloud solutions don’t provide the option of storing your data locally, in your own building, or with another online storage provider.  Therefore, you are locked-in.  Furthermore, your reliance on your provider’s solution combined with the amount of data you’ve accumulated makes it extremely difficult to migrate to a competitive solution , leaving you at the mercy of your existing provider.   Cloud computing is tantalizingly attractive, much of it due to how easy it is to adopt—it’s the getting out that is far more problematic.


Ryck Marciniak (guest blogger)

Lendio: Take Your Money and Run

Raising money is one of the joys of being a CEO.  Several months ago I decided to apply for an SBA loan.  Rather than go to each bank separately, Lendio could handle it all for you.  

So I put in a request.  For the next two weeks I got bombarded with calls and emails from Lendio to get a subscription.  So I did.

Filed two requests.  Lendio took my money, dinged checked my credit score and then.


I could not followup because they didn't give me the banks contact information.  Support calls and emails unanswered.  I finally got one of the sales people and they said they'ld take care of it.  So they cancelled my subscription and deleted all my information.  (Yes I even wrote Brock Blake the CEO but he wouldn't respond)

Maybe they're doing better now.  I sure hope so.

Unions should help Employers with Health Care

There is a lot of consolidation going on in health care.  The result is the rise of oligarchies in delivery of healthcare, devices and pharmaceuticals.  And they have pricing power. 

AaSo where does that leave the worker and their employers?   While they would like to get the most bang for their buck (patient outcomes and quality of care), they have little negotiating power.   And labor unions have that skill.

Seems to me the unions and the employers are on the same side of the table on this one.  Perhaps it would be to their advantage and work together to try to get the highest value for their health care instead of the highest price.