This doesn’t necessarily mean that the public cloud / SaaS (Software-as-a-Service) model is evil or wrong. It’s just a tool, a way of getting things done, and every tool has a purpose. The biggest problem with the public cloud is that it wasn’t built to solve your problems. It was built to solve Wall Street’s problems.
Before “The Cloud”
In the last two decades of the 20th century, we saw leap after amazing leap in computing power and exciting advances in software that took advantage of all of these new capabilities. Businesses and homes eagerly bought new machines and software at a rapid pace and enjoyed the efficiency and entertainment gains they allowed. Companies could sell the same products over and over again to a breathlessly eager consumer base, and tech stock valuations soared to astronomical heights – outpacing and overshadowing every other industry on the planet – because this rapid upgrade cycle was assumed to continue forever and this was built into the stock prices.
But in the first decade of the 21st century, things began to slow down… and in the second decade they largely ground to a crawl. Smartphones and tablets created new and exciting growth industries, but desktop and laptop computers as well as the software that ran on them just didn’t excite the way they used to. As a personal example, I bought a top-of-the-line desktop computer in 2012 and didn’t bother replacing it until it started to wear out in 2019. There was no real point. Even my new top-of-the-line machine seven years later was only 25% faster at most of the stuff I did. Yawn.
Software has been even worse. Most popular software was only being upgraded by users for bug and security fixes – functional improvements were rare. Software vendors shifted to user interface redesigns that imposed new learning curves without adding value – it was like someone coming into your office and re-arranging the contents of your drawers every few years. Many individuals and businesses started skipping as many “upgrades” as they could, as they often subtracted far more value and productivity than they added.
As the upgrade cycle ground towards a halt, Wall Street panicked. It needed tech companies with eternal increases in revenue to keep driving up index funds and keep people thrilled about investing in the stock market. While great fortunes in stocks can be made on all sorts of volatility, the overwhelming majority of investors are less-sophisticated and think that “stock indexes going up = good” and “stock indexes going down = bad.” Tech companies had been providing incredibly powerful marketing for Wall Street, and their massive P/E ratios were easy way for tech companies to attract investment, reward employees, and enrich management. Something had to be done.
Enter “The Public Cloud” and Subscription Licensing
In nearly four decades of IT industry experience, I had never witnessed anything even remotely close to how hard “Moving to The Public Cloud” and subscription-based licensing was sold. Software vendors build pricing models that severely penalized individuals and organizations that resisted, and many stopped offering “on-premises” and “perpetual license” versions entirely. Venture capital firms would refuse to fund new companies that did not embrace it. The movement took on an almost religious aspect of “believers” vs. “deniers.” The IT industry has always had its generations of stodgy folks that are simply resistant to any change, and it’s always important to make sure one isn’t being one of “those people.” This is not the case here.
That being said, there are certainly some areas where these new models make a lot of sense. Complex software that benefits from server-based hosting and is only used by a small number of people usually belongs in the cloud. Security software should almost always be sold on a subscription model, because constant updates are an absolute necessity. But the notion that everything must go is just marketing. It’s usually forcing customers into a pricing model that frequently provides minimal value and often even subtracts it. It’s solving Wall Street’s problem of getting consumers to buy upgrades forever, whether those upgrades make sense or not. What’s worse is that consumers no longer even controlled the timing of the upgrades and changes. It’s like being chained to a treadmill and locked out of the controls. If an ill-timed or buggy update disrupts your business… well that’s just too darned bad.
The Political Weather of The Public Cloud
Another disquieting aspect of The Public Cloud is that the biggest companies have become extremely political, strongly favoring certain views and displaying an increasing willingness to openly punish others – to the point of arbitrarily shutting down organizations they disagree with. Regardless of one’s own personal leanings (and I say this as someone who shares few beliefs with those on the receiving end of such partisan punishment), the notion that a tiny handful of mega-corporations are able to throw so much weight around and control public discourse should be extremely disturbing. Even if one is sympathetic to their actions now, that kind of power accumulation inevitably winds up becoming entirely self-serving. As the eternally famous line from the movie Return of the Jedi goes: “It’s a trap!” In the long run, it’s best to give them as little control over your organization’s destiny as you can.
The Rise of the Micro-Servers
One of the big attractions of The Public Cloud was that servers have traditionally been expensive to both purchase and maintain. With the rise of Linux and open-source software, this is no longer the case. Highly-polished, professional-grade systems are now available to organizations at incredibly low prices, are exceptionally inexpensive to operate, and dead simple to replace. It’s to the point where they’re so cheap they’re almost “consumable” assets. For many organizations, these can replace several expensive public cloud services, often several hundreds of dollars per user per year.
Additionally, these systems are not incentivized around “change simply for the sake of change.” They are updated regularly, but not excessively. Not only are many of the endless “death-of-a-thousand-cuts” monthly and annual costs eliminated, the soft costs of endless upgrades that provide little-to-negative value are substantially reduced as well.
Micro-Servers are bringing back the attractiveness of what’s called “The Private Cloud” – systems you can still access remotely, but are internally-owned and manage.
BrilliantRoot Is Here To Help
At BrilliantRoot, we believe that every organizations’ needs are unique. If they are best served by having services in the Public Cloud, no problem. If it makes more sense to use Private Clouds, we’re here to make that happen as well. For most businesses with fewer than 500 employees, we’re seeing the economics shift dramatically in favor of Private Cloud. In fact, in most cases we can offer all of the material benefits of Public Cloud services and add many powerful additional security features while reducing IT spending. Let us know when your organization is ready to find out if Private Cloud services make sense for you.