The Data Liberation Movement
Despite the advanced portability of data, the world's largest cloud computing vendors are fighting to lock their customers within their proprietary formats. But it does not need to be this way. Data liberation is a movement that is gaining momentum among enterprises and cloud vendors alike. These progressive businesses and consumers desire to control their data regardless of its location.
09/17/10 5:00 AM PT
Renaissance Italy created an explosion of new ideas across art, science and culture, but the biggest idea to come from that era was the idea of the modern bank. By creating an independent entity to hold and protect customer assets, modern banking helped lay the foundation for modern capitalism, and all the wealth that it has created. The beautiful thing about banks is that when you put your money in, you still own it. You can withdraw it at any time, usually in a matter of minutes.
If only cloud computing could work this way.
Despite the advanced portability of data, the world's largest cloud computing vendors are fighting a raging battle to lock enterprises and consumers alike within their proprietary formats -- formats that fragment the market without providing any real benefits to the end users.
It is ironic that in a world where all of the world's information is available through a browser and the cloud app ecosystem is growing exponentially that the cloud has the potential to place data back into silos. Setting aside the prediction of which cloud vendor is likely to win the battle, or if we're in for another protracted conflict, the upshot for consumer data is rather clear: Get ready for data anti-portability.
It is no secret that the business benefits of the cloud are significant. Unfortunately, what many enterprises are finding out the hard way is that not all cloud vendors are created equal. Unlike licensed software vendors that take in a one-time investment from your company, cloud companies rely on continual revenues. This may seem academic, but it bears a critical point: It is to cloud companies' advantage to make it difficult to take data out of their systems.
While this does not mean that vendors are evil, it does mean that they have a vested interest in preventing customer churn through overly complicated extraction processes. Oftentimes customers, especially small to mid-size businesses, do not weigh the long-term effects of these cloud silos until it is time to extract all of their data at once.
From Vault to Bank
But it does not need to be this way. Data liberation is a movement that is gaining momentum among enterprises and cloud vendors alike. These progressive businesses and consumers desire to control their data regardless of its location. This movement signals a shift in power as cloud vendors would be transformed from data vaults to information "banks." Think of the uproar that would occur if banks suddenly required consumers to jump through hoops in order to get their money. While this sounds ridiculous in practice, a large majority of SaaS services operate SaaS way.
The reason why cloud vendors have been able to operate these data silos is that they have been spending an inordinate amount of time addressing customer concerns that seem much more important than they actually are, such as multi-tenancy. While cross-contamination data breaches are a reality, reputable SaaS companies have high-end security measures in place, so the chances of this occurring are slim. The devil is actually in the details -- the details of cloud vendors' terms of service agreements.
Enterprises of all sizes are often overmatched by vendor contracts. Legalese, jargon and a lack of legal consul can lead a well-meaning CIO or IT administrator to sign on the dotted line without understanding the long-term repercussions of the document.
Key Areas of Concern
Rather than taking you line by line through the language that should or shouldn't be included in the contract, here are three key areas enterprises should make certain are addressed:
- Privacy Policies: The issue of ownership often comes up in cloud conversations. Customers drop off their data to a provider, the provider then uses that data to either reach out to customers on its own platform or for other internal uses. Data liberation evangelists take issue with SaaS companies' willingness to leverage their customers' data for their own uses. Customers leverage SaaS tools to gain financial and operational advantages, not to enable providers to identify with new revenue opportunities. This is the equivalent of using Craftsman tools to build a house and, once it's completed, allowing someone from the hardware company walk into your house to check the place out. Users should own the things they create. Rather than simply using the information, cloud vendors should offer a quid pro quo arrangement with their users.
- Data Portability Standards: Information stored on a cloud platform should be portable throughout the entire SaaS ecosystem. Unfortunately, dominant cloud file standards have yet to emerge, but this will likely change as open source advocates like Red Hat begin to enter the cloud.
- NO Extraction Costs: This item dovetails with the previous item but warrants its own place in this list. Many cloud vendors will try and establish complex protocols and exorbitant fees to prevent customers from defecting to their competitors. One of the most common fees is called an "extraction cost." Under no circumstance should a company sign an agreement with a SaaS provider that charges money when its customers are dissatisfied.
The greatest hindrance facing the data liberation movement is customer apathy. Until a critical mass of dissenting opinions reach cloud vendors, there is no reason for them to modify their business practices because they remain stacked in their favor. Conversely, enterprises have only been offered our current proprietary cloud ecosystem so they are often ignorant of the data silos that hamper their employees' productivity and, by association, their profits. Data liberation can only happen when users demand the right to control their data. That time is now.
Rob May is the cofounder and CEO of Backupify.