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2013: The Year of Mass Cloud Computing Extinctions

Information Management, 2013: The Year of Mass Cloud Computing ExtinctionsCloud computing provides tremendous value for businesses of all types. But as we can see from the number of products that shut down in 2013, it isn't all a silver lining. 

Cloud applications, platforms and infrastructure offers a more flexible and agile IT environment, whether a large enterprise or a company that falls into the small-medium enterprise category. Cloud computing allows companies to use their capital for creating business value rather than having it tied up in expensive data centers. Another way to look at cloud computing is that it doesn't force an organization to be in the business of data centers unless that is its actual business.

A Look at the Products We Lost  

There is a dark lining, however, to the silver cloud. When an organizations deploys a cloud solution it relinquishes control of the computing environment to a third party — the cloud vendor. Most of the time that works out fine, but not always. Sometimes, the vendor will discontinue the cloud product or even go out of business with very short notice. A sudden shutdown can happen to any cloud vendor of any size at any time. Even major software companies can shut down a service, sometimes abruptly.

2013 has been a year of mass extinctions in the cloud computing space. Here’s a sample:

  • Google shut down both Reader and iGoogle. Both were free but Reader was widely used and relied upon for reading RSS feeds.
  • is shutting down, its SMB oriented task management software. Though not technically dead yet, unless there is a last minute reprieve it will be gone by the end of January.
  • Seesmic, a popular social media management tool was purchased by Hootsuite in 2012 and shut down this year.
  • Nirvanix was a cloud storage company that, despite a number of rounds of funding, abruptly sought Chapter 11 bankruptcy protection in October and shut down.
  • Dell terminated its vCloud infrastructure-as-a-service offering in favor of partnerships with Joyent, Zerolag and ScaleMatrix.
  • Sold, which handles the pricing and selling of products for customers, closed down after being acquired by Dropbox (in a transaction that still has many people scratching their heads).
  • Backupify suspended its free social media and email backup service. The company is still maintaining a paid service focused on businesses. Backupify built up the subscriber base numbers through free accounts, got lots of people to test their product for free, and then told them they had to pay once they became familiar with the service.
  •, a service that made it easy to send large attachments through email, was acquired by Yesware and closed down.

There were many others. These extinct or endangered products cover a broad range of markets, target customers and uses. They include infrastructure, platform and complete application offerings which target organizations of all sizes.

What Does This Mean for the Future of Cloud Computing?

The demise of these cloud products leaves us with a set of questions that affect cloud computing choices:

Why was the plug pulled on these cloud products?

The scary part is that there is no single reason. Nirvanix ran out of money, while several others were simply folded into other products. Others had become a distraction for the parent company. A number of free services became paid services.

Even worse, it’s not always clear why they ceased operations. has yet to say why was shuttered and no one knows what Dropbox’s plan is for Sold. It is incredibly hard to make good buying decisions when it is not clear what may cause the sudden cessation of service. One cannot plan for the complete unknown.

Many software and hardware products go end-of-life. Why are cloud products different?

In a word, control. In the case of an on-premises product, the buyer still has control over purchased devices or copies of licensed software. If the vendor goes bust or the product is discontinued, there is time to properly select and deploy a replacement. It may be years before it becomes necessary to complete a new buying and deployment process.

With cloud services, the buyer has no such control. When the vendor shuts down the service, it’s could be done in a weeks or months. only gave customers (paying customers by the way) a few months to find a different product to use and Nirvanix customers only had a few weeks. The relative abruptness of a cloud shut down is something that cannot be easily planned. This creates more uncertainty with a cloud purchase.


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