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July 4, 2010

EMC Suddenly Cedes the Clouds

Nicole Hemsoth

There are cool ways to get a certain message across…even when that message is a painful one.

 

 

And you know, there are not-so-cool ways to do the exact same thing. 

Perhaps EMC, who suddenly announced they were not allowing customers to “leverage” their services–and to get out asap–should have instructed their web designers to remove the banner that proclaims in peaceful hues of lime green and turquoise, “Leverage the POWER of the cloud” considering that it is followed by the announcement:

Dear Atmos Online Customers,

We are no longer planning to support production usage of Atmos Online. Going forward, Atmos Online will remain available strictly as a development environment to foster adoption of Atmos technology and Atmos cloud services offered by our continuously expanding range of partners who offer production services”

To summarize the rest: pack up your stuff and go. Because there’s no support for Atmos. We are not providing any SLA or availability guarantees so hurry—migrate anything that matters to one of our partners. Like now. Yes, now.

Oh and…

“You are welcome to continue leveraging Atmos Online for development purposes as needed. These changes also do not affect our commitment to your success”

Well, now that you put it that way, EMC, here just before the fourth of July when your users were all nice and prepared for hot dogs and fireworks and now will instead be engaged in frantic migration attempts with minimal support, that makes it all seem a little better. Really.

Perspective on EMC’s Decision—and the Implications

There is no question that this is fodder for arguments against clouds as reliable and cost-effective paradigm shifts for IT since from here, it certainly looks like there has been no warning. If it was any other company, perhaps one that wasn’t as well known, the fear would be that they would disappear altogether–data in tow.

Info-Tech Research Group put EMC in their ranks of Rising Stars in March because, according to Info-Tech’s Research Analyst Laura Hansen-Kohls, at the time they seemed to have great promise. In an interview on Friday with HPC in the Cloud, Hansen-Kohls stated, “when we spoke with them before they were named a rising star, they were a major storage vendor so they had the market share edge that was on par with someone like Amazon would have, but also, at least when we spoke to them, they seemed to be making a significant investment in the cloud even though it was clear they didn’t have a defined strategy. Still, we felt that once they got the marketing push underway and communicated more clearly they could have competed with Amazon but from what we understand now, the competition with their partners was too direct so they decided to exit.”

While this is a perfectly valid and easy to understand reason for EMC’s sudden decision to pull all support and leave customers hanging without notice, it seems like there has to be something else going on here—what could have caused a company that has spent a significant amount of money and effort getting the word out about Atmos to abandon it in a way that leaves me looking for stronger phrases than “rudely abrupt” if there are any. Some have suggested that the costs suddenly became too heavy to bear all of a sudden and others have contended that agreements with their partners led to an immediate arrangement for them to stop competing or suffer the consequences. No one from EMC has responded to my queries and for those who did receive responses, they don’t go far beyond the cryptic letter on their website.

An Important Reminder

Hansen-Kohls suggests that this news does not bode well for the long-term perception of clouds, especially for smaller enterprises. She stated, “When Amazon got into cloud, for example, they did it because they had all this excess capacity and they could rent it out for a price without any data center or other major capital investment—when you’ve got vendors like EMC, they might not have that capacity just sitting around to sell so it could be that their investment was costing more than they were actually making—this is conjecture—it could be the revenue stream in wasn’t enough to offset the cost.”

In other words, it is critical to evaluate the business model of any cloud vendor before taking the plunge—not just what their existing SLAs seem to represent. If it isn’t clear that they have the resources to begin with and those resources are being culled sustainably, then it is not a good idea. Period.

When I asked Laura Hansen-Kohls whether or not there will likely be other companies with similar offerings jumping ship and taking the customer life rafts with them, she paused for quite some time before responding (although to be fair, I did catch her off guard). She replied, “Most of the other vendors we’ve spoken with GoGrid and Joyent for example, have a clear vision of what they want to achieve and have a plan to get it. Joyent will admit to this readily, but they’ve also suffered from an unclear message. They’re going through a rebranding process and are starting to pick up the pace so I think they’re aware of some of the misconceptions that float around in the cloud and the source of confusion that is caused by the marketing terminology since marketing ran away with the term before the tech was refined. Joyent could have had a similar problem to EMC but they’re picking up fast enough and gaining ground.”

The main message here, to quote Hansen-Kolhls, is that “knowing your risk tolerance when you go into the cloud is critical. If you’re putting data in the cloud you can’t live without, such as in a case like this, you have to know what your risk tolerance is for losing that data for a certain amount of time. If there are compliance restrictions, for instance, they can’t tolerate this at all—this is a real kick in the argument against moving into the cloud. EMC is not making any promises how long they’ll keep the data there.”

Like many others who read the news, which was so thoughtlessly timed with the closing bell on a pre-holiday Friday in the United States, Hansen-Kohl’s response to the customer email cited above was, “ I read it and I was shocked. No SLA, no production–get your data out because there’s no guarantee it will be here. It so sudden—there was no forewarning, thus no giving anyone time to transition—the enterprises who move to the cloud need a contingency plan so they can get their data out when something like this happens.