What's the worst case scenario for the cloud computing industry?
Is it your service provider unexpectedly shutting down? Sure, that's probably one worst case scenario.
Here's another one, proposed by IDC analyst Rick Villars: A so-called "run on the bank."
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Think of IaaS cloud resources - virtual compute, storage and analytics - as a liquid asset, like money. Cloud resources can be bought and sold quickly, and vendors provide these services through an on-demand service, meaning customers spin them up when they want to.
But what happens if too many people request the same services at the same time? In the finance world, this would be like all of a bank's customers wanting their money out at the same time. There ends up being a "run on the bank." Villars offered the idea during a discussion at IDC's Directions event in Boston this week.
In the financial services world there are protections against this. The Federal Deposit Insurance Corporation (FDIC) exists to ensure deposits up to $250,000.
What happens if there's a "run on the bank" in the cloud? There's no FDIC there to back up the cloud industry.
So is this realistic? It depends on the provider. Mega-companies Amazon Web Services, Google and Microsoft likely will not run into this problem, Villars suggests. But, there are a whole lot of small to mid size providers that offer cloud, managed services and co-lo to customers.
What would they do if they have a run in their services? They could back up to AWS, Google or Microsoft. If they do that, will they tell their customers? Do these small and mid-size providers have plans in place in case there is a run on their services?
The questions raised by Villars could be worth asking to your service provider if you're worried about the issue.
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