What does the recent news of possible trouble at Evernote mean for businesses who rely on cloud services?
Evernote, a popular cloud service for storing notes, lists, and documents, was in the news recently with reports that many of their senior management left and the new CEO is looking to fix a long list of problems in the coming year. There are articles on how users can back up their years of Evernote data in case the company shuts down and the service goes offline. While I'm hopeful that this won't happen despite whatever troubles they may be having, one can't help but wonder what would happen if a company that provides business critical services were to close. It's also another reminder that nothing is forever.
Speaking as a business owner, when it came to technology years ago, our clients and our own company bought mostly products, such as phone systems and servers for email, applications, and files. If and when a product vendor went out of business, we (or our clients) still owned the products and could continue using them for at least some time while planning for the future. For example, Nortel went out of business many years ago and Toshiba recently discontinued their entire line of business phone systems. Companies using either of these systems were not forced to abandon them. Rather, the products continued to function and third-party companies still offer service and support.
Now, more and more business technology is being provided as a service as opposed to products that are purchased and owned. This includes hosted phones and email, cloud applications, and even hardware as a service.
When it comes to services, such as telecommunications and cloud, everything changes. In the event that a change needs to be made, the more important and critical the service is to the business, the more involved it is to make a change. Businesses need to ensure that cloud services they rely on not only meet all of the functional needs of the company, but that they are also highly likely to be around well into the future so they are not saddled with the headache of a change.
When cloud services are discontinued it is often because the company itself ran out of cash. In the early 2000s, the telecom shakeout caused thousands of businesses to be without phone lines for weeks at a time as many telephone startup companies ran out of cash and closed their doors overnight. More recently, companies that shut down include Nirvanix in 2013 and Ajubeo in 2017. These were storage and connectivity providers who left their customers scrambling to replace the services they relied on. Other times, the parent company itself may be fine, but they decide to shut down the cloud service, as was the case when Verizon shut down its business cloud in 2016 (see When Your Company’s Cloud Service Gets Shut Down) followed shortly after by Cisco shutting down its Intercloud service. Even Amazon has discontinued some services within its AWS world.
As our own company relies on several cloud services (including our own Boxtop platform for running our desktops and servers in the cloud), here are some guidelines I try to follow to protect ourselves:
- Profit first. While some of our cloud providers may have outside funding, all of them are cash-flow positive. I cannot have a mission critical business service living with a company that is burning through cash with mere hopes of turning a profit in the future.
- Track record. Aside from being profitable, how long has the company been around and how many times in their history have they changed direction or offered new services? I prefer companies that tend to stay the course.
- Growth. When it comes to business critical services, especially high-touch ones requiring regular support such as IT and software, relationship is important. If a company is so focused on growth that it may be exponentially larger in a few years, will they still care about their customers enough to provide the level of support that we need?
- Company focus. Is the service I'm buying a big focus of the company or a side product to their main business? Side products tend to get less attention and sometimes do not last.
This certainly should not discourage anyone from going cloud. When done properly, cloud is great for business, often much better than the on premise alternative. Choosing what to put in the cloud, who to put it with, and how to ensure long term success is something that needs to be done with care.