How to Avoid a Cloud Computing Gold Rush

How to Avoid a Cloud Computing Gold Rush

“The Internet is like a gold-rush; the only people making money are those who sell the pans.”
– Will Hobbs, American writer.

As you can see, equating computing with prospecting is not a new analogy. For those of you whose histories are a bit rusty, the Gold Rush was a manmade phenomenon in the 19th century when 300,000 people rushed to California to search for gold. While some did strike it rich, most returned empty-handed.

The Gold Rush had both a positive and negative impact on American history. On the negative, the migration resulted in the deaths of 100,000 Native Americans and rendered many prospectors penniless. On the positive side, it led to considerable development in California in terms of railroads, roads and small industries, converting San Francisco from an insignificant settlement to a boom town. The effect permeated to several other towns as well, accelerating the process of statehood of California in 1850.

So, why am I comparing cloud computing with the Gold Rush?

Well, for one, in spite of the fears surrounding cloud computing, there are several people at the end of the spectrum preaching it as the panacea for all IT ills. Secondly, there have been several instances of new entrepreneurs looking to get a slice of the pie. While some have succeeded, many have fallen by the wayside. After all, there aren’t too many’s out there.

Thirdly, several bigger companies have joined the game. Now, this can be a double-edged sword. Involvement of big names can make the technology sustainable in the long run, unlike the dotcom boom; on the other hand, if a collapse does occur, it will be all the more spectacular, not unlike the financial markets during the sub-prime mortgage crisis. With HP’s recent big splash while entering the cloud computing pool, this factor has assumed additional importance (See: HP Declares Ambitious Plans in Cloud Computing Space)

Finally, there’s the case of inflation of cloud computing stocks. Their meteoric price rise may be a true valuation of the transformational nature of cloud computing, or, it could be all hype. (See: Are Cloud Computing Stocks Overvalued?). The opinions are split on this one.

So, how do we safeguard ourselves from the negatives, if they do arise? The following points are addressed to both the service providers and consumers of cloud computing products and services.

First of all, we should be realistic. Thinking that cloud computing will make all our IT issues evaporate is not being realistic. Thinking that IT problems can be mitigated, is. Second, we should consider all the possible risks of cloud computing, and work actively to address them (See: Cloud Computing Risks (And How to Deal with Them)). Working cooperatively is definitely recommended. (See: Can The RSA Conference Help Dispel Cloud Computing Security Fears? ).

Third, we shouldn’t stop innovating and learning. The latter point refers to learning both from unexpected quarters (See: Unlikely Lessons For The Cloud Computing Industry) and from mistakes (See: Gmail Outage – Is Cloud Computing To Blame? ). The Japanese philosophy of kaizen or continuous improvement can help safeguard the industry from complacence and ultimate failure.

Careful prospecting keeping the above points in mind can ensure that the cloud computing migration ends up as a gold rush for all stakeholders strike it rich.

By Sourya Biswas


Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society.

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