Blog @ Digital Bazaar

The Looming Cloud Computing Bubble

Bubbles are Damaging

When something inflates, and there is nothing to keep it inflated, it deflates once again. In the technology industry, the Web was an inflation event and the resulting use by scientists and academics kept the Web around. Scientists and academics are also notoriously bad at over-hyping anything, which meant that expectations were kept in check until everything worked fairly well. The Web was quickly followed by the dot-com boom, another inflation event that promised to fundamentally change the way that society works, but it was over-hyped and over-invested, and inevitably led to the dot-com bust.

When the technology bubble collapsed in 2000 and 2001, what followed was a major funding gap from Venture Capitalists and Angels that had lost most of their funding sources in the collapse. This shut down many companies, mostly bad ones with no business model on the horizon. There were also a number of good ones that may have made it had we not been so wrapped up in the boom cycle that we were blind to the bust cycle that would inevitably follow. The media was filled with vague buzz words and dubious technologies then, so you would think that we would have learned to recognize these things if they were to happen again.

The real evil of bubbles is that they create a false sense of urgency and turn rational investment into partially irrational investment. All irrational investment that doesn’t pan out ends up being a loss – which does not help fund new technologies. Positive growth in our economy is strongly related to research into new technologies. When there is a drop in funding for new technologies, it weakens both our economy as well as our society.

It can be argued that bubbles and the resulting cash infusion do create a great amount of competition, which does lead to innovation. However, one must also think about the best method to create innovation – invest heavily in basic science and research, small start-ups, or to create bubbles. To strain an analogy – if you are in a building that has caught fire, is it best to create a stampede toward the outside or to have an orderly exit? We often get in trouble when we let our emotions make decisions that are best left to rational devices.

Cloud Computing is starting to smell like a media and IT darling created bubble. The science and technology behind it is fairly stable, but is still undergoing active development. There are a number of down-sides such as software lock-in, lack of data portability, platform lock-in, not really knowing who has access to your data, auditing practices, data segregation, and long-term viability that must be considered before truly understanding the benefits of a vendor’s Cloud Computing services.

Like all things – understanding what you’re getting into is vitally important – there is no one-size-fits-all technology solution, no matter what the media and IT companies would like you to think.

So the next time you see an article, company or person raving about their next generation Cloud Computing infrastructure – make sure to not get too excited and certainly grill them before buying into any of the hype. Let’s try and put our money towards good science instead of bubble technology.

No Comments yet

Sorry, the comment form is closed at this time.