Do You Trust the Cloud With Your Business Critical Data?

Question

I am trying to increase my understanding of how users are accepting or not accepting storing their business critical data in the cloud.

• Do you use any software which stores your information in the cloud?
• Is it a shared cloud or is your data isolated?
• Does the data you store there sensitive data like tax ids?
• If you aren't using any cloud related software, why not? And, what would it take for you to use the cloud?

Full disclosure here, I am trying to increase my understanding of this because I am considering an investment in a technology offering using the cloud. I'm not trying to get exposure for this company. I am just trying to figure out if I want to park some longer term money I have in a company wanting to extend their technology offering beyond their internal use. They have the best overall investment management system I have seen. I am a beta user and will definitely continue to use it after launch and will transition away from using Buildium. But, I am trying to decide if I want to be an investor too.

Justin B. · Answer

Not a lot of people realize this but a lot of Amazon and Rackspace's "datacenter's" are just space they rent out in public datacenters (Which are just office parks).  Some people feel comfortable with the big names and others hate them because they feel being so big they are a constant target.  It all depends on who you talk to.

But Cloud is cheap when compared to doing it yourself. That's why everyone is moving that way.  When someone says, ok it's $30k to build your own exchange environment or you can get the same service for $200/month in our cloud.  People go to the cloud.

So I wouldn't worry about security in the cloud offering.  Make sure the company is well run and that YOU trust the company and those who run it.  If you have the right people and systems in place it doesn't matter what you're selling, it will do well.

Duncan Taylor · Answer

Thanks @Justin B. that helps a lot.

Duncan Taylor · Answer

So, if the cloud were in say, Amazon's or Rackspace's data centers, that would be better received than say a privately owned data center in a nondescript office park somewhere.

I run a software company, but not the one with this offering and not anything similar to this one. Our applications are all windows based desktop specialty business applications so my exposure to cloud computing is still new.

Justin B. · Answer

Duncan,

My full time job is actually in this area of technology.  I'm a Director at a company that runs a "cloud" service.  I will say that it all depends on the type of company, but if it's a well established company, your data is actually safer in the "cloud" than anywhere else.  Not only do those offerings have backups, but security is always a top concern and the cloud offering companies can afford security others cannot (due to volume).

Duncan Taylor · Answer

It is not appfolio. This is not a pre-IPO opportunity I am considering.

Thanks for your observations.

Chris Martin · Answer

Without seeing it, can't comment for certain. But given the industry dynamics, I'd say the assumption of user's "acceptance of relying on the cloud for the data storage" is probably a safe bet. Sounds like appfolio (not a start-up, pre-IPO), but the market is very fragmented... so maybe someone else.

As another reference, see the last RealPage 10-K where they don't identify 'cloud' user acceptance as an explicit risk factor.

Duncan Taylor · Answer

It is not intended to be a loaded question. It is not a start up and I am fully capable of reading a prospectus. The prospectus makes assumptions about users relying on the cloud and the liability they take on in doing so. You could think of it this way, I am trying to verify the claims relating to user acceptance, not the liability question.

I am interested in the acceptance of relying on the cloud for the data storage verses other options.

Also, this goes beyond being a property management solution. I was happy with Buildium for that but, I plan to transition to this in 2014 because of the holistic ability to manage my business.

Chris Martin · Answer

Loaded question? The short answer is 'read the prospectus' and you will probably get an answer. Virtually all PM software now is on-demand and 'cloud' centric. No serious PM player provides a solution that doesn't have highly available, on-demand, 24/7, data center managed product. Software-as-a-Service, or SaaS, is a requirement for any PM product offering.

This is a competitive, highly fragmented market with relatively low barriers to entry. If this is a start-up, IMO there are a lot of other more significant questions to answer about their 'business'.

Do You Trust the Cloud With Your Business Critical Data?

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