Tech trends and business ideas

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Saturday, February 16, 2008

Live by the Cloud, Die by the Cloud

All that jazzed about SaaS suffered a rude jolt when Amazon web services (EC2, S3) had its outage this morning. We had suffered Skype outage before but that was free VOIP calls and you had a fallback. But this could ruin many a small business – especially if they’d put it up in the Amazon cloud. Twitter for one.

The retail to digital media to web services giant has made a lot of progress persuading small and midsize businesses to use its enterprise infrastructure for all their data storage and server needs. The cloud computing proposition sounds plenty compelling: Focus on building your business and leave the driving to us.

But all it takes is a bad crash to give people second thoughts. For the quality of infrastructure and the resultant cost savings that S3 offers, how many would really crow about one outage every two years…? Larry Dignan says you won’t recognize it in the next decade.

Meanwhile I had a look at Amazon’s 2007 numbers and some analysis. Coffee or tech? Looks like coffee isn’t a bad business. Amazon makes $207million on $5.67billion($0.48 earnings, $74.21 stock per share), or Starbucks $208million on $2.8billion($0.23earnings, $19.22 stock per share). Which look like a better business to you?

So, stay put? Nothing to worry? Live by the Cloud, die by the Cloud, I say.

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