The Nirvanix shutdown, in which the company gave customers less than a month's notice before closing its doors, has caused data storage managers to take a more sober approach toward the cloud.
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While the shutdown is not likely to turn people away from using the cloud, IT professionals and industry experts said the Nirvanix incident shows a need to study a cloud provider's financial details as well as its technology. Organizations also need a plan for coping with unforeseen problems before committing to the cloud.
"As a customer, I'm going to look at a company's business model and see if they're actually profitable. When I evaluate a cloud company, I want visibility," said Cynthia Weaver, assistant vice president of IT at Detroit-based construction company Walbridge. "[Nirvanix] was everybody's worst nightmare."
Steve Scivally, technical director at Redwood City, Calif.-based Electronic Arts (EA) Inc., suffered through the Nirvanix nightmare. The closing came with EA weeks away from deadlines to push out several games with builds stored on the Nirvanix cloud.
"Who in their right mind would put swapping out cloud storage into their risk matrix?" he said. "It's not something to write into a business plan -- 'What if we had to swap out cloud providers next week?' Everybody had done the same due diligence on Nirvanix and didn't see this coming," he said.
Walbridge, Weaver's construction company, uses Microsoft StorSimple cloud controllers to handle primary storage for user files, Word documents, engineering design files and estimation applications. She also plans to move Walbridge's core infrastructure and Active Directory into the cloud.
Weaver considers Amazon and Microsoft Azure as safer bets because they are large, healthy companies that won't go away suddenly, as did the privately held Nirvanix.
"There's a reason we are with those kinds of partners," she said. "But if you go with a niche player, you have to review its business model. You have to review it regularly at every contract renewal. It's not enough to review it once. You have to consider who you are partnering with."
Review the technology and the business model
Chris Pyle, CEO at Champion Solutions Group Inc., was a Nirvanix partner taken by surprise when the startup informed him in September that it was closing its doors. Pyle said it took a few weeks to move his customers to a new cloud platform. However, he learned an important lesson.
"You have to pay attention to the financials as much as the technology," he said. "You have to spend time looking at the financials to understand the logistics."
James Bagley, senior analyst at Austin, Texas-based Storage Strategies Now, said the Nirvanix shutdown was mostly due to a failed business model. The company was founded in 2007 and had raised more than $70 million in venture capital, but its core business was cloud storage, which is capital-intensive. It also had a flurry of executive changes, with three different CEOs over the course of the past year.
"Your typical cloud service provider should have a sound business model, even if it is just selling excess capacity, which is what Amazon does," Bagley said. "It's also important for customers to explore and make sure they can get your data back."
Dan Streufert, IT director at medical device manufacturer MedPlast Inc., said it is important to find a provider that has enterprise features and can sustain its business model. MedPlast uses Microsoft StorSimple as an iSCSI backup target for three remote offices and its Tempe, Ariz., headquarters.
"Enterprise-quality storage is different than a consumer-level cloud," he said. "Providers charge more for enterprise-grade. Nirvanix charged a premium over Amazon, but they still couldn't make it work. People are going to be scared of cloud storage because of Nirvanix."
Retrieving data from the cloud is not always easy, said Connor Fee, vice president of marketing at Nasuni, which only uses Amazon S3 and Microsoft Azure as its cloud partners.
"Anything stored in the cloud is stored as an object; what customers really want is files," Fee said. "If they can manage to get all their data back, they're going to have to reverse-engineer it to build it back into files or documents that were broken down to send to the cloud."
EA's Scivally said the sudden Nirvanix shutdown left EA with approximately six weeks to move almost 100 TB of data to Amazon S3 to meet a deadline for shipping its "Battlefield 4" game. EA pulled it off, but Scivally said he was worried the entire time.
Scivally said he chose Nirvanix because it offered the ability to replicate data to dispersed geographic sites, allowing EA developers worldwide to work around the clock. With Amazon, each team has to load data separately to a site in its geographic zone. EA has Panzura Cloud Controllers in 20 sites around the world.
Still, Scivally said he's not bailing on the cloud. "The challenge would be too great, infrastructure-wise," he said. "The cost would be significant, and the time it would take to rebuild our own mesh between sites would be a significant undertaking. That's what we're using the cloud to replace -- an old point-to-point network. The cloud was put in place to improve the cost and capability of our architecture."
He said EA will implement Panzura's High Availability technology, which uses two controllers at the same on-premises site with one acting as a standby controller if the other becomes unavailable.
Cloud customers should also consider mirroring, Nasuni's Fee said. Nasuni offers Mirroring as a Service, saving data in two cloud providers' infrastructures. If data becomes unavailable on one cloud for any reason, the data is still stored on the other cloud. But mirroring increases costs.
Walbridge's Weaver said she makes sure data is stored locally and in the cloud. "You have to consider what type of redundancy you want," she said.
Cloud storage can also be a safe haven
While the demise of a cloud provider can be a nightmare, cloud storage can also be a savior if a data center goes away. Hospital IT teams have considered this scenario closely since a 2011 tornado leveled St. John's Regional Medical Center in Joplin, Mo.
George Adamo, virtual systems administrator at Waterbury Hospital in Branford, Conn., said he keeps enough data with a cloud provider so he can recover in the case of a similar disaster. He is considering using a cloud hosted by his backup software vendor, PHD Virtual Technologies, but still does the bulk of his backups on-premises.
"My take on cloud storage is that it's a great place to put bare-metal data and things you need to think about for an ultimate bare-metal recovery," he said. "What do I need to put out there in the cloud that I need to have if the enterprise went belly up? For example, the hospital was literally here today and gone tomorrow. If something like that happened, a disaster recovery (DR) center 35 miles away might not have been helpful.
"Is there anything you can do? Of course there is, but we don't have the pockets to build a DR center across the country," Adamo said. "But you can use the cloud for things like metadata. For example, we can't get anything off of tape without our [IBM] TSM database. That's a good thing to put up there -- also DR backups, switch configuration, basic documentation. It doesn't have to be a lot of stuff. I'm not talking about putting your big Oracle database up there. But with a terabyte of space or less, you can do quite a bit."
Senior news director Dave Raffo contributed to this story.