Reaction to Nirvanix Shutdown Reiterates Importance of Backup
NEWS ANALYSIS: Despite Nirvanix's demise, other cloud providers continue to flourish and rapidly expand, indicating that one failure doesn't signify a serious industry problem.Nirvanix is a cloud storage service provider with a lot of promise. It has smart technology, smart people running it, previous VC backing and a number of name-brand customers, such as Fox Sports, National Geographic and NASA. But even smart companies can suffer crippling business problems; we could name a long list of IT companies that fit this category, including Sun Microsystems, DEC, BlackBerry and so on. Nirvanix is a rarity: a storage company threatening to go out of business. With the ever-mounting deluge of data being created in the world, there's always a need for somebody to house it. But Nirvanix apparently has other difficulties. The San Diego-based company started informing its customers on Sept. 16 that it was having financial difficulties in not securing another round of funding, that the market pressures to sell were too much for it to handle, and that they had two weeks to remove all their data from its cloud.
Two weeks. For companies with petabytes of data in the Nirvanix stores, this was not a welcome bit of information.
"The alleged failure of Nirvanix is unexpected but shouldn't come as a surprise. Cloud services are not immune to business fundamentals. Nirvanix tried to develop their own proprietary software and also manage their own infrastructure which is challenging and capital intensive. What we recommend for other service providers or enterprises looking at public cloud storage services is to also evaluate software solutions instead of developing their own solution. Most organizations have their own data centers and can simply install object storage and cloud storage solutions like Caringo's on the hardware of their choice, dramatically reduce their costs, optimize their resources and simplify ongoing management." Liran Eshel, CEO of CTERA: "Nirvanix's premature demise demonstrates that one size does not fit all. Nirvanix was trying to go for the high end of the enterprise market, but couldn't differentiate itself enough to justify its aspirations. With Amazon setting the tone for large volume, bread-and-butter storage, and bundling it with a full compute stack, other service providers must differentiate their offerings by either verticalizing them, making them part of a fully managed service or by delivering high value integrated application support for specific use cases like backup, disaster recovery, ROBO storage or file sync and share." Andres Rodriguez, CEO of Nasuni: "Nirvanix's news shows that, unless you do your homework, cloud storage can still be a scary place. Our ongoing testing of public cloud storage providers show that, right now, there are only two that meet enterprise standards for reliability and performance: Amazon S3 and Microsoft Azure. And even with these two providers, we've developed backstops like cloud mirroring in case of failure. Cloud storage is definitely enterprise-ready, but only if you use an enterprise-ready service." Nicos Vekiarides, CEO of TwinStrata: "The obvious answer is it raises more concern around the viability of some cloud storage providers. It certainly doesn't change the perception of what I'd call Tier 1 providers (Google, IBM/Softlayer, Amazon, AT&T, Rackspace, HP, Microsoft, etc.), but it can make users think twice about storing data at a smaller provider. At the same time, it raises awareness of the utility of using a multi-provider, hybrid cloud storage gateway. "The obvious effect is that some organizations evaluating cloud storage may be spooked in the short term. Long term, cloud storage adoption will still maintain a strong pace because the cost and administrative savings are just too compelling to ignore. We recently conducted a survey that we plan to release next week that demonstrates the clear advantages cloud storage provides from a disaster recovery perspective as well." The cloud business has spent a lot of time and money building up trust in the market. How much has this one failure hurt the industry? Nicos Vekiarides, CEO of TwinStrata: "The failure of a single vendor does not signify a failure of the entire industry. In the case of Nirvanix, they became a smaller cloud storage provider in what has evolved into a sea of behemoths. With their focus on the enterprise segment of the market, Nirvanix chose to pursue opportunities with longer sales cycles and a bit slower adoption than the mid-market and SMB. While the technology was sound, the strategy was ambitious, and they made a good run at it. In the end, the course they took can and will be dissected in various ways, but they simply did not succeed. "This one (well-publicized) failure may have short-term ramifications in terms of longer sales cycles as people consider their options more cautiously, but longer term, the obvious benefits experienced and communicated by the organizations using cloud storage provide a mountain of evidence to its value. "In spite of Nirvanix's outcome, other cloud providers continue to flourish and rapidly expand, indicating that cloud storage is here to stay."