[LINK] itNews: 'Cloud provider evaporates'

Roger Clarke Roger.Clarke at xamax.com.au
Wed Sep 18 13:49:06 AEST 2013

[I've warned about cloud risks in a series of papers:

[One was specifically on unreliability and survival issues, at:

[Here's an excellent example of the problem.  The article notes two 
other providers that have previously disappeared into the ether.

[And note that data-format interoperability standards are things that 
the industry waffles on about, not things that they deliver.]

Enterprise cloud storage provider to shut down
Allie Coyne
Sep 18, 2013 10:13 AM (3 hours ago)

Gives customers two weeks to move data.

US-based cloud storage provider Nirvanix has given its customers two 
weeks to re-locate their data as it prepares to surrender to reported 
financial difficulties.

The enterprise startup has instructed its staff to tell customers 
their service will be switched off on September 30th, according to 
multiple reports. The company is yet to comment.

Many Nirvanix customers may be unaware their data is hosted with the service.

Two years ago Nirvanix signed a five-year original equipment 
manufacturer (OEM) deal with IBM under which the software giant 
white-labelled the Nirvanix platform as the foundation of its 
SmartCloud Enterprise storage service.

This deal may have soured in recent months after IBM purchased 
Nirvanix competitor, SoftLayer, in July 2013.

Customers of Dell, Symantec and Commvault also bundled interfaces 
into their storage products to allow for multiple snapshots of data 
from their physical devices to be copied into Nirvanix's storage 

In the US, Nirvanix counts the likes of Fox News, National Geographic 
and the University of Southern California as direct customers.

Nirvanix isn't the first cloud storage provider to surrender to a tough market.

Iron Mountain and EMC announced the termination of their respective 
cloud storage services in 2011 and 2010 respectively. Both cited 
intense price competition from the likes of Amazon, Microsoft and 
Google as the reason for shutting up shop.

Mark Randall, director of sales and marketing at Australian hosting 
company Bulletproof Networks said it was "highly likely we'll see 
more casualties in the coming years."

"The bigger picture here is the disruption in the industry, caused 
primarily by Amazon Web Services."

Bulletproof recently signed on as a managed service provider for 
cloud services hosted in AWS and offers hosting services 
cross-connected to one of AWS' Sydney instances.

"Cases like this reinforce that customers have to do a more thorough 
due diligence on their cloud providers," Randall said.

"You not only have  to think about the viability of the provider, but 
also who your provider is relying on to offer the service. It is rare 
that any one provider owns the full stack - cloud service providers 
usually lease data centre space from co-lo providers, and then there 
are folks like ourselves supporting third party platforms like 
Amazon. You have look at the complete picture."

Randall said large customers have usually conducted thorough 
financial due diligence on Bulletproof, asking for the balance sheet 
and profit and loss over successive years.

"I expect more of these questions will be asked into the future," he said.
One of Nirvanix's partners, Aorta Cloud, is reportedly hoping to 
raise more funding to keep Nirvanix in operation. Nirvanix has raised 
a total of US$70 million from capital partners since its inception.

Aorta is among a swarm of cloud providers offering discounts to 
Nirvanix customers. Google staff this morning took to Twitter 
offering US$1000 to use on its Cloud Storage product to "get 
started", while others have touted tools that purport to help shift 
virtual machines from one cloud platform to another.

Nirvanix is yet to reveal what will happen to the data of those 
customers which fail to move off its services by the September 30 

Roger Clarke                                 http://www.rogerclarke.com/
Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA
Tel: +61 2 6288 6916                        http://about.me/roger.clarke
mailto:Roger.Clarke at xamax.com.au                http://www.xamax.com.au/

Visiting Professor in the Faculty of Law            University of N.S.W.
Visiting Professor in Computer Science    Australian National University

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