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Tags: cloud computing | banking | icloud | dropbox

Don't Fear the Cloud, It's Just Like Banking

Don't Fear the Cloud, It's Just Like Banking

Late Apple CEO Steve Jobs talks about the music component of iCloud at the Worldwide Developers Conference in San Francisco, Monday, June 6, 2011. (AP Photo/Marcio Jose Sanchez)

By    |   Tuesday, 24 January 2017 04:07 PM EST

Even in 2017, it's a phrase that still induces chills in the technophobe: "The cloud is here, and it’s everywhere."

The cloud, for those of you held hostage in Something-stan for the last decade, is a romantic euphemism for "It used to be on your computer and now it's on ours." Or, more, correctly, it's on somebody's but nobody knows exactly where. "It" refers to essentially everything that you own that can be digitized: All your word processing documents, financial records, photographs, music, and computer programs (sorry: "apps").

The advantages are obvious: You can get at your stuff from any device with a browser and an Internet connection. I don't know exactly how many of those there are in the world but there are about five hundred more than when you started reading this sentence. In addition, even if your home or office computer crashes or gets swept away in a flood, your stuff will still be available and nobody else can get their hands on it. It's efficient, too: What's the point of having fifty million identical copies of Quicken or Word installed on PCs all over the world?

But, there are two obvious downsides, and that's what makes a lot of people nervous. The first is that, well, your stuff's no longer on your own computer. Who's taking care of it? What if it suddenly disappears and nobody can tell you why? How are you going to feel if you lose three thousand family photos, the scanned deed to your house and your spouse's nearly-completed PhD dissertation, and the only thing you get from the outfit that was storing it for you is an offer to refund the nine bucks a month you were paying for the service?

The second is that, well, your stuff's no longer on your own computer. What's to stop somebody from pinching it and ruining your life by misusing your data? Identity theft, blackmail, extortion...the possibilities are as endless as the scam artists' creativity.

Given all of that, it's no wonder that people are afraid of the cloud. But will that stem what the technocrats think is an inevitable tide of progress? Will ordinary people revolt against the software engineers who seem to be taking over the world?

They might, but the revolt will be limp, short-lived and doomed. It might not even be noticeable, except in isolated pockets where Luddites meet to drink malteds and spin vintage 45s.

The reasons are twofold. First, people can get used to anything. Second, the cloud has already been around for hundreds of years, in a far more scary form, and we hardly even notice anymore.

Let's take the second reason first. What's your most valuable possession, the thing you've worked all your life to accumulate, the thing that, if you lost it all, you'd likely sink into a near-suicidal depression and assume that life as you know it was over?

It's not your house, or your car, or your country club membership.

It's money. If you lost your house or your car or your collection of original Cole Porter sheet music, you could replace all of them, so long as you had enough money. With enough money, you can replace almost any physical possession, but if you lose your life's savings, you're sunk.

I'm not claiming that you're venal or money-possessed. Like it is to most of us who don't run hedge funds or investment banking firms, money is just a way of deferring purchases and ensuring that we can make them in the future, whether it's for our retirement or our children's education or a second home in the Catskills. There's no shame in admitting it: Money matters, and much of our life is spent in making sure we have enough.

So now that we've established that about money, let me ask you this: Where's yours?

You don't have it, except for maybe a couple hundred bucks, tops, in your wallet or the change cup in your car or the cookie jar. In other words, your cash on hand isn't even a rounding error in the financial balance sheet of your life.

So where's your money?

It's in the cloud, that's where. And I don't mean in some strained metaphorical sense, one of those that makes your eyes roll because, come on, nobody had his money in the cloud a hundred years ago because the cloud's only been around for less than a decade.

Oh yes, they did. Banks are the original cloud, and they fit the definition perfectly: Somebody else has possession of your stuff, you have absolutely no idea where it is, and you're totally dependent on them taking care of it for you.

In fact, banks are even scarier than the conventional cyber cloud: Your money doesn't actually exist at all. You can't see it, because there's no wad of bills somewhere with your name on it. Matter of fact, if everyone who had money in the bank tried to withdraw it at the same time, the bank would go bust and you'd be lucky to get a fraction of it back, because the bank doesn't have that much money. The company storing your photos and Word documents can give them to you within seconds; they're on the server somewhere. But not so the bank. Your "deposit" is in essence a promise from the bank to come up with the money if you need it. It's not a guarantee that they actually have it, because they don’t. If you don't believe me, check the federal regulations under "banking reserves."

Not only are you perfectly willing to part with your money, you probably didn't even do due diligence on whom you gave it to. You just handed it over and got a little slip of paper in return. That's alright: If you gave it to a savings and loan, your money is insured by the federal government, at least up to a limit. But what if it's with a brokerage firm? Or a commercial bank? Or Bernie Madoff?

And you're worried about putting photos of Aunt Tilly in the cloud?

If you are now, you won't be soon. First of all, it's not much of a risk, and it has nothing to do with the integrity of the service to whom you're entrusting your stuff. It has to do with redundancy. You can give the same stuff to any number of companies. My entire hard drive is automatically backed up twice a day to two different on-line storage firms at an annual cost that’s less than a single ticket to a Broadway show. And there's nothing stopping you from still keeping copies on your own computer, or on discs that you put in a safe deposit box or periodically send (encrypted, of course) to your brother-in-law for him to store in his garage.

Which brings us to the first reason that anti-cloud sentiment will die aborning: People can get used to anything. After all, they got use to handing over all of their money to banks, right?

I remember the first time I passed through a metal detector at La Guardia back in the 70s. I was shocked and appalled and couldn't believe Americans would stand for this sort of thing. Now, if a TSA agent says he's going to run his hands over my crotch, I spread my arms out wide and wonder what's for lunch. Not to mention that I'm barefoot and my carry-on is over there somewhere getting zapped with backscatter radiation so some nameless stranger can visually root through my underwear.

Whatever it is, it's only a shock the first time.

Like putting those photos of Aunt Tilly in the cloud.

Lee Gruenfeld is a Principal with the TechPar Group in New York, a boutique consulting firm consisting exclusively of former C-level executives and "Big Four" partners. He was Vice President of Strategic Initiatives for Support.com, Senior Vice President and General Manager of a SaaS division he created for a technology company in Las Vegas, national head of professional services for computing pioneer Tymshare, and a Partner in the management consulting practice of Deloitte in New York and Los Angeles. Lee is also the award-winning author of fourteen critically-acclaimed, best-selling works of fiction and non-fiction. For more of his reports — Click Here Now.

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People can get used to anything. After all, they got use to handing over all of their money to banks, right?
cloud computing, banking, icloud, dropbox
Tuesday, 24 January 2017 04:07 PM
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