Last week, Salesforce.com acquired the web conferencing provider DimDim for $31 Million. Immediately after the news was out, DimDim sent a mail telling their users that free and month by month subscription plans will end by 15th March, 2011. Those with annual subscription will be allowed to continue till the end of their subscription period and their subscription will not be renewed. This created some chatter in the tech media and twitter about DimDim’s abrupt end, Salesforce’s design and public cloud services. I thought I will put these things in context and offer my thoughts on the topic.
What is the problem?
DimDim’s acquisition and subsequent decision to shut down their services has left their users in a lurch and putting the business continuity at risk for many. This provoked widespread reaction among the pundits on such risks and what one can do to mitigate these risks. Alex Williams of ReadWriteCloud sees the DimDim problem as a risk for free services. Bob Warfield takes it a step further and asks if it is risky to be a Salesforce.com customer. Immediately after the news broke, Dennis Howlett wrote a post on ZDnet correctly links it to risks associated with the cloud services and offers some suggestions to mitigate such risks.
If you use stand alone services of any kind that are in any way business critical then at the very least:
- Check out the terms and conditions.
- Ensure you can get all of your data out of the service and
- Regularly back up that data anyway.
In fact, on the same topic of risk mitigation, I wrote a blog post in 2008 on the questions one should ask a cloud vendor before using their services (followed by a whitepaper with Ben Kepes on the same topic). To some extent, DimDim users could have reduced their risks by using these questions and other industry best practices while signing up for the service. Under the current circumstances, the key issue in front of the service providers is about establishing trust among the users. In the aftermath of DimDim shutdown, they have to really work hard to gain the user trust by taking a more customer friendly approach to business decisions.
Some thoughts on this issue and reactions
I have already written about such risks associated with cloud services and what we should do to minimize them. I thought I will revisit some of them in this context. Here are my thoughts:
- Even though Alex Williams was right to question the impact on the free services in the aftermath of DimDim saga, I would like to point out that even DimDim paid users were affected in the same way. Instead, as Dennis has pointed out, I would like to see this as a cloud services problem than just a free services problem.
- On Bob’s inference regarding the risks of being a Salesforce.com customer, I would like to point out that even though Salesforce.com has shut down two of their recent acquisitions, Etacts and DimDim, they didn’t do that with another important cloud acquisition, Heroku. They have kept Heroku independent and untouched (at least at this point in time). So, I wouldn’t see this as a risk with Salesforce.com but as a risk with cloud services, in general.
- Long time readers of this blog know that I strongly advocate Open Source as a SaaS Endgame. However, this is not an option in the case of acquisitions, especially by proprietary companies.
Ah Ha!! I told you cloud is bad for customers and you didn’t listen
As it usually happens in many tough situations like this for users, the immediate aftermath will be the blame game. There are many FUD mongers who are eagerly waiting to pounce on cloud services. They will clearly use this to shoo users away from the cloud services. However, it is important that we ignore the FUD and take a rational approach to cloud adoption. One should consider the advantages offered by the cloud services and contrast it with the associated risks, including business continuity risks like the shutdown of services. One should then see if these risks can be mitigated using industry best practices and then decide solely based on the merits alone. One shouldn’t let the fear and uncertainty to guide the business decisions.
I see the following things happening:
- More and more similar threats to business continuity leading to businesses moving towards cloud based open source applications than SaaS.
- Vendors who acquire other cloud service providers, especially the ones whose very survival depends on the success of cloud services model, take a more responsible approach and grandfather the existing users either by keeping the service alive or by helping them transition to the new service that results from the acquisition/merger.
- Users becoming more vigilant and take the necessary steps to mitigate the risks as they embrace cloud services for its advantages. This includes demanding stronger SLAs and data portability options.
Let us keep in mind that cloud services marketplace is still immature and we will eventually see more responsibility from the vendors. Users of these services will also learn from such events and do due diligence before using a service.
- Salesforce.com acquires DimDim: beware the Ides of March (constellationrg.com)
- Looking Back 2010: Salesforce, Heroku And Democratization Of Platforms (cloudave.com)
- This Week in SMB Tech: Bye Bye DimDim, Analytics in 2011 and Google Docs For iOS (readwriteweb.com)
- Dim Dim: The Risk of Being a Salesforce Customer (enterpriseirregulars.com)
- Salesforce Buys Web Conferencing Platform DimDim For $31 Million In Cash (techcrunch.com)