It was announced earlier today that the popular bookmark sync service XMarks is about to go under. In a post on their blog, owner Todd Agulnick admitted that the company couldn’t find a profitable business model.
[sarcasm] Profitable business model? But I thought the cloud was a free-for-all! [/sarcasm]
For those who don’t know, XMarks allows you to sync your web browser bookmarks and saved passwords between browsers on multiple computers, even multiple browsers. It’s a lifeline for many people who have many different passwords, user names and bookmarks that they depend on every day. I’m one of them.
It’s sobering when a failure like this happens. The first question on everyone’s mind: What’s next!? To their credit, Xmarks makes several suggestions for similar services in their “We’re going down” page hosted from their site.
The challenge with XMarks and all “free” cloud apps is that you, the consumer, have little say in if the product will go on or not. This is true of any free service. When you become dependent on these free services, you become an investor to it. Not with your money, but with your confidence that they’ll be around. However, there’s no guarantee that someone is going to come around with the money needed to make sure that service stays around. It’s all on the owners of the business to make that happen – you don’t get to have much (if any) participation in that.
With the economy slowing down and tech starting to “right” itself, investors are less likely to look at services like Xmarks and see dollar signs. I have to imagine that tech investors want stable and low risk investments. When services don’t have an inherent revenue model (ad serving is the most common) then the service is at a high risk of disappearing.
Clouds introduce a more challenging limitation than their box-software bretheren: When a cloud vendor decides to shut down, you have no ability to continue to run it from your computer until you’re good and ready. You are at the mercy of that cloud provider. For a service like XMarks, the stakes are fairly low. Nobody is going to lose wads of money over XMarks going down. But what if it was your backup provider, data storage provider or CRM provider? What if they were to close their doors and disappear? What’s to keep that from happening?
The point is – make sure you have redundancy. Look at every cloud app that exists today that you use or intend to use and ask yourself – If that service shuttered tomorrow, what would I do? Consider your plan for using traditional software and local computers and servers. Consider the costs and risks involved. It may be time to do some serious thinking about how much you trust your cloud services and data.