Imagine if the sloppy way in which Microsoft handles customer data in the cloud had affected corporate customers thinking they were complying with Sarbanes-Oxley or other policies and regulations. There would be lawsuits for starters. (There probably will be lawsuits anyway, but the way our legal system works, there won't be any merit to them because consumer data doesn't (or shouldn't) represent a material financial gain or loss.)
So what about Newman's warning?
bandwidth limitations and the data integrity issues posed by the commodity drives that are typically used in cloud services... will limit what enterprise data storage users can do with external clouds.While Newman isn't wrong about the limitations of the equipment he's discussing, he's missing an important element, which is context. While Microsoft would like to think of itself as an enterprise-level outfit, it simply isn't. Its tradition of throwing out buggy software as part of a mid-1990s land-grab mentality was outrageous then, but it's even more outrageous in an era where customers entrust their applications and data storage to experts in the cloud. Its contemptuous attitude towards customers is just one reason that the likes of Salesforce.com, Rackspace and other companies born in the cloud era have struck such a chord in the market.
All while this has been happening, traditional vendors like IBM and Hitachi have been rolling out storage products and services for both so-called private and public cloud efforts that meet or exceed the requirements Newman himself discusses. The Storage Networking Industry Association published the first draft of a requirements document outlining standards for enterprise storage in June, but experienced cloud-based vendors like Amazon, eBay and IBM are already at or beyond that level of reliability and scalability.
Greg Schulz, principal analyst at Storage I/O noted on his blog yesterday that "just because there might be a few bad ones, not all clouds are bad," and suggests that customers demand "common sense best practices" from their vendors, cloud-based or not. Newman's point is not to be taken lightly, and customers would be well-served to check with their vendors to make sure they're using equipment that exceeds minimum requirements set forth by the industry itself and the analysts who study it.
The long and short: just because Microsoft isn't equipped to deal with, and doesn't care about enterprise customers doesn't mean cloud storage is threatened in any way. The economics of the cloud -- offloading infrastructure -- combined with the environmental benefits of centralized data centers, all but assure that cloud storage as a business will not only survive, but thrive.