Do Big Clouds Pay Forward?

April 26, 2020

This spring’s sudden increase in work- and school-from-home arrangements has been a huge boon for cloud providers. Many of their business clients, however, have suffered revenue losses of as much as 50 or 60 percent this season. You would be wrong if you thought the biggest providers would have mercy on their small-business customers. Taipei Times reports, “Amazon, Microsoft Offer Little Relief to Cloud Clients.” We’re told Google joins those two in their lack of compassion.

A hallmark of the cloud business model has been flexibility, where companies pay for what they use. However, big providers have been pushing long term contracts with minimum spending thresholds. Companies who could once cover these minimums with ease are now stretched thin, and many feel betrayed. While countless landlords and regulated utilities have offered relief programs, cloud providers are doing little to nothing of the sort. Perhaps they are too busy counting their growing piles of coin. Journalists Mark Bergen and Matthew Day report:

“By the middle of last month, John Lyotier’s travel software business Left Technologies Inc was cratering with the spread of the COVID-19 pandemic. Seeking to cut costs, he reached out to his office landlord, who offered rent relief. Then he contacted Amazon.com Inc, asking to ‘explore creative financing opportunities’ for his monthly cloud-computing bill. The response was succinct: ‘Nope, that’s the way it is.’ … With the economic devastation of COVID-19, entrepreneurs such as Lyotier feel that the fate of their businesses rests on the benevolence of their cloud provider. While Amazon Web Services (AWS) is restructuring some large contracts on a case-by-case basis, according to a person familiar with the decisions, smaller companies are not receiving the same flexibility. Half a dozen start-up executives said that recent appeals to these cloud companies have gone unanswered. While older technology providers, such as Cisco Systems Inc, are offering credits to customers, the major cloud companies have not made any public announcements about deferring or cutting bills for clients.”

As this pandemic and its economic repercussions continue, perhaps big tech will decide to extend some grace to its clientele. After all, one cannot make money off of customers who have gone out of business.

Cynthia Murrell, April 26, 2020

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