Cloud Storage Provider Nirvanix Shutting Down
Cloud storage provider Nirvanix has announced that it is shutting down. The front page of their web site is presently showing:
Giving customers just a few weeks to migrate their files to other storage providers has called into question the wisdom of using cloud storage services (or indeed any cloud services), particularly from smaller startup providers. Nirvanix was well funded, having taken a total of $70m in venture capital, with the most recent $25m round taking place in May 2012. Cloud commentator Ben Kepes has argued that this is a wake-up call for better due diligence, though he acknowledges that Nirvanix would have passed most scrutiny.
Cloud storage is a high margin business. In a recent presentation at CloudCamp London Matt Johnson from Eduserve illustrated that there’s typically a >3x mark up on equipment and running costs for storage services. Nirvanix would also have had costs for sales and marketing activities, which Joe Weinman points out in Cloudonomics can be the factor that makes a cloud service provider more expensive than in house provision.
As of 1 Oct an addendum to the original home page message makes it clear that Nirvanix has run out of money:
The first signs of the shutdown came on 17 Sep, with an email to customers advising them that they had two weeks to migrate data elsewhere. That deadline has now been extended to 15 Oct. Initially the company web site remained unchanged, and wasn’t replaced by the present shutdown message until 27 Sep.
UK based Aorta Cloud has been trying to pull together a rescue package for Nirvanix that combines fresh funding and industry partnerships (including IBM), but there’s been no update on that since 25 Sep.
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Ralph Winzinger Nov 25, 2014