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by bstadil
6437 days ago
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Amazon currently have 3 separate data centers and additional S3 storage in Europe. This trend will continue as SLAs become more of a selling point for all Cloud purveyors. Second why do people think that your own data center will be better? It is like putting your money under the bed rather than in the bank. So people do that but not a good idea. Lastly we will see a common API emerge that will allow us to move with little impertinent. The emergence of Eucalyptus is an early indication of this. |
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That aside, the proper way to make the analogy you're making is not to compare investing in a CDS against putting money in or under your mattress, but rather to compare it with putting it in a certificate of deposit in your locally-owned bank or loaning it to a locally-owned business. Either of these would very likely have less return and a higher risk for you. However, you would be less susceptible to a global default cascade like the one that is happening now.
The reason that ...your own data center [would] be better... isn't that it's less likely to go down, but rather that, if everybody has their own data center, the chances of a global blackout go down drastically. This is precisely the analogue I was pointing out. If banks had stayed non-optimum and local, then (arguably) we would not be facing a (potential) global economic meltdown.
You may argue (rightly) that if you pursue these localist strategies when everyone else is pursuing these more profitable consolidated strategies, which carry this systemic risk of catastrophic failure, that you'd succumb to competition from others. This is the point of asking for regulation in the market, and (possibly) the case for asking for it here. At some point, almost by definition, the cloud computing market will commoditize. When that happens, the only way to cut costs will be do do without redundancy, if that is a legally available option.
The underlying problem is that people discount the cost/benefit of events that happen in the distant future, and the global catastrophes in these two systems always seems distant.
Finally, one may object that if redundancy is such a good idea, then it will happen naturally and never be eroded by market forces. In this case, then, there can really be no objection to legislation on the matter, because everyone will naturally comply anyways.