On March 14, Dropbox announced it was moving out of the Amazon cloud. It makes perfect sense for Dropbox but should not be an excuse for a reluctant IT department not to proceed with their cloud implementation plans. Here are some of the reasons why it is the right move for Dropbox but unwise for a corporate IT department.
Dropbox is in the business of cloud services
Dropbox is far from being the dominant player in the cloud storage. Google Drive, One Drive and Box offer competing alternatives that are not difficult to migrate to. Likewise, AWS faces tough pricing pressures from their competitors.
Dropbox earns their profit margins on the difference between their technology investments and earnings from the services. So does AWS. Both compete with other cloud services providers in their respective areas. Each of them needs to keep lowering the costs while also earning money.
Dropbox is a technology company
Unlike a corporate IT department, Dropbox is a technology-first company for whom IT is a profit center. With heavy investment in technology they are able to innovate and invent new approaches to distributed storage.
In his Wired article on Dropbox exodus from AWS, Cade Metz says:
Over the last two-and-a-half years, Dropbox built its own vast computer network and shifted its service onto a new breed of machines designed by its own engineers, all orchestrated by a software system built by its own programmers with a brand new programming language.
Only a handful of corporate IT departments with tech-company budgets can afford to invent their own hardware, network storage protocols, and programming languages. The vast majority of corporate IT departments rely on old guard vendors whose main source of income is in milking of the installed base.
Dropbox can attract and retain top talent
In his article called “How To Find the Next Generation of IT Leaders” IDG contributor Esteban Herrera writes:
Corporate IT is not sexy. In my generation, IT was an attractive career. We knew the Internet would shake things up, and corporations had big appetites -- and big dollars -- for people who could implement and manage corporate systems. Today, few young people get excited about a career in corporate IT. For one thing, they know it is a job they could lose to outsourcing -- they might as well work for the service provider and have more job security. The truth is most won’t even do that. Young people with technology skills want to be with Google, Uber, Amazon or the next Facebook. Not only do these employers offer fun, millennial-friendly work environments, they also offer jobs that are quite lucrative, and their employees can enjoy knowing they really are changing the world.
Corporate IT was never sexy or attractive to top talent. Four year computer science programs never prepared graduates for a career in the maintenance of business computer systems -- nor do computer science students want to.
Dropbox is routinely listed in the top tier of the most desirable companies to work for. Dropbox employees consider Dropbox the best company to work for and write articles on what it is like to work there. Try as they might, corporate IT departments simply do not have the budget and the culture to compete for the top talent.
Final thoughts
Outsourcing is a simple manifestation of the capitalist division of labor, in which one company hires another to do something that they can’t do on their own. Cloud computing commoditizes routine and yet expensive tasks such as infrastructure and data center maintenance. Dropbox’s decision to roll their own cloud infrastructure does not mean that AWS is inadequate for more traditional corporate IT. IT departments should only roll their own technologies if they have the budget and the talent to do it better than a cloud provider.