Netflix has just confirmed everyone's worst fear about the cloud.
Make no mistake, Netflix is a cloud-based application. It delivers (and collects) data online for a monthly fee. At work, I get data about my customers, suppliers, employees, activities, and emails streamed to me. At home, I get the same information -- except it's about Kimmy Schmidt, Queen Elizabeth, and a bunch of teenagers in the '80s exploring the Upside Down. Different data, same type of delivery. It's all on the cloud.
This past week, Netflix did something that makes me -- and many of my business clients who rely on their cloud-based accounting, customer relationship management, collaboration, and email systems -- shudder. The company raised its prices. A lot. Thirteen to 18 percent, or about two bucks a month for the typical subscriber.
That's a bad, bad sign.
Why? Because we're all going to pay it. I certainly am. Like my company's cloud-based systems, I've come to rely heavily on Netflix. What will happen to those women in prison? Will there be another visit to Hill House? Is Jane really a virgin? Who the hell is Jane? Will Jason Bateman finally accept that the new episodes of Arrested Development suck and instead just focus on Ozark because that show is awesome? Forget religion, pets, children, and sunsets. Netflix has become my reason for existence. Here, take the extra two bucks. Just gimme Kimmy.
The sad thing is that not only does Netflix know this but so does Microsoft, Amazon, and Google, the three largest providers of web-based services. So also do Salesforce.com, NetSuite, Square, Intuit, Dropbox, and hundreds of other cloud-based systems that have become mission critical to businesses like mine. The people who are running those companies are not only watching Mindhunter on Netflix (it's about psycho-murderers, and hopefully you've picked up the irony) but they're also licking their chops.
Why? Because, trust me, the CEOs at each of those companies are saying to their minions: Hey, if Netflix can raise prices, so can we! Sure, we may take a little heat. But our bulging bank accounts will make up for that. And besides, what are people going to do? Leave us? Naaaaah. They'll just pay.
And we will. Don't believe me? Well, Google just followed Netflix and announced an increase in its business G Suite prices. Here we go ...
That's the worst thing about the cloud. It's not about security or performance. It's about the loss of control. Once our businesses move to a cloud-based system, then we're addicted to it, just like Californians have become addicted to Jane the Virgin, which confirms many of the suspicions I've had about the people who live there.
As a business person, you will do what the rest of us Netflix users are doing when you face an inevitable increase of your monthly fees. You will continue to drink the Kool-Aid and pay your dues. With a cloud-based application, you've given up the control of your IT expenses to some creep in Silicon Valley who will adjust your monthly fees on the basis of his (yes HIS, because it's Silicon Valley after all) mortgage, yacht payments, and alimony. It's all about control, and Netflix raising its prices just proves that we -- the cloud customers -- have very little control over what our cloud vendors can charge us. We're stuck.