Home / Issues  / The dark side of the cloud

The dark side of the cloud

The great thing about this cloud, this globally connected haze of data that permeates our lives and dampens our skin like some kind of high definition San Francisco (or equally Swanson) fog is that it lets you do anything pretty much anywhere. If I want to run some Baghdad bagel-seller’s point of sale from a system built in Newmarket, then I can. If my phone needs to talk to a server in New York to arrange a ride for me from Ponsonby to Parnell, then so be it.

And for many companies, some of which have been feted in the pages of this most excellent magazine, the cloud has allowed them to found and grow global businesses from New Zealand in a way that would have been impossible just 10 years ago.

But here, wide eyed digital meteorologists, is the thing. If the best thing about the cloud is that it lets you run a business from anywhere, then the most threatening thing about the cloud is that it lets you run a business from anywhere.

(Don’t bother reading back to try and make sense of that last bit. I’m going somewhere with this.)

Basing your global business in K Road, Khandallah or Kilbernie is great up to a point. If all you need to kick off a business these days is an idea, connectivity, money and talent, then any of those places will offer a chunk of those things. It’s only when you start to grow that the cloud begins to change from a white, fluffy and entirely benign one to something a little darker around the edges.

Getting enough connectivity and money as you grow is fine… assuming your idea is ridiculously good. Broadband is a commodity, pretty much, and both the global and local investment markets suffer from a shortage of brilliant ideas, not a scarcity of boring old cash.

It’s talent that becomes the issue. Growing our own IT and programming grads isn’t enough to feed the startup beast. We just don’t have enough people in education and far too few of them are studying what techcompanies need them to study. I’m not saying we can’t change that, and initiatives like OMG Tech (Vend CEO Vaughan Rowsell’s tech workshops for kids) are trying – but that’s not a six-week fix. So that leaves bringing talent in. 15,000 kilometres across the world to a country they’ve never seen outside Hobbit movies.

New Zealand, we keep telling ourselves, is a great place to live and work. Well, that’s certainly true if you’re a 40-something founder wanting to raise a family and still go to the beach at the weekend.

But is easy access to coffee and ukuleles, plus the odd walk in the sunshine during breaks from coding, enough to convince global tech talent to come here in numbers? So this brings us back to the dark side of the cloud. If the cloud means your world-beating Kiwi business can be based anywhere, and your growth is constrained by access to talent, how long will your shareholders allow you to base it in New Zealand? You couldn’t get further from your markets, your resellers or your developers.

Walks on the beach are great, and not being able to walk the length of Cuba Street without bumping into three other entrepreneurs is cute. But neither of these matter much to your investors in London, Tokyo or Palo Alto. In a way, this is a great problem to have. What to do when your tech company is so big it can’t fit in New Zealand anymore? But even great problems need solutions.

It will be interesting to see how the increasing number of New Zealand tech companies facing this thorny problem deal with it in the next few years. And, if the solution involves moving offshore, how that goes down back home.

Review overview