A Crisis for Users

Employing these sites was originally a no-brainer-you just uploaded your summer-vacation pictures or business files, and then shared or used them as you wished. Now you have to wonder: Will my information still be around tomorrow? Canadian freelance photographer Ryan Pyle lost thousands of digital photos when Digital Railroad abruptly shut down last October. The online storage service posted a note to its Web site stating that it had run out of money and would have to close. Digital Railroad gave customers just 24 hours to remove their images before the files would be destroyed.

Pyle, who is based in Shanghai, China, lost over 7,000 images he had painstakingly edited, created captions for, keyword-tagged, and uploaded as part of his professional online archive. Pyle says the original digital images were safely stored locally, but the online portfolio was gone. A crush of customers scrambling to save images hosted on the company's servers limited access, Pyle says, and he retrieved only a few images.

The Cloud Loses Steam

Such failures are giving cloud computing a black eye. For years Internet firms invited people to store photos and data online, promoting the services as smart alternatives to storing data on a local PC or backup drive. AOL once stated in its Xdrive service's marketing literature, "You'll never have to worry that a computer crash or virus will destroy all your files because they will always be safe 'n' sound up on Xdrive." Xdrive officially closed in mid-January.

According to Kurt Scherf, vice president and principal analyst of market research firm Parks Associates, the online storage market is in the bust stage. "It comes down to economics," he says, adding that too many online storage firms are chasing too few dollars. "There isn't a lot of money to be made by parking someone else's data on your servers," he notes. "Companies without a business model are going to fail."


The End of Free?

AOL spokesperson Allie Burns says the AOL Pictures service couldn't financially justify its existence. "We took a look at what products didn't make sense to maintain. And ultimately we needed to reduce cost." Still, some free online photo services claim that they can make storing your digital images profitable.