Cloudy Outlook: Software Companies Pushing Products into the Cloud

By Charles Kelly, President, Computer Exchange

The cloud, whether you know nothing about it or use it every day, is affecting the way we buy and install programs, how we use and store data and will eventually determine what computers of the future will be.

First, the cloud is a place where you can store data and thereby protect it from fire, flood, tornado and theft or virus attack. Generally, in this simplest form you will have a user name and a password and can access your data from virtually anywhere in the world as long as you have internet access.

A second, more involved way the cloud affects you would be if you rented a suite of programs for a specific type of business that was cloud based. In other words, everything that you would do would travel through an internet portal and the program itself would reside on a remote server, protected, in theory from the dangers our own physical networks face.

The push to the cloud is not because it is necessarily so much better or because it is so much cheaper. It can be both cheaper and better, but it can also be more expensive and it can fail to live up to expectations.

The real push into the cloud is a push for control and recurring revenue.

Have you noticed that most new laptops have a space for a CD or DVD drive, but in most cases that space is empty? Why is this? My customers want their laptops to have an optical drive, but just like the floppy drive, optical drives are headed the way of the Dodo bird and will probably soon be extinct. It is part of the push into the cloud.

Microsoft and pretty much every other vendor wants you to rent your software from them, not buy it. Having you have to purchase your software online or at least make you download it from the web is one more step in that direction.

Today, you can purchase Norton Anti-Virus over the counter in our stores for $34.99 and for that, you get the disk, an alpha numeric “key” and a one year subscription. At the end of the year, you have a choice – you can renew your license for $60 online or come in and purchase another license for $34.99.

So, why is it more expensive to purchase a renewal than the license? You are paying for the convenience of not having to make the trip into a store, even though the cost of delivery from the vendor online is cheaper than making and distributing a retail product.

So, the software rental model is headed your way and the “you buy it and you own it” model will be harder and harder to find, just like finding a laptop with an optical drive.

In a few years, I would be willing to bet that your operating system will be a rental as well. Think of the enormous effort Microsoft has put into the promotion of Windows 10. It has been a free upgrade for a year and it is now installed on hundreds of millions of devices across the world. I predict that in a few years, the necessary upgrades and service packs to this operating system will come at a cost, perhaps an annual fee.

Why should the software companies sell you the cow when they can make you buy the milk, year after year? That’s the way it’s going. For example, Microsoft will sell you a five-user version of Office that can be installed on five devices, at a low initial price, but then the annual fees kick in. You have just become a renter, not an owner.

Of course when you do purchase the program at a retail store, you get a box and an alpha numeric “key,” but no disc. You also have to create an email address, even if you don’t need one. Many times customers forget the email address and password, and it becomes a hassle. In other cases the “key” is not activated at Microsoft and requires a lengthy phone call.

The software vendors will tell you that downloading software and installing it from the web is easier, but in fact for many of our customers it is not and becomes very frustrating.

Make no mistake, all of these changes – the disappearance of retail disk media, the disappearance of optical drives in computers and the rental model of software – have a great advantage…to the software companies. They will continue to push the rental model or the “you have to buy it every three years” model until everything that you used to own, software wise, becomes a rental.

That’s the way all of the fine print used to read, but now with better technology and the advent of the cloud, they actually have the ability to make it happen.

Computer Exchange has extensive cloud platforms available for the customers that need it or have decided that they want it. In our opinion, though, the cloud and all of the control that it often tries to extort from some customers often is simply another tool of someone in the IT industry who would like to have that control and the recurring revenue model that comes with it.

If you have questions about the cloud, contact us and we will give you all the options and let you decide, because you are customers to us, not cows to be milked.

Charles Kelly is President of Computer Exchange, with four locations in the CSRA: South Augusta, North Augusta, Martinez and Grovetown. Computer Exchange specializes in computer solutions for home and business. For answers to your computer questions, email him at

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