Why Cloud Storage May Be Payments’ Stealth Game-Changer

Everyone is always looking for some secret sauce for innovation, disruption and growth.

Such a thing may or may not exist — it depends on context and industry, of course — but hot cloud storage is making a play as one of the main foundations for technological progress and scaling when it comes to payments and commerce in 2020, and even beyond.

To get a better sense of what’s happening with hot cloud storage, PYMNTS recently caught up with David Friend, CEO of a company called Wasabi, which aims to offer hot cloud storage for one-fifth the price of Amazon Web Services (AWS), he said.

“It’s a disruptively simple, one-size-fits-all cloud storage technology,” he said.

The reason Wasabi can offer such prices, he told PYMNTS, is because the company “wrote our own file system, which other people don’t. It’s extremely hard to do.”

Even so, the world that Wasabi operates in is very competitive, and it’s dominated by players such as Amazon. Indeed, a writer for The Atlantic, Franklin Foer, recently penned a sprawling story about Amazon, speculating that CEO Jeff Bezos will spin off the highly profitable AWS before antitrust regulators get a chance to break it up.

CNBC ran an interview with Foer, who said breaking off the service “would be the obvious thing for [Bezos] to do in the face of this. I think that eventually Bezos, who is seeing around corners, is going to break up his own company. AWS exists as its own fantastically profitable business. There’s no reason that it needs to be connected to Amazon the eRetailer. And as he looks at what’s happening in politics, where there’s this increasing bipartisan consensus that Big Tech is a problem, I’m pretty sure he’s going to say, ‘OK, fine.’”

Payments and the Cloud

As that idea plays out, cloud computing and cloud storage are becoming more important in the payments space. FinTech firms are tapping into cloud computing as they harness benefits, such as scalability, reduced information technology (IT) costs, business continuity, and technology innovation and adoption.

Companies that are not on the cloud are internally hosting technology, which can be a slow and costly arrangement. With the traditional model, enterprises have to go through a procurement process, and then act as well as configure servers. Through the cloud, however, companies could simply subscribe to, say, Microsoft Azure’s latest offering and see how it works. They no longer need to pay for system upgrades, new hardware, expert IT staff, energy costs and specialized IT/data center space.

At Wasabi, retail and payments players are increasingly using the company’s hot cloud storage offerings, but mainly for backup and not ongoing core missions, Friend said.

“Payments is something that is very hot when it comes backup storage,” he said. “Most people keep a history of what’s been done,” and backup storage tends to be less expensive than buying cloud storage for core operations.

Those operations tend to require what Friend called “blinding fast speed,” and that, in turn, requires servers placed relatively near those core operations, which can also increase prices. The need for speed in payments will only increase in the new decade, and according to Friend and other experts, that desire will continue to push the trend of putting servers closer to essential operations when it comes to cloud storage.

Space Clouds

Even so, newer and smaller cloud storage service providers can use some tactics to gain an edge on larger places, at least according to how Friend told the story to PYMNTS. One such tactic basically boils down to offering one-size-fits-all pricing — that is, a single pricing tier — instead of the multiple and relatively complex pricing tiers offered by AWS and other larger cloud computing players.

“There is one number on our bill,” Friend said. “It’s simple to sign up. It’s like signing up for electricity.”

Cloud storage is also moving into and well above the clouds — another trend for the new decade. An example of that comes from Wasabi, which recently announced a partnership with Cloud Constellation’s SpaceBelt, which the company described as “an ambitious project underway to create a space-based, super-secure network for the communications and storage of data in orbit around the earth. It’s completely isolated from the terrestrial internet.”

Friend, in his PYMNTS interview, had no new details about that effort. But it’s safe to say hot cloud storage is really set to take off in the coming years — and payments providers will be along for the ride.