Between 2008 and 2010 I wrote a series of posts on the eMonarch blog — the managed IT company I ran before founding NSN Management — arguing that small businesses would stop buying servers and start renting computing the way they buy electricity. This is that argument, with the scorecard filled in from 2026.
What I said in 2008
In October 2008 Larry Ellison stood up at Oracle OpenWorld and called cloud computing “complete gibberish… When is this idiocy going to stop?” Half the trade press agreed with him. I didn’t. My definition then: cloud computing is when businesses stop spending large sums buying file servers, application servers, and database servers, and instead subscribe to those services over the internet. Nicholas Carr had just published The Big Switch, comparing it to the moment factories stopped generating their own power and plugged into the grid, and I thought he was right.
A few months earlier I had asked a room of Tulsa engineers a question I still like: when was the last time you called the electric company to discuss how many watts your house needed? Never — yet we all knew how much RAM was in our PCs. I imagined a small business ordering computing the way you order phone lines: “I have five employees — two in sales, one in accounting, one in marketing, one in production” — and having everything provisioned in an hour without anyone asking about memory.
Then in June 2009 my own company signed its first hosted-infrastructure client — email, Office, CRM, files, all running in our data center and delivered over a remote session, no server in their office. I had written the vision document for that ten years earlier, sitting in my living room with a pile of HP servers and my little brother. The market wasn’t ready in 1999. It was in 2009. As I put it then: “nice to know I was not crazy, just a little early.”
And when a well-known analyst predicted a coming “cloud catastrophe” for 2010 that would scare CIOs back to their server rooms, I called it what it was: FUD. T-Mobile had already lost Sidekick users’ data that year; Google had two well-publicized outages; and the City of Los Angeles still moved 30,000 mailboxes to Google that December. My line was: “FUD will only keep us around long enough to go bankrupt.”
The scorecard
| 2008 claim | 2026 verdict |
|---|---|
| Small businesses will stop buying servers | Right. Most 10-to-100 person offices we walk into today have no email server, no file server, and often no server at all. Microsoft 365, hosted line-of-business apps, and cloud accounting did what hosted terminal sessions were trying to do — just more directly. |
| You’ll “order computing” like a utility, by role, without knowing the specs | Mostly right. Onboarding a new hire today is licenses, a laptop from a standard image, and group memberships. Nobody asks about RAM. What I missed: the hard part moved from provisioning to identity and permissions — who can reach what. |
| The delivery model would be a hosted desktop from your IT provider’s data center | Wrong on the how. Software-as-a-service won; the provider-owned data center didn’t. Businesses buy Microsoft 365 and their industry apps directly, and the IT company’s job became managing and securing all of it rather than hosting it. |
| “What will we manage when there is nothing left to manage?” | Answered. Identity, security, backup of cloud data (Microsoft does not back up your mailbox for you), devices, vendors, and planning. Managed IT did not shrink; it changed shape. |
| An outage or breach would not stop adoption | Right. There have been plenty of both. Adoption never slowed. The scary stories were FUD then and they are FUD now. |
| Some owners want to “hug the server” and will not be talked out of it | Right — but the server changed. The instinct is now “I want to know where my data is and who can see it,” which is a good question rather than a bad one. See below. |
What I underestimated
- Security became the whole job. When everything is reachable from anywhere, so is everything. Multi-factor authentication, endpoint detection, conditional access, and backup of the cloud data itself are now the core of managed IT for a small business — not a bolt-on.
- The bill. The utility model is real, and so is the utility bill. Subscriptions sprawl; licenses outlive employees; “just add another SaaS” is how a 25-person firm ends up with 40 recurring charges. Cost control is a real service now, which is why our planning reviews go through it line by line.
- The internet connection is the server now. I wrote in 2008 that connectivity would be a stumbling block. It still is the single point of failure for a cloud-first office — which is why we push for a backup circuit far more often than a backup server.
- The “hug the server” people had a point. Where the data lives, who can access it, what happens if the vendor has a bad day — those are legitimate questions, and the answer is “here is the tenant, here are the permissions, here is the backup, here is the plan,” not “trust the cloud.”
Why this matters if you are deciding today
The same pattern is repeating right now with AI. Somebody senior calls it gibberish; somebody else predicts catastrophe; most of the useful work happens quietly in between. The right response is the one that was right in 2008: ignore the FUD, ignore the hype, and ask what the tool does for a business your size — then put the guardrails around it before you turn it on. That is the thinking behind our AI & Copilot readiness service, and it is exactly what I would have told a client about hosted email in 2009.
If you still have a server in a closet and are not sure whether it should be your last one, or you are all-in on the cloud and not sure who is backing it up, this is what we do — and a Discovery Call is the place to start.
Questions Tulsa businesses ask about this
Does a small business still need a server in 2026?
Most 10-to-100 person businesses do not. Email, files, accounting, and most line-of-business software run as cloud services; the exceptions are specific applications that still require a local server, some manufacturing and engineering workloads, and offices with unreliable internet. A cloud-readiness review settles it for your case.
Who backs up data that lives in Microsoft 365?
You do — or your IT provider does on your behalf. Microsoft keeps the service running but does not provide long-term, restorable backup of your mailboxes and files against deletion, ransomware, or a departed employee’s cleanup. Third-party Microsoft 365 backup is a standard part of a managed IT plan.
Is the cloud secure enough for a small business?
The platforms are; the accounts are the risk. Almost every cloud incident at a small business is a compromised login, so multi-factor authentication, conditional access, endpoint protection, and monitoring are what make cloud safe — and they are the core of managed IT today.
What did the cloud change about managed IT services?
The work moved from hosting and hardware to identity, security, backup of cloud data, device management, vendor management, and subscription cost control — plus planning. Managed IT did not shrink; it changed shape.
How does the 2008 cloud debate relate to AI today?
Same pattern: some call it hype, some predict catastrophe, and the useful work happens in between. The right response is to ask what the tool does for a business your size and put guardrails — permissions, backup, a one-page policy — around it before switching it on.