Greece's Problems Extend to the Cloud

Bloomberg View , July 02, 2015

Starting a technology company has become much cheaper and easier in recent years. Businesses can contract out functions, from cloud computing to e-mail list management, that once would have required in-house equipment and expertise. Amazon Web Services, for instance, boasts that more than “a million active customers in more than 190 countries” are using its hosting services instead of relying on their own servers.

Now some of those customers suddenly can’t pay their bills -- not because they don’t have the funds but because the Greek government won’t let their money leave the country. Just as individual Greeks are losing access to Apple’s iCloud, as the Athens staff of Bloomberg News recently discovered, so companies are finding themselves cut off from services critical to their ongoing operations.

The problem demonstrates a hidden risk in today’s otherwise efficient vertical disintegration. Taking for granted the easy flow of money across borders, system designers never foresaw a situation in which companies with adequate funds would find that they couldn’t pay foreign vendors.

“Greek companies are not able at this moment to pay for hosting (Amazon), storage (Dropbox), email services (MailChimp) and many other services,” says Jon Vlachogiannis, a Bay Area entrepreneur, in an email. Without these services, otherwise viable businesses are in trouble.

Vlachogiannis and fellow expat entrepreneur Panos Papadopouloshave teamed up to keep such Greek enterprises going in the most straightforward way possible: They’re paying their bills from California.

The money comes out of their own pockets, and those of other Silicon Valley contributors. The effort is a small but remarkable example of entrepreneurial solidarity, benefiting for-profit businesses without expecting a return. While most donors are Greek, venture capitalist Marc Andreessen tweeted that he’d contribute and has promoted the project to his 346,900 Twitter followers.

The amounts involved are astonishingly low.

The first 10 companies received only about €1,000, says Vlachogiannis. “The problem you see, is not that they don't have the money,” he says. “These are healthy businesses.” Just a little help can keep their doors open, and their workers employed, until they find a long-term solution.

The money is a gift, Vlachogiannis says, not a loan or investment. “If people want to repay us, all they have to do is to keep working :)”