The Truth About Active vs. Latent Assets
The Difference the Cloud Industry Doesn’t Want You to Know
The cloud sold you a dream: limitless, no need for expensive hardware, and pay-as-you-go flexibility. It sounded perfect—until the bill started piling up. What the cloud providers don’t tell you is this: if you’re not smart about what you store, the dream turns into a cash-burning nightmare.
For active assets—the stuff your business runs on daily—the cloud works great! But for latent assets, the data sitting there gathering dust, you’re throwing money into a hole. And now, companies are starting to realize that. They’re pulling their data out of the cloud and shifting back to on-premises solutions, where owning beats renting when it comes to long-term storage.
The Truth About Active vs. Latent Assets
Here’s the real deal: not all data is worth paying for every month.
- Active assets are the lifeblood of your business. Think of the storage your team accesses every day, the media files you use in production, the databases, and all the other data you’re constantly working with. You need these assets on demand, and the cloud’s pay-as-you-go model fits perfectly for them—you pay for what you use, and it directly contributes to your bottom line. Because active assets actively create revenue.
- Latent assets, on the other hand, are the things or treasures you’re keeping “just in case.” Archived media files, customer records, metadata, embeddings, years of backups—all this data is sitting there, not generating any immediate revenue. They just have a latent value because maybe they will one day of use. But here’s the catch: the cloud doesn’t care if you’re using it or not, they’ll keep charging you for every byte.
Look Around Your Office
Think about your day-to-day. Your laptop is a perfect example of an active asset. You use it to send emails, manage projects, close deals—it’s essential, so investing in it makes sense. It’s a tool you rely on daily to keep your business running. Active assets create additional value every day.
Now, look at that scanner collecting dust in the corner of your office. You haven’t touched it in months, but you’re still keeping it around, just in case you might need to scan a contract or important document once in a blue moon. That’s a latent asset. It has potential future value but at the moment it doesn’t create any. You’re not using it regularly, but you’re still paying for the space it takes up. They’re not contributing to your business right now, but they’re sitting in the cloud, quietly racking up storage fees every single month.
The Ever Growing Cost Trap of Latent Assets—Arithmetic Series
At first, cloud storage seems like a no-brainer: you only pay for what you need, right? But when it comes to latent assets, this is where the trap springs. Storing data you’re barely using still costs you, and the longer it sits there, the more you’ll pay. And even worse, they are constantly growing. Because you are producing!
Let’s break it down. Say you’re for example storing a Initial amount of terabytes (TB) of archived data in the cloud at $ Costs per TB per month. That’s Initial×Costs a month—simple math, almost nothing, right?
But now, imagine your data grows by some Additional TB a month!Imagine the craziness you would do if you would rent one room of additionally office space every month—just to store documents you might need one day!
Now the fun of arithmetic series kicks in! After a year, you’re would have paid actually: Paid=Costs×6×(2×Initial+11×Additional)
That’s just to store passive data you’re not even using for production! Data that might one day generate revenue, but doesn’t right now.Think about what else you could do with that kind of money. And it doesn’t stop—those costs keep climbing month after month.
Myth-Busting: More Data ≠ More Revenue
Cloud providers will tell you that storing more data means you’re unlocking more opportunities—more insights, more value. But when it comes to latent assets, that’s a flat-out myth.
- Latent data doesn’t make you money today: These old media, and backups aren’t driving your revenue right now. You’re holding onto them because they might be useful later, but in the meantime, they’re draining your budget.
- Data grows faster than revenue: Sure, your business is scaling, but so is your data. For every new product, production, every customer interaction—more data gets generated. Because if you are successful you create data! But while your revenue might grow steadily, your latent data and the cost to store it is therefore exploding.
The Economic Theory Behind Active and Latent Assets
Let’s view it from a theoretical standpoint: When deciding between OPEX (operational expenditure, as in cloud setups) and CAPEX (capital expenditure, as in on-prem setups) for financing latent assets conservation, businesses must weigh the probability of activation and potential future returns against the growing costs of storing these assets. In an OPEX model, costs can grow indefinitely as data accumulates, creating a financial burden if the assets are unlikely to be activated or generate significant revenue. Conversely, CAPEX fixes the cost upfront, providing cost control and hedging against infinite cost escalation. The economic decision hinges on balancing the expected value of the latent assets—calculated by their probability of activation and future returns—against the ongoing costs of storing them and especially the continuously rising risks (more below) regarding their exposure or loss. If the probability of activation is low, CAPEX is more efficient, while OPEX might work if the expected return is high and immediate.
Beyond the Cost: The Risk of Time
As much as we’ve criticized latent assets for their growing costs, they still hold potential value—perhaps even treasures! That’s why we keep them! The issue isn’t their worth but that they’re not generating immediate value. In fact, it’s smart to hold onto them because they may be crucial in the future.
These assets are valuable, but storing them is like keeping food in a pantry for future use—if you don’t account for future risks, you’re in trouble. Maybe the food spoils, or a power outage wipes out your freezer’s contents. The same risks apply to cloud storage. Services shut down, companies go bankrupt, and the data you thought was safe could vanish overnight. Companies like Google have a track record of discontinuing services without much notice. Now, imagine scrambling to migrate petabytes of data with just a few months’ warning.
That’s just the start—there’s also the intellectual property risk. You can never be sure if your archived data isn’t being quietly funneled into the provider’s own AI models, potentially benefiting your competitors. When you store your data in the cloud, you’re not just paying for storage—you’re gambling with the future of those assets. Future value demands that you also account for future risks.
And here’s the worst part—Murphy’s Law is time-dependent. Give something enough time to go wrong, and it will go wrong. Give a cloud provider enough time to get in trouble, and eventually they will shut down the service. Give a partner enough opportunities to misuse your data, and they will take advantage of them.
Since we’re talking about long-term storage, time itself becomes the major risk factor.
Time to Get Smart: Bring Back Control
So, what’s the solution? More and more businesses are starting to wake up and realize that for their latent assets (especially with a very low probability of activation), the cloud is bleeding them dry. They’re moving back to on-premises infrastructure for data that doesn’t need to be accessed every day. It’s simple: with CAPEX, you invest upfront in your own infrastructure. No more monthly payments just to store files you might never touch again.
Companies like Dropbox have already figured it out. They pulled their data off AWS and saved $75 million in two years. Basecamp did the math too—they found out they could save $7 million over five years by moving their data back in-house. They didn’t abandon the cloud entirely—they kept it for active workloads—but they stopped paying insane amounts to store data that wasn’t doing anything for them.
Why ObviousFuture Offers On-Prem CAPEX Solutions
At ObviousFuture, we recognize that the cloud’s pay-as-you-go model can quickly turn into a financial burden, especially when dealing with latent assets. Almost every AI company these days relies heavily on the cloud and offers everything through APIs, locking you into an endless cycle of escalating costs and increasing risks. But we do things differently!
Unlike most ML companies, we also offer on-prem CAPEX models. Our on-prem solutions are designed for businesses that need more control over their AI—without the spiraling costs and growing risks. This approach gives you the flexibility to manage your AI infrastructure in-house, reducing reliance on cloud providers and helping you retain full ownership of your data.
Our AI systems for example analyzes and creates search indexes from media files (=latent assets), making it very easy to search through vast libraries of videos, images, or documents. But unlike cloud-only providers, we give you the option to keep your AI models and indexes on-prem. This means you’re not forced to rely on third-party APIs for access to your data, nor do you have to deal with the constantly rising costs and risks of shutdown or misuse that come with them.
Because consider this: a shiny AI company may be acquired by a big player (to polish their stock value), only for the entire service to be silently canceled three years later—along with the API you fully depend on to access your archive of latent assets! These are avoidable risks when you deploy on-prem. At ObviousFuture, we help you keep control where it belongs—in your hands.
By offering an on-prem solution, you get to:
- Own your ML infrastructure: No more endless monthly fees. No risk of shutdown.
- Secure your data: Keep your intellectual property under your control, without risking it being funneled into other AI systems for external use.
- Reduce long-term costs: With a one-time CAPEX investment, you’ll know exactly what you’re paying for, and you pay it once. Especially when dealing with latent assets.
Whether it’s cloud or on-prem, ObviousFuture is committed to giving you the flexibility you need. For active workloads dealing with active assets, the cloud works great. But for your latent assets—the data sitting quietly waiting for future value—our on-prem AI indexing solutions ensure you’re not bleeding money while maintaining complete control over your resources.
It’s time to get smart about your data and see whether its an active or latent asset.
