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People still tell me with a straight face that the Cloud is decentralized too.

I'm mature enough not to smack them, but not mature enough that I don't fantasize about it.

I really want to ask them how they think 'The Cloud' works to figure out how on earth they think it's decentralized in any way, shape, or form.

Unless they think having Cloud services being offered by a couple of giant companies rather than one is considered "decentralized".

They're probably conflating geographical decentralization with your idea.

Which is why I often try to walk them back to "let's run one server room and let Cloud providers run one in NY/Europe"

If you let your Ops people go then you lose a lot of competencies.