To the Cloud... and beyond (part 1)

By Phil Cutajar - April 25, 2012 | Tickers: AAPL, MSFT | 0 Comments

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To the Cloud, and beyond…

These days everyone is talking and writing about the cloud as though it is a ubiquitous and globally accepted norm. Yet when I ask people to describe The Cloud the responses I get are very diverse, and quite often I just get blank expressions of confusion. In most cases people recall the common slogans, such as Microsoft’s “To the Cloud…” campaign from Windows 7 commercials, or in other cases people simply refer to one of several common cloud services, such as Apple’s (NASDAQ: AAPL) iCloud or SalesForce.com (NYSE:CRM)

A growing number of analysts and media outlets often equate the Cloud to some transformational force that is sweeping across the universe sucking up all the bits and bytes from our computers and electronic devices, and lifting them to a heavenly existence in computing nirvana. Indeed, it is almost impossible today to gaze upon the front page of a technical magazine or financial news section without mention of the Cloud revolution. The stock market headlines are buzzing with the latest Cloud movements, whether some new Cloud startup is about to take the industry and the stock market by storm, or some industry stalwart is acquiring, enabling, enhancing or extending into, within or on top of the Cloud.

Cloud is no longer just the domain of IT professionals in enterprise data centers, it is becoming so widely used that in a few more years it may become as common as the everyday household utilities, such as electricity or phone service. Yet, it still confounds so many, even those who generally think of themselves as being technically savvy. Why? Because unfortunately the Cloud has become another one of those commonly used (abused?) terms that has no real meaning today, it could mean just about anything.

Thanks to some major advances, the Cloud is starting to mature, but it still has a long way to go. In the meantime there are some key emerging trends, which are altering the way most of us will use and interact with Cloud offerings in the coming years. The first key area of differentiation is accessibility. Although some prefer to classify accessibility as public versus private, in most cases accessibility comes down to paid versus free. Another key area of differentiation is specialization and the depth of services within a given area of focus.

Public or free clouds, in the true sense, are not really viable because nobody likes giving anything away for free. All Cloud companies need to monetize their Cloud in some way, and so most free cloud offerings are just loss-leaders to paid subscription services, either to get more storage and/or richer features. Some use advertising revenue to pay for limited free storage/services, but most offer a subscription option to either make the advertisements go away, or to unlock more capabilities and/or storage.

Private clouds generally fall into two key groups; personal and enterprise. Personal, paid-for cloud services and large-scale enterprise class third-party cloud services are really what most analysts and media sources are referring to when they use the term Cloud. But private clouds are much more than that. There are a growing number of private clouds, which are often overlooked or perhaps just downplayed by the Cloud mavens. For simplicity, I will break the private Cloud segment down into five major categories;

1. Personal subscription cloud services
2. Personal private storage clouds
3. Private enterprise clouds
4. Enterprise platform clouds
5. Enterprise service clouds

In a series of blog updates I will dive deeper into each one of these five categories, starting right here with the first one on the list.

Personal subscription cloud services (#1) is a generalization of a vast number of personal Internet service offerings, including the litter of photo sharing services and personal online storage clouds. Photo sharing has been with us for about a decade, with Google’s (NASDAQ:GOOG) Picasa, Yahoo’s (NASDAQ:YHOO) Flickr, and the social networking giant; FaceBook, among many others. The next evolutionary cycle for these services will likely spawn various embedded integration capabilities with cameras, phones and mobile computing devices capable of exchanging media files automatically with your designated cloud service any time you are in the vicinity of a WiFi hotspot, and then streaming them to your WiFi enabled TV, digital photo frame, or stationary desktop computer.

Personal online storage services, sometimes called online backup, have had a fair share of ups and downs. The current crop consists of Amazon’s (NASDAQ:AMZN) Cloud Drive, DropBox.com, Box.com, Streamload.com, MyDocsOnline.com, and various others. Microsoft’s (NASDAQ: MSFT) Windows Live, together with its integrated SkyDrive file storage service, is a slight variation on the theme offering integration with various Microsoft Office products, and includes messaging and Hotmail email integration. Google Play and Google Docs are widely presumed to be short-lived predecessors to the highly anticipated big “G Drive” in the Google Cloud. I can’t confirm the G Drive rumors, but it doesn’t seem farfetched for the maker of all things G.

Apple's iCloud takes personal subscription cloud services a step further by integrating seamlessly with Apple’s proprietary hardware and their iTunes web store, allowing subscribers to share music, videos, apps, pictures, books and other files between Apple devices.  iCloud has received a very warm welcome from Apple gadget enthusiasts,  reporting in late January that 85 million of the estimated 315 million iOS device owners had registered for the Apple iCloud service.  With an annual subscription fee of $25, it may yet prove to be another healthy revenue stream for Apple, already the world’s largest company by market cap.

There is some speculation that Microsoft has been silently cooking up another cloud storage solution that will have native integration with Microsoft’s newest PC and Server operating system; Windows 8, which is due to be released in the second half of 2012. Rumors are that Microsoft may provide seamless Cloud file sharing among multiple Microsoft platforms, including Microsoft Office applications, Windows Phones and XBox 360. The new touch interface destined to grace Windows 8 will apparently have a lot in common with the Microsoft Phone OS, and the recently updated XBox 360 interface.

The world of personal cloud storage and services will continue to expand over the next several years, creating new cloud offerings with richer and deeper services, increased storage capacity and much more seamless and limitless accessibility across many consumer platforms.  The next most likely step in the evolution of personal cloud storage is direct integration into the operating systems and interfaces of the most common computing devices, including personal computers, tablets and smart phones. Some level of integration into smart WiFi enabled devices is also possible, although likely further off into the future.

This concludes the first installment of the series. Please feel free to comment and provide your feedback. 

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