How Personal Clouds Come To Dominate Cloud World

What we call Cloud World is today a growing assortment of clouds of varying types – public clouds, enterprise and other business clouds, as well as personal clouds. Over time we believe Cloud World will come to be permeated by the existence of Personal Clouds.

We anticipate that Personal Clouds will be associated overwhelmingly with mobile devices. So the user is attached to a cloud – not necessarily his only cloud – through owning a device.

Personal clouds developed initially not because of the device makers and not because of mobile. Rather there were independent providers, primarily startup or emerging companies that initially offered cloud storage and, later, syncing, collaboration or other features. These businesses, such as Dropbox, started in a non-mobile environment.

However, the rise of the Personal Cloud today is overwhelmingly a mobile cloud phenomenon, driven by:

  • Proliferation of smart mobile devices, and
  • Introduction of clouds integrated with mobile devices.

The personal cloud in the device is virtually given to the user free by the device manufacturers regardless of the user liking or not liking it.

The device-based cloud allows the device maker to establish a very close ongoing relationship with the device owner enabling the owner to have updates and product enhancements including bug corrections, along with numerous cloud features, at minimal cost. This is a far closer relationship to the user than even that of the app store.

Growth in the number of personal clouds has been explosive, since introduction of the iCloud. As one point of comparison, Dropbox achieved 100 million users in the space of nearly two years; Apple achieved about 300 million iCloud users in about one-and-a-half years.

Dropbox iCloud
Date Users (Mil.) Date Users (Mil.)
11-Nov 100 3/13 300
11-May  50 10/12 190
10-Apr  25 1/12 150
9-Jan    4 10/11  20

Because of the diversity of device ownership situations and individual needs, there will still be opportunity for the independent cloud providers, and the number of providers has been growing. Cloud storage is still a relatively young area and providers will be trying a number of strategies. Dropbox, for example, has been working directly with device makers, such as HTC and Samsung. For example, the Samsung Galaxy s3 comes with 50GB free storage on Dropbox (a capability that is disabled by Verizon and AT&T.) Providers can also be expected to expand their product portfolios, one example being Dropbox’s acquisition of iPhone email app provider Mailbox (Orchestra, Inc.)

Other providers, such as Funambol, work with both carriers and device makers. There is potential for a battle between the device providers and the carriers, who would love to co-opt the personal cloud space. Carriers have twin motivations – Fear and Opportunity: a) fear of losing account control to the device providers, and b) the opportunity, which some are seeking to explore, to create “two-sided revenue models” with apps developers as partners; success of these models will be heavily influenced by who the users look to for personal cloud service.

The vibrancy of the personal cloud area is also being demonstrated by providers who specifically offer “non-storage” clouds, such as Polkast and Younity (Entangled Media.) Polkast, for example, utilizes the user’s computer as a server and provides a client that is downloaded to that computer (the Home Base) as well as one for the user’s other devices (the Roam Base). The files remain stored in the user’s home base equipment, but can be accessed remotely from the other devices. Files can be modified on the mobile device and automatically saved on the home base. Polkast provides access via what amounts to a VPN (virtual private network.) Its system can sense where the user is and provide a link over the best transmission option, WiFi. or Internet connection. The transmissions are encrypted with SSL (secure socket layer) encryption.

The feature set for the device based personal cloud will see not only an expansion in terms of product extensions for the existing set of services but also some new ones:

  • Voice response and enablement: Apple; Google Android 4.2+; AT&T Dr. Watson. While Siri was introduced with the 4GS, it still has several basic service hiccups; these will not only be resolved but Siri will be able to access a much wider range of on device and cloud services.
  • The beginning of non-device centric personal cloud platforms; a near future in which the device becomes virtualized and with an ever increasing capability of the WiFi/RAN infrastructure, the device becomes a powerful front end to a vast cloud computing resource: AWS’s elastic cloud is for the individual.

While all of the above will continue expanding, the biggest game changer may come from yet another set of developments. While the product extensions will continue and headline catching product announcements are to be expected, what has not been generally anticipated is the following behavior, which stems from a well-established pattern of adjacent category market leaders.

Google and Apple clearly have competitive overlaps in their product categories. This does not stop their having a strong multibillion dollar revenue share for Apple device originated search – or, in the case of FaceBook and Twitter to have their product actively promoted, when, e.g., an iPhone, is purchased,

There are a number of services which will focus this potential very visibly by 2014.

Google, Apple and now Facebook all offer a version of the public carriers’ SMS service, without a charge and without using the carriers’ networks.

Up to now the service has been available only to the respective Apple, Facebook, Google+ accounts; by 2014 these will probably number in excess of 800 million. It is not a major technical issue for there to be an inter-messaging agreement between these three entities – after all the telecoms world is always doing this. The ability to expand this simple inter-session model to other services, such as video conferencing and VoIP is very simple .

This expectation would result in a very potent over the top threat to the existing industry.

Another important aspect will be the growth of multiple personal clouds for individuals. These will naturally arise because of the need to accommodate different facets of a user’s life and personality, e.g., business and personal. They will also arise because of increasing opportunities to join affinity group clouds, for example, the cloud set up by a church or other religious group.

In addition, since we anticipate a dramatic increase in multiple device users (a survey by Ericsson stated that there were 2 billion multiple mobile device users in the world as of 2012), each of these devices in the future will likely come with a cloud embedded.