Can Apple win 'personal cloud' market?

Apple is late to the cloud party, but has the integration, interface and pricing (free) to disrupt the so-called personal cloud market.
Written by Larry Dignan, Contributor

Apple has launched its cloud volley with a triple threat connecting its Mac OS X, its iOS and iCloud, a music service, document sharing and a bridge to a hosted iTunes that is expected to "just work" automatically.

The iCloud effort will be run from Apple's three data centers, including one in Maiden, N.C. that cost $500 million to build. These cloud services will be free---except for iTunes Match, which will cost $24.99 a year.

In a nutshell, apps, music, photos and documents will be synchronized in what Apple CEO Steve Jobs noted was the post PC way of doing things. The PC served as a hub of digital content for a decade, but is now played out. Jobs said that the Mac and PC is just another device now.

If all this sounds vaguely familiar that's because this cloud vision has been laid out before---repeatedly. Google has its Docs, Music and sharing services. Microsoft has Docs covered when Office 365 launches later this month. Amazon also has multiple cloud efforts. Toss in Dropbox and a bevy of other services and Monday's keynote at its WWDC forum was really a big game of cloud catch-up.

It's easy to dismiss Apple's iCloud on topics like documents. The music service could be big. However, critics will quickly note that there's a lot of me-too in the iCloud. What Apple brings to the table is integration, ease of use and an established customer base. Apple appears to be late to the cloud game, but that's not really the case.

Forrester on Monday released a report on the so-called personal cloud market. The upshot is that personal clouds will generate $12 billion in revenue by 2016 ($6 billion direct). Apple isn't sweating that market too much---iCloud is free---but will be happy to sell you all the devices connected to its data centers.

According to Forrester, 28 percent of all online U.S. adults use a personal cloud service and 41 percent of them use these efforts at work. That leaves a lot of room for Apple to grab share.

The initial reaction from Forrester was that iCloud will win consumers over with free, utility and product experience. Analyst Charles Colvin may have a point, but I can't help but think that MobileMe and .Mac didn't turn out so well.

In other words, let's wait until the iCloud launches before the victory lap begins.

The reliability game

Perhaps the best move from Apple was the iCloud pricing. It's free. The other side effect from that pricing is that no one will scream if the service stumbles.

As noted before, the big wild-card with Apple's cloud foray is whether it can follow the outage playbook, which revolves around dashboards, transparency and dealing with customers in real-time. Some of those concerns go away when a service is free---you get what you pay for.

Of course, that fact doesn't mean that Apple can go down for days, but you'll be a little more tolerant of glitches for a freebie. Apple's iTunes Match service, which costs you $24.99 a year, however, may be a different story, but that price point won't kill anyone either.

With great pricing, Apple's iCloud effort puts reliability worrywarts on mute and ensures that it has a platform for the next generation of consumers.



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