Steve Jobs once said that Dropbox– the cloud storage service– is a feature, not a business. Yet Apple’s competitors are rushing toward the cloud with reckless abandon, while Apple moves in another direction, tacking on cloud-like functions to Mac, iPhone, and iPad, all of which enhance the ecosystem but don’t pay the freight.
Is Apple on to something by not following the crowd into the cloud? Or, is Apple about to be overshadowed and trumped by cloud-based competitors?
It’s not as if Apple does not have the technical chops to create, sustain, and grow a real cloud-based service business (despite using Microsoft’s Azure cloud service for a chunk of the company’s cloud efforts). After all, can you name another company that has more customers who use their cloud services than those who use Apple’s iCloud? Even Apple’s cloud-based iWorks trio– Pages, Numbers, Keynote– get high marks for usability and compatibility.
In the cloud space, this epic battle has a number of notable and competing interests.
There’s Google, a company which makes a hefty living by using the cloud to cull, gather, store, and distribute your personal information. Google loves the cloud as much as Amazon loves the cloud.
There’s Microsoft which is in transition from a software company to a cloud services company, hence Office 365, a monthly or annual subscription service to use Office anywhere, on any device– even while the company gives Windows away for free to manufacturers who sell very inexpensive devices that compete with Chromebooks and Android devices.
Finally, there’s Apple, which makes money the old fashioned way, by building a product and selling it, and where cloud services are just that– a service used as a feature, not a real business.
Google is proof positive that cloud-based technology can make tremendous profits for some, but not all. Beyond Google, though, what other companies, besides those who sell the hardware and bandwidth and software necessary to make cloud services work, actually makes the kind of money that Google makes? What other hardware company makes the kind of money that Apple makes?
My view of the so-called cloud is simple. Different strokes for different folks. Criticisms of Apple for not embracing cloud services the way Amazon, Google, or Microsoft use the cloud are not any more valid that Amazon, Google, and Microsoft’s successes at making hardware.
Cloud services work well for Google, though the company’s attempts to diversify beyond advertising have met mostly with failure. Adobe made a successful move to subscription services, though the application suite has not translated to the cloud. Microsoft’s attempts to diversify away from Windows and Office have mostly failed, and the company has little presence in the mobile device segment of personal computing.
Apple uses cloud technology as a set of features, and as a backend for customer facing products (iTunes, iCloud, Apple TV, come to mind), but not as a product or business. That doesn’t work for Apple any more than selling mobile device hardware has worked for Google, Amazon, or Microsoft.