In the last ten days, Amazon has launched Amazon Glacier, an extension to its Cloud offering which offers 1 gigabyte of data storage for a month for as less as one rupee. And Microsoft has launched its SkyDrive for Android, a mobile platform it is competing against everywhere. Why all the action in and around cloud hosting?

Digital Storage in olden days

In the good old days, we had floppies, the CDs, then re-writable CDs, then DVDs, not to mention the pen drives for file storage. All was going well, when somebody suddenly woke up and said:

1) Gosh, what if there was a natural or a man-made disaster? Won’t I lose all my data?

2) Can’t somebody steal my data if they are in a moveable storage device?

From Drum Memories to Flash Memory pen drives (see infographic below for complete history of memory devices) these were the only two questions bothering the end consumer.

 

digital storage history infographic

 

A few years down the line, thanks to a human being’s ability to stress himself out, came the problem of mobility & abundance. Earlier, people were struggling to buy one desktop for home, now they had a laptop, a tablet and a smartphone as well….which meant one could be using more than one device. This gave raise to one more question:

3) OMG, what if I needed that specific file but I wasn’t carrying it with me?

That’s when the need for the storage to be universally accessible cropped up. Multiple devices meant an extension of universal accessibility – now besides being accessible, they also needed to be synced with each other. And Auto sync between the devices & the cloud in today’s form was born.

Mind you here I am talking about end users and not corporates, which have various other reasons as well for using cloud storage.

When Skydrive was launched in 2007, I remember laughing at it.

My reasons for doubting the business of cloud storage in 2007

1) As an individual, during a natural disaster I am more worried about myself and my family than my data

2) As an individual, loss of all of the data that I have is manageable. It will be a problem, but I won’t lose my life (unlike in the case of a corporate/business).

3) The concept of all-device accessibility hadn’t yet dawned on me or the others because there were no smartphones & tablets yet

4) Besides, cloud storage was a new concept – like insurance and Cord Blood Banking. And new concepts require a lot of convincing & selling before they succeed.

The status of cloud storage in 2011/2012:

– In 2011, $830 million was spent on such file and back-up storage services. And in 2012 its expected to be $1.2 billion

– According to a May 2012 data, Apple’s iCloud garnered 125 Million subscribers within 6 months of launch

– Google Drive launched in February 2012 already has around 20 million users

– Dropbox has more than 50 million members who save one billion files every few days

– There are at least 50 cloud storage apps in iOS App Store and Android Marketplace each.

Now I am being forced to eat my own words – but not before I try and deliver my verdict on who will succeed.

My revised thoughts on cloud storage:

cloud storageFor long large organizations such as Netflix & Zynga etc have been relying on Cloud storage to manage and run their business. End users (or individuals) have also been getting proactive towards cloud storage in the last 2 years.

The cloud storage services these individuals (or mid-sized organizations) use could vary from among a huge list which would include players such as – Amazon S3, Google Drive, iCloud, Microsoft SkyDrive, Dropbox, Box.Net, JustCloud etc.

Now if you notice, there are two kinds/types of names in the list above. Lets break them up and see if you can spot a difference:

Type 1: Amazon S3, Google Drive, iCloud, Microsoft SkyDrive
Type 2: DropBox, Box.Net, JustCloud

OK, here goes. Type 1 is the type of company that’s into Cloud Storage NOT for making money but to safe guard/further its core business. While for Type2, cloud storage is their core business.

The Type 1 companies can undercut, majorly discount their pricing to win this war whereas DropBox, Box.Net or JustCloud can’t. Type 1 companies already have a ready base of users to tap from – iCloud can be sold to 250 Million iPhone owners or numerous Mac owners while Microsoft’s SkyDrive can be pitched to all Windows PC users.

What also helps Type1 companies to shut out Type2 companies from the competition is the fact that in the case of Type1, the user doesn’t have the need to individually identify the items he wants in cloud storage – he can do a mass selection once and be done with it.

It would also be useless to argue that Type1 companies are restricting themselves to a particular OS/platform while Type2 companies such as Box.net and Dropbox are platform agnostic….because, all Type1 companies have realized that now and making amends. Try searching for SkyDrive in Android Marketplace, iOS App Store – and you shall see the proof.

To sum up, an exciting space to watch. Some heads and companies will tumble – the question is when.