In recent days, Google, Microsoft, and Apple have all announced new online storage offerings. Approximately 17 months after Amazon.com launched its own "Simple Storage Service, the widening race to stake claims in online storage heralds the impending emergence of a new platform, or paradigm, that has massive disruptive potential.
On August 7, Apple announced that user accounts on its .Mac service would now feature 10GB of storage, increased from 1GB. According to news reports, the increased storage level would not result in an increase in the yearly subscription rate ($99) for .Mac.
Two days later, on August 9, Google announced that folks with Google accounts could purchase additional online storage capacity over-and-above the free 2.82 GB allotted to Gmail and the free 1 GB allotted to Picasa Web Albums. For $20/year, one can purchase an additional 6 GB of storage (the minimum upgrade level) and there are three greater price/storage tiers up to an additional 250 GB of storage for $500/year. At present, the storage can only officially be used for Gmail and Picasa accounts, although one suspects that through the use of an extension such as Gmail Drive (not approved by Google), individuals could use that space to drag-and-drop any file for remote storage.
On that same day, Microsoft announced that Windows Live SkyDrive, an upgrade to Windows Live Folders, was publicly available. Still in beta, the service comes with 500MB of free online storage that folks can use, much as the Gmail Drive solution noted above, to drag-and-drop any file for remote storage. SkyDrive also allows for the posting of files to public directories that anyone can browse.
Given the decreasing cost of storage solutions and the revenue generated by online advertising, it is not surprising that free or inexpensive online storage options are beginning to enjoy accelerating growth in both variety and capacity. Coupled with the growing availability of wired and wireless broadband connectivity, it seems to be just a matter of time before the mainstream user transfers the majority of his or her storage from local/attached solutions to cloud-based solutions. Ultimately, only limited applications will required the type of performance that local/attached solutions can provide while cloud-based solutions will be less expensive, more accessible, and more reliable from a data backup standpoint.
Consider the implications of the following scenario. End-users are already beginning to discover the benefits of no cost, ad-supported, online services. The depth and breadth of those services will expand extremely quickly and it is likely that the majority of frequently-used applications will move online, perhaps with the exception of performance-intensive applications. As Google and other providers have already proven (and as we have blogged about here, here, here, and here), some of the local client-based applications used most frequently by consumers and enterprises, including electronic mail, word processing, and spreadsheets, can be quite compelling in an online-only form.
The expanding availability of high-bandwidth, low-latency connectivity will also make it possible for end-users to increasingly store their own personal files online, making them easily accessible from any connected client with that accessibility delivering tremendous value. Furthermore, it seems likely that if end-users are willing to accept a certain level of advertising (say, the interaction with one advertisement a day or listening to a brief audio advertisement before the beginning of a song), online hosts may be more than willing to offer free, unlimited multimedia files to end-users to draw them to such advertisements or to have greater access to their habits and preferences.
The logical progression of this scenario finds end-users completing an increasing amount of those computing jobs-to-be-done online, particularly those of a personal nature. Further, consider end-users accessing their music or video files from a personal computer at home, a mobile phone while walking, a car while driving, or an airplane while traveling. Next, consider end-users knowing that they can always access all of their content from any location, just so long as they have some connected, smart client device, from a mobile phone or personal computer to a vehicle or watch to a television or other appliance, within reach. The value of such accessibility, particularly if it is ad-supported, is clear and significant.
Upon the premise that a rapidly growing percentage of end-users are willing to accept advertisements and give up some personal information in return for free content and services, the long-dominant American model of personal computer-centricity and repeated hardware and software upgrade cycles now comes into question. With the exception of computing-intensive jobs, such as video game playing and high-performance computing, there is no reason why the vast majority of applications and vast majority of end-user content will not simply find its way online in the future.
Once end-user tasks shift from local applications and storage to online storage and online access to information and applications, the age-old emphasis on local computing resources will begin to fade. Rather than building or purchasing personal computers with significant hardware specifications and thick, expensive layers of local software, from the operating system to office suites, end-users will increasingly look for connected client devices with browsers capable of satisfying their particular jobs.
If the job is one of content creation, for example, the end-user will seek out a client with a large-display, keyboard and mouse, and a browser capable of delivering a compelling, hosted, word processing, spreadsheet, or presentation application. If the job is one of mobile content access, the end-user may select a small client device in the form of a mobile phone or media player with limited display and input capabilities, but long battery life, portability, and a browser capable of accessing and playing streaming multimedia through speakers or headphones.
If an end-user is simply looking for glanceable information, he or she may choose a small client in the form of a stylish, connected, watch with a wearable design, but minimal display capabilities and a limited browser capable of displaying only text-based information such as news and instant messages. Perhaps the end-user is driving to work and would like his or her messages read verbally as well as access to streaming audio, maps, and directions the browser built into the car would do the trick. During breakfast, a display on the side of a refrigerator, perhaps coupled with a limited browser and touchscreen, would deliver the morning news in a manner conducive to passive consumption, rightsized to the relevant job.
Prior to the delivery of applications or content, online hosts would identify the characteristics of the client device, the browser, and the connection and deliver an appropriately-formatted experience. If the client device and browser are full-featured and able to leverage a wired, low-latency, high-bandwidth broadband connection, the host would deliver a rich, pleasing, bandwidth-intensive experience. On the other hand, If the client device and browser are designed for mobility and online via a spotty, high-latency, relatively low-bandwidth connection, the host would adapt, greatly reducing the feature set delivered and ensuring that only the most essential bits and pieces of information found their way to the client device. Essentially, content and applications would be available in any location, at any time, and end-users would select the most appropriate client device and browser for their specific needs, tasks, and usage profile.
The implications for this scenario on the business of software, hardware, services, and content are significant and the potential for disruption is widespread. Will the network finally become the computer? Are the days of the personal computer and packaged software, as we know them today, numbered? How soon might this scenario play out? What are your thoughts?
