What "Cloud Computing" Could Mean to Consumers

In November, we shared some thoughts about what the "cloud" could mean for consumer products and services. For a review, you can click on this link. Microsoft's recent Windows 7 commercials have helped to bring broader market awareness about what practical end-user applications can come as a result of cloud-based services.

To review, the consumer cloud products and services as we categorize them are:

E-mail/Calendaring/Family Sync: These are features such as Apple’s mobileme, Microsoft’s Live Mesh, and service provider-offered (Deutsche Telekom is a great example, with a service called Connected Live Experiences at Home) calendaring, messaging, and media (photo) synching across devices such as computers and smartphones. Technology providers in this space include NewBay Software and a past sponsor of CONNECTIONS™ - viacube.

Online Backup Migrating to Cloud Services: The first iteration of online backup was merely as a away to automate back-up of home computers (Carbonite, Mozy, etc.). Services such as SugarSync, SpiderOak, and ZumoDrive are taking online backup and making it a cloud service by making the content accessible (and sharable) from multiple types of IP-connected devices. Motorola just purchased Zecter, the company that developed ZumoDrive. This would indicate that online backup of the smartphone will be more of a focus for handset developers and wireless/mobile carriers.

Consumer Electronics-based Cloud Services: Right now, we see three ways that this is being implemented:

• Attached Storage/NAS Clouds: We’re seeing the major consumer storage companies (Buffalo, Data Robotics, Iomega, Seagate, Western Digital, etc.) implement remote access and interaction with files, media, and content that is stored on attached drives and network-attached storage devices. Again, the interaction can be done with any IP-connected device, including smartphones. At CES, Iomega was heavily promoting this at CES, with something they call the Iomega Personal Cloud).
• Appliance-based Clouds: If a consumer doesn’t have attached storage or network-attached storage, there are appliances from companies such as Cloud Engines (Pogoplug™), CTERA, and iTwin that turn any device with local storage capabilities into a cloud server. Again, the key is the ability to interact with and access your content from any IP-connected device.
• Smartphone Clouds: Trend Micro showed SafeSync, which is online backup and remote access to your iPhone or Android smartphone content. Carbonite and SugarSync also offer this.

When it comes to digital media, the current iterations of “cloud media” services are what we would term “one-way solutions.” The model today is to host and push content toward the consumer and not necessarily provide for the upload and storage of existing copies of all of your movies and music. Digital music services will probably be the first to move to true two-way clouds, likely starting with Apple, Amazon.com, and perhaps Google.

Music Services: There are few digital music services that are cloud-based today (meaning the consumer can move an iTunes library to a hosted storage service and access it anywhere). The rumor is that Apple will be unveiling something like this.

Video Services: UltraViolet (DECE) and Disney’s KeyChest get the major headlines in this space. They are proposing services where a consumer still buys the physical copy of a movie (Blu-ray), but with that will come a digital copy that is hosted and available on different types of consumer electronics devices. In the meantime, Verizon is already offering Flex View, which allows FiOS subscribers to order a movie (rental or purchase) from multiple types of devices and then access it from different platforms – smartphone, computer, television.

Gaming Services: Again, a very one-way cloud model, where companies such as OnLive have console-style games that can be played on multiple types of connected consumer electronics. At CES, they announced a partnership with VIZIO, where OnLive gaming services will be available on VIZIO’s connected TVs.

Last week, we were quoted in a SmartMoney magazine article about consumer-oriented cloud products and services. The article also made its way to The Wall Street Journal. We certainly see an early market for cloud media in online backup services (Carbonite, Mozy, SugarSync, etc.) extend their functionality to include access to stored content and media on multiple types of IP-connected devices. We also anticipate that appliance-based consumer storage products (attached drives, network-attached storage, etc.) will take on "cloud" attributes, allowing consumers to access and update files and content from any connected device. At the just-completed 2011 CES, news from the Digital Living Content Ecoystem (DECE) - the UltraViolet consumer brand - indicates that we're a step closer to seeing a VoD-based cloud service become consumer-ready.

One quote in the article that I'd like to clarify is one in which I am quoted as saying that "People storing data in the cloud might also save money on their actual gadgets, because they may be able to get by with a smaller hard drive and a less powerful processor."

Actually, what I told the reporter is the opposite of that. We anticipate that - for the foreseeable future - online data/backup services complement local storage such as computers and attached hard drives, because they provide redundancy and the flexibility of multi-platform access. We don’t see this diminishing the need for robust storage in the home over the next five years, but it could eventually bring forth the long-anticipated arrival of “thin client” computing, where devices don’t have to rely on large amounts of storage and processing. But it’s a long-term evolution.

Defining Consumer Cloud Products and Services

"Cloud" is such a buzz phrase today that it's easy to be overwhelmed by what's really happening on the consumer side. There are some very real developments today, and we are organizing our thoughts in a report titled Cloud Media and the Digital Locker. A press release today from Western Digital and a New York Times article describing offerings such as SugarSync got me thinking about how I'd organize the consumer-oriented cloud solutions. As to the requirements for a product or solution to fit in the "personal cloud" category, I'd say that there are several:

• For hardware, appliance, and online, and solutions, the ability to upload all desired content to remote storage (not just a single-purpose photo-sharing site, for example);
• Again for the hardware, appliance, and online applications, the ability to "push" - or share - only specific folders or files with friends or family);
• Remote and ubiquitous access to content from multiple IP-connected devices; and
• For premium content service cloud offerings, the ability to either offer multiple formats or work with hardware with the necessary transcoding capabilities to play in particular video on a wide number of devices.

Here's my best shot at categorizing the consumer cloud solutions:

• Hardware, Software, and Appliances: Products in this category are it network-attached storage appliances/media servers and applications developers that provide for remote access via smartphones and other IP-connected devices (companies such as Buffalo, Data Robotics, Iomega, QNAP, Seagate, and Western Digital. Also, appliances such as Pogoplug don't necessarily require a NAS drive, but allow all local drives and files to be accessed.
• Online Storage and Backup: The aforementioned SugarSync is a good example, and others include Box.net, DropBox, Egnyte, Humyo, Microsoft Live Mesh, SpiderOak, and ZumoDrive. Also, service providers are in the mix - Deutsche Telekom offers a service called Connected Life Experiences at Home. Companies such as NewBay Software and viacube are two to watch as white-label providers of synching and backup services.
• Cloud Music Services: There are many streaming music services from which to choose, but Cloud Music services will store your personally-owned content and have it ubiquitously accessible. Speculation was that Apple would launch this as a feature of iTunes following its purchase of Lala. Others in the mix are MOG All Access, Sony Qriocity, and Thumbplay.
• Online Video Transitions to the Cloud: Sony's Qriocity is a good example of this kind of service. RoxioNow is a technology to watch in this space.
• Video-on-Demand as a Cloud Service: Verizon FiOS Flex View is the first known intiative of which I'm aware, but we'll see other. Whether or not they adhere to the UltraViolet brand from the Digital Entertainment Content Ecosystem (DECE) or Disney KeyChest is another matter.

There is consumer demand for cloud media. From our Digital Media Evolution II survey, remote and mobile access to photos and music are among the top cloud features desired.

DECE unveils the UltraViolet consumer brand

The Digital Entertainment Content Ecosystem (DECE) consortium has announced its UltraViolet consumer brand. The goal of UltraViolet is to allow consumers to watch their digital entertainment across multiple platforms, such as connected TVs, PCs, game consoles, smartphones and tablet PCs, in an easy, consistent way. Since all UltraViolet offerings will work together, consumers will be able to select which products and devices they prefer from a spectrum of familiar companies – ranging from major studios to consumer electronics companies to cable, web and other service providers. In addition, the UltraViolet name and logo will help identify entertainment products and services designed to work together seamlessly.

In yesterday's Webcast on "TV Everywhere," I hypothesized that a "digital locker" solution such as UltraViolet (or perhaps something proprietary to the operator) would be a key in extending the concept of TV Everywhere from mere cable channel repllication to what I've termed "VoD 2.0," where operators create storefronts and are selling VoD downloads that can then be accessed on a variety of consumer electronics platforms. Eventually, I would expect that the concept of TV Everywhere then morphs into "Content Everywhere," where we see cloud-based solutions hosting a variety of content - from user-generated to professional (including games, e-books, music, etc.). But are the service providers on board with DECE? Although there are operators and service provider-related entities on DECE (CableLabs, Comcast, Cox, and Liberty Global), the comments I've read in news reports about the UltraViolet announcement are pretty noncommital about its use.

In a post that I wrote after our CONNECTIONS™ 2010 event, where we had Mitch Singer (CTO of Sony Pictures and president of DECE) speak, I had expressed some concern about whether DECE would get traction with the service provider community. We heard concerns from service providers during CONNECTIONS™ that DECE's goal of limiting the number of video formats available would limit their ability to compete on higher and higher quality content. If a service provider is going to spend billions of dollars to upgrade their network to fiber or DOCSIS 3.0, shouldn’t they have the option of providing a very high-quality format that cannot be easily replicated by an over-the-top provider?