iCloud looks to have a silver lining for Apple

Apple has dreams of dominating cloud computing - just as it did with the portable music player and smartphone. But will the plan work this time? Tony Glover writes.

Despite its potential to dominate cloud computing, there is a growing view that Apple's iCloud faces tougher competition. Justin Sullivan / Getty Images / AFP

The launch of iCloud, Apple's cloud computing service, and the development of its new US$1 billion server farm are evidence of the Silicon Valley electronics manufacturer's plan to dominate the next incarnation of the internet.

The information technology (IT) industry is rapidly moving towards cloud computing, hosting software in vast computer banks known as server farms rather than within devices such as PCs and smartphones.

According to the international research company Forrester, the personal cloud services market will reach $12bn (Dh44.07bn) and 196 million users by 2016.

Frank Gillett, a Forrester analyst, believes the combined offering of iCloud and other new software such as Mac OS X Lion, Apple's new operating system, have put Apple ahead of Microsoft and Google in cloud computing.

He rates Google as the number two player but believes the search giant will struggle to provide technology to match Apple's for ease of use. Mr Gillett says Microsoft's cloud strategy is unclear and Windows 8, its new operating system, is not due out until next year.

But there is a growing view in Silicon Valley that reports of iCloud's success may be premature.

"There is no guarantee Apple will be successful with iCloud," says the Ovum analyst Carter Lusher. "It is the successor to MobileMe, a service that was generally judged to be a failure.

"Another factor is the competition iCloud is facing from companies such as Google and Microsoft. Competition is only a click away."

There is also a general industry view that despite its potential success in the consumer market, only small businesses are in a position to benefit from the Apple iCloud.

"It is Ovum's view that iCloud is not architected to be a corporate IT tool," says Mr Lusher. "This is in contrast to cloud services such as Microsoft Azure and Amazon Web Services that were developed for business."

But he says Apple's ability to cater to the personal market could give it a backdoor entrance into the corporate world.

"The 'consumerisation of IT', ie, employees wanting to use devices and apps originally developed for the consumer market to do their jobs, is a major trend," says Mr Lusher.

"If iCloud is successful and has millions of users, enterprise and public sector executives and employees across the world will learn about the cloud as consumers first."

Moving its IT services on to the cloud would help Apple achieve its long-term ambition of tying users into its own services and apps, rather than encouraging them to surf the internet for their requirements.

"The goal would be to encourage customers to use only services supplied by Apple and its partners," Mr Lusher says. "While users could not be prevented from surfing the net, the objective would be to provide such a convenient, easy-to-use and full-featured experience that customers would habitually stay inside the ecosystem of the platform."

By encouraging other companies to provide services via the iCloud, Apple hopes to provide users with digital daily newspapers, networking with friends, a vast choice of entertainment and a host of other services without them ever having to go outside the Apple iCloud.

"Apple's approach will not preclude third-party applications that exploit the capabilities of iCloud," Mr Lusher says.

"Many users would not miss the flexibility offered by the open internet market of services and apps, if they can access their favourite social networking services, e-mail, gaming and music and video services. Many are already happy with the applications that come bundled with Apple iPhone operating system devices and the roughly 400,000 Apple-approved apps now available."

But Apple may not have things its own way. Corporations are increasingly reliant on the internet for much of their revenue and may not wish to hand control of their customers over to Apple.

"Partners such as Facebook are reluctant to give up their member data to Apple, which is why Facebook does not work very well on Apple devices at the moment," Mr Lusher says.

He adds that publishers are also reluctant to hand 30 per cent of their subscription fees and their subscriber data to Apple.

The same can also be said of many other large industries, which are unlikely to wish to hand the reins of their online businesses to Apple.

Internet users across the world are also becoming increasingly wary of Apple's plans to control access to the internet.

If users choose to select one supplier, such as Apple, for all their online needs, that supplier will be able to store vast quantities of information on each customer, raising monopoly issues as well as the question of user privacy.

But Apple is a determined organisation that already has a head start in the next phase of the internet with its iCloud strategy.

If it can duplicate its success in the smartphone market following the introduction of the iPhone in 2007, it may be able to lure enough customers and business partners into iCloud to maintain its market lead.

Apple was unavailable for comment.