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Measuring Not Getting the Cloud

This is what “Not getting the Cloud” looks like:

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“Not getting the cloud” means that in the last 12 months Apple obtained:

  • 800 million iTunes users and
  • an estimated 450 million iCloud users spending
  • $3 billion/yr for end-user services plus
  • $4.7 billion/yr for licensing and other income which includes
  • more than $1 billion/yr paid by Google for traffic through Apple devices and
  • $13 billion/yr in app transactions of which
  • $9 billion/yr was paid to developers and
  • $3.9 billion/yr was retained as operating budget and profit for the App Store. In addition,
  • $2.7 billion/yr in music download sales and
  • more than $1 billion/yr in Apple TV (aka Apple’s Kindle) and video sales and
  • $1 billion/yr in eBooks sold

In summary, iTunes, Software and Services has been growing between 30% and 40% for four years and is on its way to $30 billion/yr in transactions and sales for 2014.

This is what can be deduced from a reading of Apple’s financial statements of operations. If there are comparable details for companies which do get the cloud, I’ll be happy to tally the comparison so we can calibrate this failure.

  • Walt French

    But of course “not getting the cloud” was never about revenues from services that are a small part of your hardware business.

    VCs, startup CEOs and others who don’t have Apple’s enviable hardware and software successes, and whose business plans collectively depend on global advertising spending quintupling and then going 100% to the internet, need to “talk their book” to attract investors; otherwise the Exit is an ignominious failure.

    It’s no coincidence that the two mega-corps Mr Wilson sees continuing are both 100% dependent on advertising because frankly, hardware startups like Nest or established, experience-, brand- and IP-rich shops like Motorola, haven’t found the secret to focused and yet widely-used devices. In the catalog of next year’s multi-billion IPOs we shouldn’t expect many hardware companies. Same goes for software that users install.

    If there’s to be a major revenue stream from anything other than drawing eyeballs into cozy little portals where people can chat and play games, it’ll have to come from some new leap by the OS makers, better integrating apps’ functionality. Apple has taken mostly inconsequential baby steps this way; Microsoft tried harder but doesn’t have the resources of enough users and developers to create a software web on their non-work platforms; and Google merely fleshes out more ways to extend its maps, docs etc into 3rd party apps who don’t have the critical mass to handle the inter-app complexity.

    So, “services,” permanently connected toGoogle’s, Facebook’s or some in red

  • http://www.isophist.com/ Emilio Orione

    Perhaps Apple is the only one “getting the cloud” since it is the best at monetizing it.

  • stefnagel

    My mentor in publishing, John Huenefeld, used to say the point to publishing was a product so good that someone would put down a hard earned buck to read it. Clearly Apple does a good enough job at products that do a good enough job.

    • SLNH

      “product so good ” like Snooki’s book?

      • stefnagel

        I suppose. If that’s your idea of good.

      • SLNH

        No.since it was published was that your senator’s idea of good?

  • John

    I saw you saying on Twitter how it is frustrating that people say things like Google is “better” at the cloud than Apple but there is no way to quantify this.

    Just sticking with Google services, I think it is possible at least to talk about the things that one can do with other cloud services where Apple doesn’t even have a product offering. It is also important to be clear-eyed about the actual functionality of the different products–where you said on Twitter that there are Apple “alternatives” to various other cloud services, I simply think you are wrong. I switched fairly recently from not using any Google products besides search to becoming very invested in the Google product lineup. I can simply get more done in ways that are not tied to devices by relying almost exclusively on Google for cloud services. Where Apple falls short is not in check-box features but in fundamental ways.

    Photos. Google has solved this problem. 100% of my photos and home videos are stored on Google+ in full resolution. Right after I take a picture it is synced. I can clear my local camera roll any time and don’t need to worry about backup or syncing to a desktop. Google+ then offers myriad sharing and editing features and of course the ability to download a .zip export of every photo on the service. And you can search your photos using image recognition (“baby,” “trees” etc) or by location. As far as just photos go, Google+ is among the best services. This is much better than the Photostream approach where sharing is limited to having pictures appear on shared photostream subscriber’s iOS devices (and take up space) or the very poor web interface. And Photostream is by no means a backup service (that is you can’t delete photos from your camera roll and be sure you’ll still have them in the future–it’s just a combined list of recent photos that may vanish at any time).

    Drive. I have 100 GB of space in Google Drive for $2 per month. I keep *all* of my non-media files on it, including a full research library of PDFs. Plus it integrates with Docs and other Google services. Dropbox still performs better with local folder sync but Drive is still very, very good, and cheap. Of course Apple has nothing apart from the document silo of iCloud. How am I supposed to use iCloud to keep a decade+ of documents in many different formats in sync between computers and devices?

    Music. Google Play Music + All Access is a combination music locker and streaming service. Its only technical shortcoming (there are always catalog issues) is that it is limited to 20k uploads (Match has 25k, Amazon has 200k). I can create and edit playlists on the fly, store music locally on the device for offline access, etc. iTunes offers none of this.

    Books. I can upload a PDF or epub to Google Play Books and it is available immediately to all my devices. Apple only makes iBookstore purchases available from the cloud; everything else requires a direct sync of a file from a computer or to import a file into the app in iOS (through Drive, for instance).

    Platform independence. This should be obvious but Apple services require you to use Apple devices. Google services allow you to switch between PCs, Macs, iOS, and Android. When my iPhone broke I replaced it with an Android phone (who wants to get a new iOS device at this time in the product cycle) and while Android has its pros and cons, since I rely on non-Apple cloud services my iPad and the Android phone stay perfectly in sync.

    Google Docs works for collaboration very well, both within my organization and with outsiders. iWork does not. I can’t imagine how poorly it would go down if I tried to get people to use iWork, even if I just directed them to the web version. Document collaboration is still primarily emailed Office documents first, with Google Docs/Sheets/Forms/etc number two with a bullet.

    Email. Gmail and its native apps support features like muting that I find indispensable. And Google allows you to use as many custom addresses (non-Gmail) as you like, without needing an apps account. So I can use Gmail but still maintain a service-independent email address. iCloud only allows you to use an iCloud address.

    Apple has nothing at all like Google Now, apart from the meager information in the notification tray. Google Now tracks my packages, tells me about my upcoming flights, weather in my destinations, etc. The integration between Google Maps, Now, and Gmail provides many benefits of this kind. You let Google scan your life and it tries to act as a personal valet.

    Web synchronization. I use Chrome on iOS and the Mac because I like that *everything* syncs. Not only do you have the “tabs on other devices” feature that some Apple fans think is unique to Safari, and bookmark syncing. But my complete web history and search history syncs, which makes auto-complete very nice, and in turn helps Google Now surface useful information.

    Hangouts. Not perfect but much better than iMessage/Facetime. Cross-platform with an excellent web app. SMS integration as Apple does it is bad and leads to the issue where messages go missing when people change phones. Hangouts does none of this.

    Google Voice. I use this as a unified voicemail box for work, home, and mobile.

    Maps: Not perfect but a combination of Skobbler apps (for full offline access) and Google Maps for accuracy and transit maps is still much better than Apple Maps.

    • stefnagel

      A worthy effort. Seriously. But the writer’s point concerns an almost abusive misconception about Apple’s cloud presence. My family uses all the cloud services associated with iTunes, iWork, FaceTime, Messages, Aperture. They are seamless, simple, and useful. Not perfect. But nothing is.

      • john

        Yes, but this isn’t about iOS vs. Android. It’s about how good Apple is at cloud services, and if the best solution for iOS users is to use third-party services, then Apple needs to step up its game. I use iOS primarily, but Apple cloud services very rarely, apart from the app store.

      • stefnagel

        In the same vein, if Google has to rely on third party hardware, it’s casting pearls before swine. Or actually before a whole barnyard of animal types. Which is why Google embraces iOS, cus as Willie Sutton said, that’s where the money is.

      • typical

        This also isn’t about one point of anecdotal data. Do you think you’re typical?

    • berult

      The siren songs of blissful abandon enraptures innocence into ‘powerpointing’ caveats to despair.
      berult.

  • Matthew S

    been following you for years and believe today was the first time I laughed out loud……thank you for another great post, and especially that last paragraph

  • normm

    I would actually agree that Apple has a lot of room for improvement on syncing and storage in the cloud, but it obviously has a lot of success in general, and its hardware benefits from third party cloud solutions such as Dropbox and Pandora.

    One thing I would say, though, to people who think that only “social” and “cloud” will matter soon, and that hardware isn’t a good business because it becomes commoditized: as long as Moore’s Law continues, digital hardware is a qualitatively new and more interesting business every few years.

    • Nevermark

      Apple clearly gets the online digital store: customers can buy any time and then redownload apps, music, videos, etc., whenever they want.

      Automatic Cloud backups and restoration of device data are also nice.

      But where Apple is very weak on the cloud is document handling. Dropbox is so much better than iCloud for doc syncing there isn’t any comparison. No arbitrary boxes between apps of different kinds. Ability to organize lots of files of different types. I.e. the ability to put *ALL* your life in the cloud, not just what you have bought from Apple or fits into their odd doc mentality.

      There is so much more that could be done with the cloud once everything you have is on it, in its natural form. Dropbox gets it, in that they are treating their syncing service as the bottom of a rich platform, not just dumb “sync”.

      I think the mistake Apple made with iOS docs is that they wanted to hide OS implementation (directory tree) but failed to realize people still need a way to organize docs across devices (folder tree). These two things seem very similar, but one is implementation and the other is usability.

      Those two things seem similar, but they are really different aspects and the latter is very much a customer need.

      • overestimate

        I think you may be greatly overestimating the degree to which regular people organise their files. Having files contained within the applications they are created and edited in is a vast improvement over the way many or most people currently organise things, despite the limitations and edge cases.

      • Nevermark

        Good point! However a good interface solutions can do both, since within-app doc folders already exist.

        When you ask to open a doc, docs of that type can be shown, and folders containing that type of docs. This looks and behaves exactly as it does now.

        But an optional “iOS Finder” app can give you a view of the top level docs and folders showing all kinds. This will let people organize their all their files together, and easily find and open docs in whatever app they want, while not interfering with the simple in-doc only-supported-file-types view within doc apps.

        Quality interfaces can be designed to consistently support both simple and general use cases, and usually should be.

      • overestimate

        “Quality interfaces can be designed to consistently support both simple and general use cases, and usually should be.”

        Perhaps they can, but nobody has worked out how to, for this exact problem, in the 30+ years of desktop operating systems. It’s fine to move cautiously in this area.

      • henry3dogg

        Hang on.

        I extensively use iCloud to sync documents and it works just fine.

        Furthermore, I use iCloud to sync applications that merge data at the record and field level. Last time I looked, that simply wasn’t a facility dropbox provided.

  • Space Gorilla

    Judging from the comments on Twitter it would seem the definition of ‘the cloud’ is similar to the definition of ‘innovation’. If Apple is successful at it, then it can’t be ‘the cloud’. iTunes is very successful, hence it isn’t ‘the cloud’ (whatever the hell the cloud is).

  • Martin

    ‘The cloud’, from my circle, constitutes services that are free to consumers but are monetized through ads and other consumer-hostile means. Apple indeed sucks at delivering free stuff to consumers, but this is viewed by many people as a superior revenue source because the demand for the free service is assumed to be stable and unlimited and they don’t want to think about whether the ad revenue demand is stable and unlimited.

    • Aksam

      It sure looks like Apple is sucking at delivering millions of free apps to millions of customers. That sounds about right.

    • Will

      That’s not what the cloud is.

      • Martin

        ‘What the cloud is’ and ‘what people think the could is’ are very different things.

      • Will

        Yeah, and my opinion is they should get educated.

        I know people who think the cloud is… a cloud. That doesn’t mean this article is about the weather.

    • joaquim

      why would cloud have to be Free = no value? Well, only to the service selling Your data to advertisers.

    • Mark Jones

      Businesses definitely don’t think of the cloud as free, as they pay for most of those cloud services.

      Consumers don’t think the cloud is only free, as Netflix is not free, and Pandora Radio is not necessarily free (it’s a top grossing app).

  • Walt French

    Time Mag’s Harry McCracken performed a great public service this week by publishing a timeline of all the rumors that Apple would soon do a HDTV. When those things started (2006, yes, pre-iPhone, IIRC), big-screen TVs were a Big Deal® (and I still had a cable connection). It looks now as if Steve “cracked” the code on TVs by not getting into a business where Apple’s expertise could contribute very little to an experience consisting of sitting on a couch 4 hours a day.

    I’d personally like to see the same for the whole “Apple is screwed by the netbooks that are eating the laptop business” meme that Apple faced for a couple of years before introducing the iPad. Did Apple “get” netbooks? No. They “got” something much more interesting—and valuable.

    So today, Apple doesn’t get the “services” business, which I see as largely a genteel way of saying the nouveau-portal, tethered-to-ads world that is Google’s and Facebook’s business model. These aren’t bad businesses, obviously, and just as obviously, Apple is a barely-relevant player. (They insist on old-school stuff that Horace documents here; they are the powerhouse incumbent not of the Google-type cloud-as-a-way-to-sell-ads but the cloud-as-a-tool world.)

    But that begs the question: how will Apple innovate going forward? Do they have the power to disrupt again, the way they did with the iPhone & iPad?

    This may be a little bit of a “with all that manure, there’s got to be a pony in there” writeup, but on the possibility that the Beats rumors are true, I take it that Tim Cook’s Apple is out to disrupt Steve Job’s Apple. Not with Beats per se because not just I, but every fan of Apple has reacted to the rumor with the enthusiasm of the T-1000 going thru its death throes at the end of T2.

    I think Apple is interested in an entirely new business focused around entertainment, rising from the declining but not-yet-gone iTunes business that Horace shows is so strong today. It needs not bling-encrusted headphones nor vanity radio services, but a solid connection inside Hollywood to disrupt the current production business. (One of Horace’s old podcasts talked extensively about how ripe the production business is for disruption, has been for years, and yet, it keeps chugging along.

    The problem in entertainment is NOT that we can’t see enough pixels per second, but rather, that we haven’t found a way for kickstarted or crowd-sourced creative teams to form, find appropriate backing and distribution mechanisms, then move on. We’re still stuck with the development and funding mechanisms appropriate to a 3-channel network, one that needs a star system of producers who gather a group of greybeards together to bless and develop a concept that then sucks up millions to be shown over the very scarce resources of a few hours/week of broadcast, or the big-screen multiplexes.

    Horace says Apple fails in the best way possible to “get the cloud,” and it’s true. But the real challenge is to not displace the incumbents by playing the game that they’re expert at, but to redefine what people need and bring out a new business built on that. Pretty sure that Tim Cook is not just looking to keep iTunes revenues tied to what looks like a declining music business, or to phones for the top 5% of the world’s incomes.

    • scot mcphee

      “It needs not bling-encrusted headphones nor vanity radio services, but a solid connection inside Hollywood to disrupt the current production business.”

      Wouldn’t a movie studio or some sort of production shop be more of a thing in that area? I mean you’d get people who know how to produce and market a movie, which is actually quite a complex business. Does Dre and the Beats crowd have that type of insider knowledge or access? I have no idea.

      I don’t think it’s the production business that’s ripe for disruption (you’ll still need cameras, lights, microphones, sets, directors, actors, screenwriters etc) but the _distribution_ business (i.e. the TV & Cable networks). And you’ve got companies like Netflix and Amazon doing exactly that: that’s the competition that iTunes faces in the content distribution area.

      Does Beats give them that? (Again, I have no idea).

  • Will

    This doesn’t mean Apple gets the cloud…

    • famousringo

      Perhaps because nobody can define what “gets the cloud” means.

      • Will

        It means offering a competitive cloud service, comparable in features and services with everyone else. iCloud is far from cheap or reliable.

      • costs

        What’s the cost of viewing advertisements? Or giving up your privacy?

      • Will

        I don’t see any ads on my Drive or Dropbox. And privacy concerns… what exactly are you referring to? NSA? Cause iCloud is not immune.

      • costs

        Drive and Dropbox only provide a small subsection of cloud services. And I suspect your Drive documents are possibly scanned to build advertising profiles, but don’t care to check as I would never be a “customer”. I wasn’t referring to the NSA.

      • Will

        They are scanned by a robot to build profiles… standard practice in ALL business. If you think Apple didn’t build a pesona about you, based on your conveniently unique Apple ID, your naive.

      • costs

        If they did scan many aspects of my data, then they are publicly lying in their iOS security document, which you should read. And for no apparent benefit, having shown little interest in the advertising business. There’s a lot you can do to protect your user’s security and privacy, even hopefully from the NSA, if you give up the ability to access their data just to build an advertising profile.

        http://images.apple.com/ipad/business/docs/iOS_Security_Feb14.pdf

      • Will

        Right, because Apple buys Beats for billions because they “think” that’s their target users. There’s no data collected about users to back that up /s

        Just because they don’t use your data to serve you ads that doesn’t mean they don’t have it. Or does that make it alright?

      • Space Gorilla

        I suspect the Beats deal is about the music service and bringing Android users into the Apple ecosystem. Please try to think before you post.

      • Will

        Completely unrelated reply, bravo

      • Space Gorilla

        Ah sorry, thought you said something dumb about Apple buying Beats. My bad :)

      • costs

        Did you read the document? Or do I just get a rant as a reply.

      • Will

        I really don’t see what the document has to say about Apple collecting data.

      • costs

        Then you didn’t read the document. End-to-end encryption prevents them from collection data from many of the services they provide.

      • Will

        That’s only for p2p communications!

      • costs

        What are you talking about. Again, I don’t think you read the document. It covers many things that aren’t peer to peer communications.

      • Will

        I’m sure Apple has excellent security measures. I just wonder why the NSA insisted in talking to Apple too then…

        Don’t be naive

      • charly

        Apple is a very ease-of-use company. That bits with security so i have my doubts of their excellence.

      • Kizedek

        Ah, in your opinion ‘ease-of-use’ and ‘security’ are incompatible? And a company can’t be excellent at more than one narrow thing? That is why Apple makes such a great “lens”. No wonder you misunderstand Apple so thoroughly and persistently? You’ve been brainwashed all these years by all the mediocrity.

        And that, in a nutshell, is what is wrong with computing.

        “Ah, easy to use? Must be a toy that is not good for anything. It surely can’t be secure. If you aren’t torturing yourself every day, you must not be doing real work! Viruses and trojans? Just the cost of doing real business… if you don’t have them, you must be doing something wrong on a platform that isn’t any use for real work by the ‘enterprise’; anyway, it’ll just be a matter of time before you realize how insecure your toy computer really is…”

  • obarthelemy

    Problem is, Apple’s cloud is locked in to their devices, and the reciprocal is mostly true too, either because substitutions are not allowed or because most people don’t change defaults (see IE EU lawsuit on Windows).
    People are buying iPhones and their apps, not iTunes, iCloud, Me… Having Apple services rise when iPhone/iPad buyers are locked in doesn’t prove much of anything, beyond that Apple can provide a good enough experience so as not to turn punters off their devices. And counting the AppStore in “cloud” warrants a bit of an explanation… is anything and everything that is online a cloud, these days ?

    • tjwolf

      “Problem is, Apple’s cloud is locked into to their devices…” – and why is that a problem from financial perspective as long as Apple can show the kind of growth these charts show?

      “is anything and everything that is online a cloud, these days” – yes, “online” is synonymous with “cloud”.

      • obarthelemy

        1- It’s not a problem per se, but there’s a causality issue: Apple’s cloud is not succeding by itself, it’s riding the coattails of their devices. Nothing less, nothing more. It means Apple’s cloudy things are not bad enough to deter buyers, but they are not succeding in the face of choice and competitors the way ecosystem-agnostic and/or OEM-independent suppliers are. The make a parallel, I’m sure BMW (or their dealers) are making a killing on service contracts… not sure they’d sell a lot of those if they weren’t selling cars first (DRMed cars, nowadays), so any assessment of BMW’s service business must take that into account.

        2- You mean Amazon.com (the retail part) and nytimes.com are cloud businesses ? I beg to differ.

      • SLNH

        And why would you believe the retail Amazon is not a cloud business? It sells and stores the same type of digital content as Apple and AWS was a derivative of that business.

      • obarthelemy

        it mostly sells.. shoes ? I’m curious how e-tailing became cloud.

      • SLNH

        Just as Apple’s cLoud stores its digital output for its customers, Amazon performs the same service for its digital media and more. My ebooks are stored in the cloud until I am ready to view them. My mp3 collection as well as my digital videos are there as well. If I download files from the internet, guess where they are stored. You are really starting to embarrass yourself.

      • Mark Jones

        And all of Google’s services ride the coattails of its search and advertising business. So what.

        Apple provides all its services to make its iOS devices really simple to use – turn it on and it’s all there, no app downloading, no friction, no confusion. Plus Apple enables choices for those who are willing to take extra steps – they can download and use other companies’ cloud services. For most mainstream consumers, Apple’s simple cloudy things, like FaceTime and iMessage and Siri and iTunes, actually are well-known features, a driver of sales. And unlike all other smartphones/tablets, Apple’s simple cloudy things are only on Apple’s devices.

      • jfutral

        “And all of Google’s services ride the coattails of its search and advertising business. So what.”

        And not everyone who buys an Android phone is buying Google’s services. The services come with the phone. And the services come with each other. I never use Google+, yet I have a Plus account simply because I use Google Drive. And one gets a gmail account with Drive, even if one doesn’t want it. (Yes, I know it is possible to sign up for a Google account without getting a gmail address, but it is so hidden as not to be noticeable until long after the fact or someone who has done the research points it out to you. It is obviously not what Google wants you to do.)

        Joe

      • JohnDoey

        No that is absurd. It is iPhone/iPad/Mac that is riding the coat tails of Apple’s cloud services. You have it backwards.

        Before App Store, Apple sold something like 6 million iPhones in an entire year, mostly to iTunes+iPod users who saw iPhone an an iPod phone. Once App Store launched, Apple very quickly ramped up to 6 million iPhones per month, now selling also to users who never had an iPod and saw iPhone as a pocket PC.

        iPad rode the coat tails of App Store by launching with 10,000 full-size apps and ramping up very quickly to 100,000 as users who bought iPad to get App Store demanded more apps, and then the availability of more apps sold more iPads in a virtuous circle.

        App Store is also fundamentally based on iTunes Store from 2003. App Store makes powerful, dangerous, native C/C++ PC apps as easy to buy and install and maintain as the movies and music on an iPod. So iPhone and iPad come AFTER Apple’s cloud. Well after. The devices ride the cloud cost tails.

        iTunes was the killer app for iPods. App Store was the killer app for iPhone and iPad. The devices themselves are like picture frames or plant pots — necessary infrastructure but beside the point. The thing you are really buying is the picture or the plant, which is the cloud services. Even native iOS apps are a cloud service because they are installed and maintained solely from the cloud.

      • obarthelemy

        App Store is not cloud. Sure, smartphones by essence need apps, and Apple didn’t understand that at launch and added it later.. but AppStore is not cloud, it is online, but with no “distributed computing over a network, where a program or application may run on many connected computers at the same time”

      • Fran_Kostella

        You don’t know what you’re talking about. The AppStore fits all of those definitions. It is global and distributed over the whole planet. It does calculations and operations over a global network and manages transactions in the magnitude of billions per day. You think that is done on a single PC in a garage? You think the currency conversions, taxes, billing and reporting, update and restoring purchases, validating accounts and handling credits are not distributed over tens of thousands, or more, connected computers?
        You obviously haven’t thought about it very deeply or don’t understand the complexity of distributed systems using that volume of transactions. You CANNOT scale up to the level of transactions and operation that the AppStore does without distributing the work among a huge number of machines running at the same time.

      • obarthelemy

        The AppStore uses electricity to run, so Apple is an electricity company, too ?
        You’re the one who has no clue, if you want to go down that road.

      • SLNH

        Part of what the cloud does is storage. Apple, Amazon, Drop box, etc earn money from storing individuals data.

      • obarthelemy

        DropBox *is* a cloud company: they make and sell cloud services. Amazon retail sells shoes ! Can’t anyone spot the difference ?

      • Mark Jones

        You wrote cloud computing is “distributed computing over a network, where a program or application may run on many connected computers at the same time”

        Amazon’s store is distributed computing over a network, where Amazon’s program is running on many connected computers at the same time. Does it really matter what the store application is used to sell?

      • obarthelemy

        What you sell is the only thing that counts, how you make it is irrelevant ? Is Amazon an electricity, trucking, janitorial, training, translation, … company ? because they sure use that too in order to run their business …

      • SLNH

        With Amazon, you never can tell what business they may have. They are a conglomerate and yes they do transportation and I wouldn’t be surprised to see them in the network communication business in the not to distant future.

      • SLNH

        As a sample, maybe you would like to take a look at this article and revise your ideas

        http://wwwDOTmacobserverDOTcom/tmo/article/cloud-storage-price-comparison

        A business can be more than one thing. For example Amazon is a publisher, a producer,, develops hardware and software and has AWS as well.

      • Fran_Kostella

        You keep trying to push an arbitrary definition of what the cloud is in order to bash Apple. Amazon “retail” does indeed sell cloud services other than what AWS sells. There are tons of businesses that buy cloud services from Amazon’s retail side, I currently am working with a startup that uses them. Your desire to bash Apple blinds you to the paucity of your argument.

      • Fran_Kostella

        Electricity is not comparable to cloud services in any meaningful way other that something that gets billed for by usage. If you’re going to counter my claims me then try to pick something that you can make an argument from. Again, you don’t seem to have any clue about what a cloud system is or how it fits into the technological infrastructure of the modern world.

      • obarthelemy

        You’re confusing the product on sale with the means of producing it. Cloud companies *sell* cloud products, any company (even non-cloud ones) can *use* the cloud to make their product.
        It’s a very easy distinction.

      • Fran_Kostella

        Amazon and Apple both sell and consume cloud “products”, so even if I buy into this useless distinction you’re making, all of your arguments about who is cloudy and who is not totally miss the point of the article.

        Your distinction is silly and useless because it doesn’t tell us anything useful about those businesses or why and how they are successful. Amazon and Apple are wildly successful cloud companies. You seem to think that by coming up with an arbitrary distinction that defines Apple as non-cloud you can dismiss Horace’s remarks without ever addressing them. You’re not convincing.

        Anyone can provide cloud services, I’ve worked with a handful of companies helping them set up the tech to do it. It isn’t a useful distinction because anyone of moderate skill can provide those services by opening an AWS account and plugging in some services and providing them on the internet. AWS will give a startup a lot of free service to get them started so the only initial cost is labor.

        The real distinction, and the point under discussion, is do you have a real business that is making money on your cloud services? This blather about selling cloud services is just muddying the water.

      • cloudpedant

        Is Dropbox a cloud service, by your definition?

      • obarthelemy

        You need to ask ?

      • cloudpedant

        Yes, it seems to do approximately the same fundamental thing as the App Store, just for apps and not arbitrary files. Tracking ownership, synching install, restore on new device, etc. And it didn’t fit the definition you provided. So I feel it must not be a cloud service to you.

      • Mark Jones

        LOL. Just like the iTunes Store, the App Store itself, is handling the processing of hundreds of millions of transactions/downloads a day and is very much distributed computing over a network, where the Store application is running on many connected computers at the same time.

        I think everyone knows the Store is not just one computer connected to the Internet. You may want to try again.

      • obarthelemy

        So any comapny that uses the cloud to run their business is a cloud company ? Congratulations, you just, at a stroke, make the whole worldwide economy “cloud”.

      • Mark Jones

        Nope. If I had a small business that was using Google Docs, it would not be a cloud company.

        Apple has built its own processing/storage infrastructure connected across several data centers that it uses to run its Store applications, as well as all the other cloud services (iMessage, FaceTime, Maps, etc). I don’t. Can’t you see a difference?

      • obarthelemy

        If my small business switches from gmail, buys a copy of Exchange Server, and makes email available off-site over the internet, does it then become a cloud business ? Because then “i’ve built my own”…
        It’s not about how you internally run your business, it’s about what you sell. Selling apps is not cloud: is Humble Bundle a cloud company ?
        iMessage, FaceTime, Maps are cloud. The AppsStore isn’t, it just runs on a cloud, it doesn’t sell any cloud services.

      • dteleki

        “AppStore is not cloud, it is online, but with no ‘distributed computing over a network, where a program or application may run on many connected computers at the same time’ ”

        “my small business switches from gmail, buys a copy of Exchange Server, and makes email available off-site over the internet… It’s not about how you internally run your business, it’s about what you sell.”

        But what if you then rent out mailboxes in your internet-connected Exchange Server, to the public, for a monthly fee? Are you NOW a Cloud vendor, at least in part, whatever the REST of your business may be? You yourself have only one computer obviously involved in the service, namely the Exchange Server computer; but this is also “distributed computing over a network”, in the sense that the email clients of your customers are all running on multiple other computers. Is your one-server-only email-box-for-a-fee service NOT a Cloud service?

        Now, I purchase a game from the App Store. I download it onto multiple iBranded computing devices that I own. My game statistics, my checkpoints, my achievements, my challenges to my gaming friends, are all data records being stored SOMEWHERE within Apple, and all being replicated from there across all of my iThings, and also (in part) to the iThings owned by my gaming friends whom I challenged. That’s a shared storage service, being interacted with by multiple computers over a network, where those multiple (possibly) simultaneous computers are (possibly) owned by multiple people. Is THAT a Cloud service? How can it NOT be?

        But then, the fact of MY OWNERSHIP of that game is ALSO a data record stored somewhere within Apple, presumably within the App Store. It’s what allows me to purchase the game once from the App Store from one of my iThings, then download it FOR FREE to all of my other iThings. The ready-to-distribute-and-install program code of the game itself is, yet again, a data record stored somewhere within Apple, presumably within the App Store (with the program code itself stored in a gigantic Blob field in the record). Several of my iThings (which are all computers) could be downloading/installing the game at the same time, and they are connected to the App Store over a network. So then, is all THAT activity by the App Store, NOT a Cloud service?

      • obarthelemy

        The game you describe does use the cloud, but the fact that the game is downloaded from the appstore does not make the appstore itself cloud. If the same game was installed off a CD, would the CD be cloud ?
        Apple does have a cloud service, just not the appstore.

      • dteleki

        So, your argument is that Game Center is a cloud service, whereas App Store is not. And my argument is that BOTH are cloud services.

        My purchase record of (for example) the game “Smash Hit” is a single row in a database table that is stored within the App Store cloud service and accessible over the internet (possibly) simultaneously by all of my iThings, in EXACTLY the same way that my achievement of “Mayhem” in that game is a single row in a database table that is stored within the Game Center cloud service and accessible over the internet (possibly) simultaneously all of my iThings.

        Similarly, my challenge to 5 of my friends to match my achievement of “Mayhem” is a collection of 5 rows in a database table that is stored within the Game Center cloud service and accessible over the internet (possibly) simultaneously by all of the iThings of my 5 friends and me, in EXACTLY the same way that the program code of the several successive versions of “Smash Hit” is a collection of several rows in a database table that is stored within the App Store cloud service and accessible over the internet (possibly) simultaneously by all of the iThings of all 14 million people who have purchased “Smash Hit”.

        “If the same game was installed off a CD, would the CD be cloud ?” It certainly would NOT be, if there were 14 million cd’s in the possession of 14 million people, each of whom installed the game from a different cd, once for each gamer. However, if there is only ONE cd in the entire universe, attached to a server somewhere and accessible over the internet, and 14 million people all over Planet Earth install the game 14 million times onto 14 million computers by downloading a single datafile of the game’s program code 14 million times over the internet (possibly) simultaneously from that ONE cd, then YES, the cd and its cd drive and its server are a cloud service. It is a mere implementation detail whether that single datafile of the game’s program code is stored on a read-only optical disk, versus a read-write magnetic disk, or some other data storage device. What is important is that a shared data resource is made available by a server over the internet to (possibly) multiple computers, (possibly) simultaneously.

      • SLNH

        Your game center is stored in Apple’s cloud. The game center, Appstore iTunes are all stored in the cloud which serves its customers. Apple currently does not participate in the larger cloud services business that Microsoft, Google, Amazon, Salesforce etc. engage in.

      • charly

        Imessage, facetime and maps aren’t even cloud. Cloud is a third party that handles something private. In Maps Apple is not a third party but the other party and imessage and facetime could be made that Apple only knows the connection

      • Will

        “The devices ride the cloud coat tails.”

        Yeah right, and just by coincidence the iPhone price dropped dramatically at the same time the App Store was released. I’m sure that’s what drives the device sales /s

        “Even native iOS apps are a cloud service ”
        You clearly don’t know what a cloud service is. Hint: NOT a native app.

      • Mark Jones

        The iPhone price dropped because AT&T and Apple agreed on an alternative pricing arrangement; the new arrangement matching how other smartphones were sold in the US – with subsidy. Prior to that, AT&T paid Apple a $10 monthly fee per iPhone (out of the $20 data plan fee AT&T was charging the consumer) but there was no subsidy.

        Whether an app is native or not has little to do with whether it involves a cloud service. Office 365, Evernote, Dropbox, Facebook, Google Maps are all native iOS apps. Don’t those apps provide a cloud service?

        “You clearly don’t know what a cloud service is.” LOL.

      • Will

        “Don’t those apps provide a cloud service?”

        No, they consume a cloud service.

        I only mentioned the price dropped cause you said the popularity of Apple devices took off once the App store was released. I pointed out that the price dropped significantly and that may have had a bigger impact on popularity than any cloud service.

      • Mark Jones

        So to be more precise: Those native apps provide services to the customer by using the cloud computing that is implemented by those companies. Again, whether an app is native or not has little to do with whether a cloud service is being provided.

        I think most would say that both the price drop and the App Store were drivers of the ensuing sales growth. But since all the other smartphones were now similarly priced, the App Store became one of the major differentiators in that period.

      • Will

        Oh come one, the app store was the main differentiator?! How about the huge touch screen?! What about the incorporated iPod?! Really, the app store was different… /s

        I think the App Store took a while to be understood. Remember the “there’s an app for that” campaign? It happened because people didn’t give a shit about apps until a few years later.

      • Mark Jones

        I never said an app is a cloud service. I said those apps provide a cloud service, or to be more exact, those apps provide the user access to a cloud service, or those apps provide the user-facing front end to the cloud service.

        By 2009, Apple’s competitors’ smartphones had “huge touch screens” (with some, even larger than iPhone), mp3 players, and the same subsidized price. But the App Store, introduced in July 2008, was way ahead of its competitors, and by Sep 2009, Apple had already reached 2 billion apps downloaded, with the last billion sold within 5 months. So very much not “a few years later.”

      • Will

        Right, so in conclusion Apple and the App store are just clients of the cloud, that is built by someone else. Got it.

      • Mark Jones

        Wrong. So in conclusion, many of Apple’s apps (including the App Store app) are clients of the cloud, which is also built by Apple. It’s quite obvious that Apple supplies the cloud services used by its apps.

      • Will

        The cloud is not built by Apple, Twitter and Facebook and other apps use varoius cloud providers (or building their own, but that’s rare)

      • Mark Jones

        I don’t know what distinction you’re trying to make. Although Apple and Facebook still consume turn-key wholesale data center space, it’s well known that Apple and Facebook design, build, and operate their own data centers, using open source, third-party, and internally-developed software, to deliver their cloud services. Microsoft also both builds and buys (leases).

      • Will

        Ugh, why is this so hard?

        The app store is not a cloud service! You can’t sign up for it, you can’t rent it, you can’t deploy to it, you can’t configure your own personal environment. Only Apple can and they control it completely. They are not a provider in any sense of the word. Apple’s cloud service is iCloud, which we can all agree does not get the attention it deserves.

        If you want to consider the App Store as an example on how Apple “gets the cloud”, be my guest, you would be right in that case. iCloud however…

        This discussion is purely semantics so I’ll leave it at that

      • Fran_Kostella

        Amazon.com is definitely a cloud business. Amazon built AWS to support Amazon.com then eventually realized they could sell access to their infrastructure and thus AWS appears and thousands of cloud startups appear. The notion that there is some magic dividing line that lets you pronounce “not cloud” by some random criteria that eliminates the largest online retailer who built the most advanced cloud services is just silly. Next, are you going to say that the iPhone isn’t a smartphone?

      • obarthelemy

        e-tailing is not cloud. Amazon runs on a cloud, but the e-tailing business (selling shoes) is not a cloud business.
        In other words, any company that uses gmail is using the cloud. Does that make them a cloud company ? No more than any company using electricity is an electricity company. Electricity companies make or sell electricity, cloud companies make or sell cloud services. Amazon retail doesn’t do that (confusingly, Amazon AWS do, so I might have picked a better example to start with…)

      • Fran_Kostella

        You’re simply nitpicking with an arbitrary definition that doesn’t have anything to do with Apple “getting the cloud”. Apple clearly gets it and makes tons of money from it, as does Amazon. Both companies provide cloud services for others and both have major lines of business depend on their technical skills. The SCALE is the real issue, not if it is a retail operation.

      • Mark Jones

        It’s not that Amazon is using the cloud; it’s that Amazon offers services via the cloud.

        Similarly, it’s not that a company using gmail that’s a cloud company; it’s that Google, a cloud company, offers gmail via the cloud.

        In accordance with whatever your definition of cloud is, name the consumer-facing companies that you believe are cloud companies?

      • obarthelemy

        Any company that makes or sells CPU power, storage, computing (online apps) over the Internet (aka software as a service, platform as a service, and infrastructure as a service): DropBox et al, iTunes (not a company, but still, a business), Amazon AWS (NOT the shoe-selling part), salesforce.com,

      • SLNH

        Amazon Cloud Drive per Wikipedia “Its storage space can be accessed from up to eight specific devices. The devices can be mobile devices, different computers, and different browsers on the same computer. The device limit can be reached if web browser cookies are not stored, or are deleted.

        The first 5 gigabytes of storage is free; additional space costs $USD 0.50 per gigabyte per year.

        Amazon announced the product on March 29, 2011.

      • obarthelemy

        Indeed, and that’s cloud. that’s not amazon retail.

      • SLNH

        That is Amazon. Cloud service to individuals and businesses. I don’t see you making the distinction with Apple retail. Amazon is a corporation made up with many businesses. It is not a “retail” company.

      • obarthelemy

        I’ve been strenuously differentiating Amazon retail from AWS. AWS is cloud

      • SLNH

        AWS is Amazon. Amazon is not AWS.

      • Fran_Kostella

        And yet I pay Amazon “retail” for that service. And I also pay Amazon AWS for S3 storage for offsite backups. Hmm, cloud services provided and billed from both entities. Your desire to beat this dead horse is quite appealing!

      • dteleki

        I bought physical music cd’s from Amazon several years ago, before Amazon Cloud Player existed. The cd’s were physically shipped to me. “Amazon retail” did this. I still have those cd’s in my physical possession.

        Recently, Amazon chose to set up for me, Amazon Cloud Player, with datafiles of all of my past purchases of music cd’s already stored there without my having to do anything; my purchased music is now ready to be played from smartphones, tablets, PC’s, and web browsers.

        So, is this Amazon retail? (Hint: Amazon sold me stuff.) Or is it Cloud? (Hint: It’s called a “Cloud Player”, and it’s called that for a reason.) Or is it (gasp!) BOTH? Bearing in mind that Amazon retail is the entity that sold me those cd’s in the first place? And bearing in mind that the fact of my OWNERSHIP of those physical cd’s is a datapoint that is recorded in an Amazon retail computer, that then arranged to allow me to play that music on any device of my choosing, with Amazon Cloud Player?

        And if THAT is BOTH Amazon retail and Cloud, then how is iTunes NOT both a retailer, and Cloud? The biggest difference is that I never got physical cd’s physically delivered to me from iTunes.

        And then there’s the case of iTunes Match. Music datafiles from my Amazon-purchased cd’s, as well as my cd’s from the late, lamented Rose Records, found my way into THAT.

      • Mark Jones

        That’s a different definition than the one you gave earlier about distributed computing over the network. But that’s okay; it’s close enough.

        So if iTunes is cloud, why wouldn’t the App Store also be? Apps that I’ve purchased but not downloaded are “stored” for me in the App Store servers. GameCenter maintains leaderboards and provides services using the App Store’s CPU/storage/computing power.

        I assume by you’re reference to “shoe-selling part”, that you’re including the Amazon digital stores (mp3, video, app, cloud drive) as part of the cloud. But both parts use the Amazon CPU/storage/computing infrastructure to serve the consumer. So what distinction are you trying to make?

      • obarthelemy

        Because iTunes streams the songs (well, can stream the songs); AppStore Doesn’t stream the apps. OnLive streams apps.
        The “storage” part is indeed a bit of a grey area, but any business with a website can list my past orders, that doesn’t make them cloud.

      • Mark Jones

        I think you’re making some distinctions that aren’t relevant as to whether Apple “has anything good in the cloud to speak of, and the stuff they have in the cloud I think is largely not good.” But I’ll give this angle one more try.

        If I’m a really large company (size of ExxonMobil or Walmart or US DOD), and I don’t trust outsourcing computing or data storage to external companies, so I build my own globally
        distributed networked computing infrastructure to service my company’s needs, The design is proven to be easily scalable as it now covers all the company’s global needs. Have I not built a “cloud” within my company? I think so, though some would say I am not a “cloud company” because I don’t
        offer customers outside my company access to any of my infrastructure. 



        So let’s say I have excess storage capacity, and I have enough quality personnel, so the company decides to sell access to cloud storage/backup services to 500 small external customers. Have I become a “cloud company”?

        One of the company apps on the internal cloud infrastructure was a global internal store for procuring and delivering materials and supplies throughout the company. Now an external customer wants a similar store for his company running on my infrastructure, so I provide it. Have I become a “cloud company”?

      • DesDizzy

        So having 800m iTunes accounts and 400m users is not succeeding??? In who’s world is 800m users not success?

      • henry3dogg

        Google’s cloud is not succeding by itself. It’s riding on the coat tails of their search engine.

        Amazon’s cloud is not succeeding by itself. It’s riding on the coat tails of it’s retail business. And you said yourself, e-tailing is not cloud.

        Drop box isn’t succeeding at all. It can provide service, but it can’t make money from it.

        And since all of these other non cloud things are so wonderfully untied to hardware, they can be used on Apple devices, which gives Apple users more choice, but most of them choose Apple’s cloud.

      • charly

        AWS is sharing resources with Amazon retail but their customer base is completely different. I also seriously doubt that Amazon retail is even close to using 10% of AWS computers. With Amazon going for growth it is a bit difficult if AWS is a successful potential profitable company but nobody can deny that it is a very large cloud provider of cloud services

        Dropbox etc. may not be profitable at the moment but they have mindshare and with a cost base that has a Moore’s law base. It wouldn’t surprise me if they are very profitable in 5 years. It reminds me of youtube. The computer part made it unprofitable in 2008 but those parts have so dropped in prices that youtube must be spinning money

      • SLNH

        Amazon is the biggest computer services company out there. It had over 3 billion in revenue last year.

      • Davel

        You miss the whole point of Apple

        The hardware supports the software and vice versa

        As others have pointed out the software works just fine

        If the software was not good enough then they would not sell 50 m phones in a quarter.

        There is a reason Apple devices dominate ecommerce.

        Apple is not interested in building a software stack that is independent of their hardware. That is the basis of your whole view.

        It contradicts their business model.

      • obarthelemy

        You miss the whole point of the cloud.

        If I need a specific device, or brand of devices, to access my files, content, apps, then the cloud becomes not a way to have ubiquitous access to my stuff, but a lock-in tool similar to MS’s proprietary formats. Want your content ? Stick with us !

        All other cloud players
        1- are multiplatform
        2- are successful independently independently of hardware sales

        As you say, Apple’s “cloud” is not independent of their hardware. Looking at its success or failure makes no sense: it’s there, it’s mandatory, it’s closed… And you’ve got to add the non-cloud App Store to make it look vaguely relevant.

      • Profit Is King

        What’s “vaguely relevant” is that they’re the most profitable business in the universe. Profits are the end; the cloud is at best one of the means. I’m happy with the most profitable, however they achieve it.

      • Apple kicks it

        Their business is the most successful in the universe. Period.

    • Mark Jones

      Umm, why does a cloud business have to exist and succeed independently from any other business for it to mean “getting the cloud”? If consumers had to pay for Google’s services, would it be the “success” it is today, riding on the back of its search and advertising business?

      Why would AppStore and iTunes Store not count as being a part of the cloud? Isn’t Netflix and Spotify part of the cloud? Isn’t Microsoft Office 365 part of the cloud? Isn’t

      The iPhone was a phone, an iPod, and an Internet Communicator. You may have already forgotten, but back in 2007, iTunes and iPod were significant reasons to buy iPhone, and not Nokia, Blackberry, or Palm. (In fact, Palm spent considerable resources trying to maintain sync with iTunes.)

      Finally, iOS users can use substitutes for almost all of Apple’s cloud services. Google or Amazon or others provide substitute maps, music/movies/tv/books, messaging, photos, document creation, voice search, video calling, mail, calendars, browsers, etc.

      • SLNH

        “Isn’t Netflix and Spotify part of the cloud?” Netflix is part of Amazon’s AWS cloud services

      • obarthelemy

        Because locked-in customers are locked-in ?

      • Mark Jones

        If you read my comment, I’m not locked-in — I have substitutes for most if I wanted to use them.

        If you seriously insist I’m locked-in, then Android users are locked-in as well. And as jfutral pointed out, Google’s services similarly get the free ride on Samsung/HTC/Motorola/etc Android devices.

      • godsend

        Yes, this argument conveniently allows you to dismiss any aspect of an integrated product at whim, and blame success on any other aspect. People only buy iPhones because they’re locked-in to the hardware if they want to use iOS. People only use iOS because they’re locked-in to the software if they want an iPhone. It’s a godsend for online comment posters.

    • JohnDoey

      You are wrong on the facts, which is the whole point of this article.

      iCloud works with a Windows PC running IE or Chrome. It does not only work with Apple devices.

      iTunes works with a Windows PC running the most popular Windows app in the world: Apple iTunes.

      Is everything and everything that is online a “cloud?” Not necessarily, but iTunes and iCloud most definitely are. In both cases, local disk storage of files is replaced by remote disk storage (“cloud”) so that the user can be freed from going to one local system to access their files, and can also access those files from mobile devices. Both iTunes and iCloud also provide cloud backup to ensure data permanence.

      The thing you have to keep in mind is it is Apple versus Rest Of Tech Industry because Apple builds their own hardware/software/services stack and everybody else shares a generic part of their stack in some way or another, and further, Apple takes well over 50% of the profits in everything they do. So for every Apple product there is a cabal of not-Apple that is seeing its collective tech and profits marginalized more and more every quarter. They are scared and they make up myths to make themselves feel better: Apple doesn’t get the cloud, iPhone doesn’t multitask, iPad is just a big iPhone, you can’t type on a glass screen, the Mac is a toy, Apple gear is overpriced, Android 2012 is Windows 95 instead of Windows 2012, and so on and so on. If you are a rational thinker, you look at data and debunk these myths before you build a worldview around them.

      • obarthelemy

        Mmm, so now Javascript apps are satisfactory, after you diatribe on Java in the other post ?

        Anyhoo, this is not my main issue, which is that counting AppStore in Cloud really is “not getting the cloud”. There’s a nice wikipedia page about what Cloud is. e-tailing is not it, even e-tailing of digital goods instead of socks.

      • DesDizzy

        So Amazon is not a “Cloud” company then!!!!

      • henry3dogg

        And Google certainly isn’t.

      • SLNH

        Wrong. They are both major players as is Microsoft. Just because they make the majority of their money elsewhere does not mean they are not heavily invested in cloud services.

      • No profits for Amazon

        Amazon doesn’t make money.

      • SLNH

        Yes, keep telling yourself that.

      • Its Amazon that says it

        it’s called SEC filings.

      • SLNH

        You seem to have a problem understanding the difference between gross and net profit. Or its assets of 94 fulfillment centers and 36 ( as opposed to Apple’s 4) data centers. Oh, and how healthy is its debt?

      • henry3dogg

        “Mmm, so now Javascript apps are satisfactory, after you diatribe on Java in the other post ?”

        What has Javascript got to do with Java?

      • henry3dogg

        “There’s a nice wikipedia page about what Cloud is”

        And if you read it soon enough after his post, it will support his case.

  • Fran_Kostella

    In so many ways “the cloud” is the proverbial elephant in the room surrounded by blind men, each with a different understanding depending on what part they touch. From my developer’s perch, the cloud has to do with scale and reliability and the ability to build such a system and make it available to others.

    Any decent IT staffer can plug a server into a network and make some capability available and has been able to do so for at least a decade or so. But a single server is limited in what it can do and if you want to provide access to hundreds of millions or billions, or beyond, you have to face all sorts of complexities and chaotic situations. For example, providing global reach means that the speed of light becomes a variable in your planning. How many times can you send a packet of data back and forth between NY and SF? Your intuition is likely off by an order of magnitude or two, so guess before you look it up.

    Hardware fails all the time, so no component in your system can be assumed to be reliable. That means that you need to have multiple copies of data for when a drive fails. Servers die and you may lose that transaction data and you need to cope somehow. Databases can no longer fit on a single server so they have to be split up, which makes processing and analysis so much harder. The system eventually gets so big that the only way to test changes is to do so on the running system!

    I could go on at length, but the point is that none of this is easy and at each new milestone in scale many new and unanticipated challenges arise. This requires great talent and resources just to build. Then, to provide a system that others can use to build internet scale systems requires even more effort. Amazon is clearly the leader here, with their AWS.

    To my mind, there is the ability to “use the cloud” to build a tech company that scales up. Then there is the ability to “engineer the cloud” which is what AWS has done. A lot of the other “cloud companies” people mention here are using AWS or similar to build a cloud company. Many of them desire to build their own clouds, and eventually it will get easier to do that, but for now it requires massive capital and great talent. Meanwhile, as you look to build your cloud, everyone else is still pushing the envelope and the demand for services keep rising.

    For people to suggest that Apple doesn’t “get” the cloud, when they not only use the cloud for nearly a billion devices in their ecosystem, but they have clearly constructed massive parts of their own cloud systems is just silly. I’m not sure how much of their cloud hardware is in-house, but they’ve been building it out for years, just look it up or read back through the articles here.

    If Apple wanted to make a Dropbox clone they could do it fairly easily. Hell, even *I* could make one with a small team in a few months! The real genius of Dropbox was creating their beautiful simplicity at the right moment. If I created a perfect clone of their system it would not likely be a success. Too little, too late. Apple doesn’t have a Dropbox clone because they don’t want one.

    However, as a iOS developer, I depend on their massive cloud infrastructure to provide app support. From the global sales and app distribution side, to the many Apple provided services my app can use. I can add components that my app downloads from Apple servers, for free. I can store app documents in the cloud and share them among the devices on an account, for free. I can use Game Center to create leaderboards and in-app status and find-a-player services, for free. More time for me to focus on my app and not how to build cloud services. Every year brings new and better services that help developers and which are free for us to use. It helps us and that helps their ecosystem. Do I care that it is a walled garden? Hell no. I can always have my app use other cloud systems or roll my own if I like.

    I think the fantasy here is that people look at things like Dropbox or Evernote and think that Apple is unable to compete. Clearly, they are interested in their ecosystem and expanding the capabilities and services they provide to those who buy into their ecosystem.

    When you see developers and consumers abandoning Apple in droves, then you can say Apple doesn’t get it. Still looks like a lot of upside from here!

  • ShirleyMajor Langer

    Well said.

  • handleym

    There are different versions of “not getting the cloud”…

    I, personally, am EXTREMELY uninterested in the sort of mindless twaddle that thinks replacing local storage (which gets cheaper and faster every year) with remote storage (which is limited by finite wireless bandwidth, and monopolistically controlled wired bandwidth, and requires substantially more power to transfer data) is always, at all times, for all circumstances, a great idea.

    But a different version of the issue is to realize that a large part of the future of computation is big data, statistics, and contextual computing — a set of ideas that encompass everything from maps and search to voice recognition to image recognition and automatic translation.
    Apple seems unprepared for this world. They got into maps apparently reluctantly and at the last minute and it showed (and still shows). They’re not into web search, and that of course shows when you try to search maps. They’re not into automatic translation — and that shows when you try to use maps outside the US. They’re not into image recognition. They’re not into the sort of mail scanning which allows Google to automatically put events on your calendar, tell you your flight has been delayed, give you updates on parcel delivery, etc. And so on and so on.

    Computers were computation devices. The iPhone took off because it was the first success at blending the previous always-on communication device with computation. But the next frontier is context, and Apple looks weak there. There are so many things you can now imagine your phone doing , and which you imagine Google will offer shortly, where Apple has no presence. A very obvious set are the issues surrounding being in a foreign country, from having maps work well to being able to photograph Thai writing and have it translated, to being able to scan bar codes and find a who nearby that sells the product.

    It is true that Apple often SEEMS to be weaker than it is because it does so much in private. Rather than seeing lousy product grow to value over two years, general the Google pattern, Apple will give us nothing for two years then something more or less full formed. Even so, their behavior in this space so far seems primarily reactive, and one gets the feeling their heart is still not really in big data. Personally I’d be much happier, and more excited, if Apple spent $3.2 billion on a machine translation firm, even if that’s a more speculative bet and less likely to solve an immediate problem than Beats.

    • Space Gorilla

      But isn’t Beats Music the reason Apple is doing that deal (if they indeed are buying Beats)? And isn’t Beats Music essentially a smart search engine for music? That seems like big data to me, just a different focus from some of the examples you talked about. Granted, I have a limited understanding of how good Beats Music is, but at first glance it seems like a great idea. I need music curation more often than I need language translation.

      • Davel

        I believe Beats is about acquiring talent as much as it is about the software and brand.

      • Space Gorilla

        Yes, the value of the people is obvious, connections AND talent. Iovine can negotiate deals throughout the entertainment industry that I doubt anyone currently at Apple can. Iovine is almost ‘Jobsian’ in that regard.