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Cloud Services Forecast To Double in 4 Years, Despite Safety Concerns

Cloud Services Forecast To Double in 4 Years, Despite Safety Concerns
October 16, 2012 10:01AM

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"Folks need to keep the limitations of these offerings in mind before they jump in wholeheartedly," said analyst Charles King of cloud services. "Overall, I suggest that businesses and consumers interested in cloud storage should consider such a service to be like a back-up data center -- a good safety precaution but not a primary storage source."

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In news that cannot be pleasing to companies that manufacture flash drives and other storage solutions, cloud services are becoming more and more popular, expected to rise from 500 million subscriptions worldwide this year to a staggering 1.3 billion by 2017.

A survey by iSuppli Mobile & Wireless Communications Service found that consumers using services like Apple's iCloud, Google Drive, Microsoft's SkyDrive, Dropbox, Mozy or SugarSync rose to 375 million in the first half of this year. That's 75 percent of next year's projected total, and will reach half a billion users at year's end.

'Game Changer'

"The cloud is a game changer in an age of near-ubiquitous mobile broadband, offering benefits to consumers and cloud service providers alike," said Jagdish Rebello, director for consumer and communications at IHS, in a statement.

Consumers use cloud servers -- so named because a chart of entry points to the central system resembles a billowy cumulus -- not only to store their own documents and photos but also to increase the capacity of phones, tablets and other mobile devices by keeping media there. Another benefit is that the content can be accessed on numerous devices, and users avoid creating multiple versions of the same document.

The latest version of iCloud in Apple's iOS 6 syncs open browser tabs on an account members' devices for easy switching.

Many services offer a "freemium" account of two to five gigabytes, and a paid service for heavy data users or businesses.

Widespread consumer cloud service began to take off in 2011, but there are no hard numbers for subscriptions for that year, iSuppli said, estimating that they reached 150 million. Next year's expected total is 625 million, then doubling over the next four years.

"It isn't surprising that cloud storage is taking off," said Charles King, principal analyst at Pund-IT. "It's actually been one of the best simple use cases for cloud for some time."

But he said it isn't likely to put SanDisk or similar storage makers out of business any time soon.

Storage Wars

"So far, it hasn't seemed to have any overt negative impact on storage device/appliance makers, and I doubt it will for some time to come," King told us. "Most people simply prefer to keep their data stored locally."

The growth of the cloud suggests consumers are largely unconcerned about losing data or having it compromised as they place their trust in technology giants or smaller companies like Mozy.

King advises caution.

"I do think folks need to keep the limitations of these offerings in mind before they jump in wholeheartedly," he said. "Overall, I suggest that businesses and consumers interested in cloud storage should consider such a service to be like a back-up data center -- a good safety precaution but not a primary storage source. That should continue to reside locally."

The growth of the cloud could also affect phone and tablet manufacturers such as Apple and rival Samsung. Why make devices with variable storage capacity up to 64 GB or higher if people can keep their onboard data to a minimum?

But King said it will be some time before smaller capacity and paid cloud storage becomes a viable business model.

"Remember that one key complaint about the iPad and some other tablets has been the lack of a USB port for easy access to external storage devices," King said. "You can understand why the vendors want to build new revenue streams/opportunities around cloud storage, but it doesn't seem that users are entirely convinced."

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