It’s not news when a noted venture capitalist says Apple doesn’t get the cloud because Apple doesn’t offer cloud services the way Google, Microsoft, Amazon and others do.
What is the cloud? What is it Apple doesn’t get? Why is Apple’s cloud service so much different? How did Apple become one of the largest cloud users in the world?
Send In The Cloud Clowns
Fred Wilson is a rich man but just because he’s rich doesn’t mean everyone should listen to what he says. Why not? He’s wrong very often.
Despite making a fortune betting on a few winners like Twitter and Tumblr, neither of which make money, but both of which made people rich with stock valuations, Wilson joins the chorus of ‘Apple doesn’t get the cloud.’
What is the cloud?
Google, Microsoft, Amazon, Dropbox, and many, many other companies have so-called cloud services and are betting billions of dollars that cloud computing is the future of computing.
The common view is that Apple’s iCloud is Apple’s entry into cloud computing, and an anemic one at that. iCloud isn’t Apple’s first or largest cloud service.
Cloud computing involves distributed computing over a network, where a program or application may run on many connected computers at the same time. It specifically refers to a computing hardware machine or group of computing hardware machines commonly referred as a server connected through a communication network such as the Internet, an intranet, a local area network (LAN) or wide area network (WAN).
That’s a lot of mumbo jumbo which describes a variety of online services, including everything from Google’s search engine to Amazon’s S3 service to Microsoft’s OneDrive storage to Dropbox and the many lookalikes.
It also describes iTunes, which is the cornerstone of Apple’s cloud services, and it seems to have worked out well for the Cupertino gadget maker. Only Amazon has a larger online presence than Apple. And, unlike Amazon, Apple actually makes a profit.
Product? Or, Feature?
A few years ago, back when Steve Jobs was still Apple’s CEO, Dropbox was considered a possible acquisition. Why? Dropbox is a well done cloud service. It works well, it integrates well, it scales well.
But is Dropbox a product; a sustainable service business? Or, is it, as Jobs suggested, merely a feature?
Here’s my rule of thumb on feature vs. product. I pay money for a product and then use it. For a feature, I simply use it. I use both iCloud and Dropbox and I do not pay (directly) for either one. I’m not alone in that, either.
Apple doesn’t worry that I don’t use iCloud enough to pay them more money for more storage. Dropbox should worry that more people don’t pay them money to use their service. I’ll pay money for a product, but not so much for a feature.
Business? Or, Goose Chase?
Beyond Apple’s obvious history of disrupting multiple industries with a line of much desired products, Apple also does something many tech companies do not. It makes a profit. Go up and down Apple’s product line. Mac, iPod, iPhone, iPad, iTunes, Apple TV, both App Stores.
One and all, they make enormous sums of money for Apple.
Now, look at the popular cloud services that have been around a few years? Google Drive, Microsoft OneDrive, Dropbox, Box, Amazon S3, and many also rans and copycats. Which ones make the sums of money Apple prefers?
Apple may not see the cloud the same way as the herd mentality on Wall Street or in Silicon Valley, but there’s little doubt that Apple truly gets the cloud, and while other criticize the iCloud purveyor, Apple laughs all the way to the bank, while everyone else chases the proverbial wild goose.