Cloud Demand Skyrockets Past Forecasts
October 16, 2012

Skyrocketing Demand For Cloud Services Exceed 2012 Forecasts

redOrbit Staff & Wire Reports - Your Universe Online

Consumers are “aggressively” migrating their data to cloud storage, with the number of subscriptions to online storage services set to soar this year, according to a new report from market research firm IHS iSuppli.

Worldwide, the number of subscriptions for paid and free online storage services have already reached 375 million for the first half of 2012, exceeding previous projections.

IHS now predicts that figure will reach 500 million by the end of this year, and grow to an estimated 625 million in 2013 and 1.3 billion by 2017.

“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.

Cloud storage services give people the ability to manage and store their own personal data, as well as purchased content such as music, ebooks and videos. This data can then be accessed and synced across multiple devices -- smartphones, tablets and PCs.

“Technology companies are looking at the cloud as a way to generate revenue,” said Rebello.

Tech heavyweights such as Apple, Microsoft, Google and Amazon are already leveraging their own cloud offerings to sell hardware, content and other cloud storage services. These services often cost the same, or in some cases less, than comparable offerings from pure-play cloud storage providers like Dropbox, Mozy, Carbonite and SugarSync, IHS said.

Some pure-play providers have responded by turning to a “freemium” model, in which 2 to 5 Gigabytes of cloud storage is included at no cost to the consumer, with higher-priced, tiered plans offered that allow greater levels of storage.

But IHS predicts that some independent cloud-based storage firms will struggle to remain financially viable due to the high costs of providing these services.

This would give mobile network operators an “attractive opportunity to partner with the pure-play providers and to offer differentiated services,” IHS said.

Such partnerships would give mobile providers a new source of revenue, and could even help reduce customer churn, since consumers who signup for cloud services tend to stick to their provider.

“Users with large amounts of data stored on an operator´s cloud service are likely to be reluctant to migrate their content to another operator´s cloud service at the end of a contract period because of the hassle involved, so the cloud can be effectively leveraged as a tool to retain customer loyalty,” IHS said.

Ultimately, mobile service providers that offer a personal service, with support for a wide variety of diverse mobile devices and computers on their network, will be the ones who come out on top. With such enormous revenue growth at stake, the battle is expected to be fiercely competitive.