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What’s ‘In Store’ for Personal Clouds in 2015 (pun intended)?

As CES kicks off 2015, now is a great time to take stock of what personal clouds portend for the year. Consider a few key things that may impact consumer use of personal clouds:

• a one terabyte (Tb) disk drive (1024 Gbs) now costs about $50 retail; these drives are generally plug-and-play and easy-to-use with PCs

• contrast this to the price of one Tb of personal cloud storage e.g. Microsoft OneDrive costs $7/month and Dropbox or Google Drive (GDrive) charge $10/month (services offer other price points and some include features beyond storage)

• with the growing trend of streaming movies, TV shows and music rather than purchasing it, this reduces the need to store and access this type of content in personal clouds

• at CES, the big themes include the Internet of Things (IoT), wearables and connected cars, all of which require access and/or storage of consumer digital content

Before delving into personal cloud developments, let’s review consumer use of personal clouds to date.

A recent Funambol analysis of personal cloud storage reveals that the vast majority of consumers currently use less than one Tb – in most cases, considerably less. This excludes PC backups which are a different beast. This cloud storage use is not surprising as the vast majority of people store user-generated content such as contacts, pictures, personal videos and selected documents which by-and-large, do not require much space (professional and hobbyist photographers aside). It also takes time for people to fill up their clouds. A related part of the analysis shows that the vast majority of users do steadily use more personal cloud storage over time.

To put personal cloud storage use into perspective, if you purchase a one Tb disk drive, that equals the cost of 5 months of Dropbox/GDrive or 7 months of OneDrive. If a one Tb hard drive lasts 5 years, that equals 83 cents per Tb or .083 cents (less than a tenth of a cent) per Gb per month. Compare this to 4 cents per month for a Gb on Amazon AWS or the above monthly rates for a Tb of those personal clouds.

Three things are apparent from this:

1) it is an order of magnitude cheaper to buy a one Tb drive than pay for a personal cloud service;
2) personal cloud storage services are profitable at their prices – especially as the vast majority of people use a fraction of their cloud storage quota – so they are unlikely to disappear;
3) despite it being much cheaper to buy storage than rent, there must be compelling reasons why many people pay a premium for personal cloud storage.

Given the cost difference, why DO people pay to store digital stuff in the cloud? The reasons include:

• Always on. A personal cloud is always supposed to be there and should be easy to use with all of your devices. In contrast, a physical drive is typically easiest to use with one device in one location

• Ubiquitous access. Although a one Tb hard drive can fit in a pocket or purse, few consumers tote them around. The cloud, on the other hand, is everywhere there is connectivity

• Ease-of-use. With personal cloud services, there is no need to deal with physical devices or real-world constraints. As someone who worked in this industry said, a product that requires consumers to act as quasi-IT people is rarely scalable when there are simpler options

• Peace-of-mind. While personal clouds are generally not for PC backup, for many people, they do act as a lightweight backup. Although few people ‘restore everything’ from a personal cloud to a device, one’s recent contacts, pictures, files and more, on smartphones, computers and tablets, can often be found in a personal cloud, such that if a device is lost, the content is available. It’s not a full backup but for most people, it’s good enough and better than the alternative

• Continuous multi-device storage. A big disk for PC backup does not help most people protect the digital content they access daily on non-PCs. Many personal clouds are ‘set-it-and-forget-it’ for multiple devices i.e. they operate in the background, constantly saving updated content

• Shared access. Another capability of personal clouds versus a hard drive is that its content, while remaining private, can be selectively shared with other people in various ways. Think of it as a modern photo album, except for any type of digital content that can be accessed by anyone with an internet connection and permission

For these reasons and others, personal clouds have grown exponentially worldwide, both in the number of users as well as storage used. Although some obstacles remain, such as privacy concerns and lack of understanding, in many places, personal cloud use has evolved from early adopters to the mainstream. Every day, people are finding new and creative ways to leverage personal clouds, which is a hallmark of a technology embraced by consumers.

Given this context, what are the big developments in personal clouds that are likely this year? Major advances include:

• One-stop clouds. Most personal clouds today support one ecosystem e.g. OneDrive is centered around Microsoft, GDrive on Google, iCloud on Apple. This is not user-friendly as the vast majority of people use more than one ecosystem and want to avoid lock-in. A major trend in 2015 will be the rise of personal clouds that are a ‘one-stop shop’ for important personal data and content, while still providing flexibility to use your preferred devices and services in a natural way

• Additional data and content. In 2015, other types of personal data will start to reside in your cloud. This is likely to include health information from wearables, financial statements from banks and medical information from healthcare providers. Of course, this requires consumer opt-in. But the key is centralizing important digital data in one place, to make it available in a convenient way, especially on mobile devices

• Family clouds. This year, individual clouds will morph to include family members and close friends. They will not replace other social networks but rather, this puts a family context around important digital assets. We often refer to this as a virtual refrigerator door that families use for photos and other keepsake family items, such as shopping lists, soccer schedules and report cards

• TVs and cars. As the Internet of Things gradually becomes real, two low hanging fruit areas for personal clouds are accessing cloud-based pictures and personal videos on TVs and in cars – look for automated and simplified connections between these and personal clouds

• Advances in privacy and security. Leading personal clouds take continuous steps to ensure user privacy. Service providers will continue to strive to minimize incidents and provide stronger security and deeper privacy

• Ecosystem integration. While personal clouds will support multiple ecosystems, they will also more tightly integrate with popular consumer ecosystems and services. The goal is to make personal clouds more useful by making usage and access more transparent

• Ease-of-use. There will be continuing efforts to make personal clouds even easier for less-technical people such as novice and casual users

The sum of these advances is that in 2015, personal clouds will evolve to become much more than generic cloud file storage. Our company believes that personal clouds are really about helping people simplify their mobile lives, and we expect this to happen in a big way this year.

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