Apple's storage strategy: Clear, not cloudy

It's all about selling more iPhones, more iPads, more Macs, not beating Dropbox

Apple has no plan to broadly compete in the online storage market, its recently-unveiled iCloud enhancements and new features notwithstanding, an analyst argued today.

Instead, the moves -- long called for by pundits and advanced users -- are simply more of the same in Apple's long-standing strategy to build a better experience on its own devices so it sells more hardware, said Jan Dawson, chief analyst at Jackdaw Research.

"[The idea] is to add value to their own ecosystem," said Dawson.

Others agreed. "Everything Apple does is about selling more devices," Benedict Arnold, an analyst with venture capital firm Andreessen Horowitz, echoed on his blog last week about Apple's WWDC announcements, particularly those related to iCloud.

Those opinions were contrary to how others saw last week's announcements of iCloud Drive, price cuts to additional iCloud storage and access to files on both iOS and OS X.

During the June 2 keynote at its annual developers conference, Apple said that iOS 8 and OS X Yosemite -- both slated for a fall launch -- would be accompanied by significant changes to iCloud for end users and developers alike.

iCloud Drive received much of the follow-up attention. Seen by some as a return of iDisk, the online file hosting service discontinued in mid-2012, iCloud Drive will let iOS 8 and Yosemite users store files in the ether; allow system-wide access to documents on iOS, liberating those once held in app-specific silos; and store all photographs and videos automatically for sharing and access from any Apple device.

iCloud will also serve as the synchronization backend for "Handoff," one of the elements in the new "Continuity" initiative that also features text and phone call forwarding between the iPhone one on hand, and the iPad and Mac on the other.

Many observers couched the iCloud Drive revelations as Apple finally "getting" the cloud, and a sign that Apple would go head-to-head with the likes of Dropbox and Box, Google, Amazon and Microsoft in storage. But even as they staked out those positions, they bemoaned iCloud Drive's lack of cross-platform support -- particularly its shunning of Android -- citing that as another example of Cupertino's lack of online smarts because without said support its effort is doomed to be an also-ran.

Dawson saw similar complaints about Apple's messaging strategy in much the same way: As missing the point. "Apple has never been about creating cross-platform services," Dawson wrote in a post-WWDC blog Thursday. "[iTunes and iMessage are] both products ... [that] Apple developed to add more value to its hardware products, and should not be seen as products in their own right."

Ditto with iCloud Drive.

What's thrown off some analyses is iCloud Drive's support for Windows. But rather than view that as a step toward cross-platform, it should be seen as a concession to Windows dominance in the enterprise, a market Apple has explicitly targeted.

"The only difference in [the iCloud Drive strategy] is that in the business market Apple is a bit more of a realist," said Dawson in an interview. "In the business environment, the vast majority of customers have Windows devices. To collaborate on documents within the enterprise, iCloud Drive had to support Windows."

During the WWDC keynote, Craig Federighi, the Apple executive who dominated stage time, talked about the iPhone, Apple and the enterprise, touching on new iOS 8 features for business rather than taking the company's usual tack of limiting itself to rattling off statistics about Fortune 500 penetration. That was a signal, Dawson said, just as was iCloud Drive's Windows support, of an Apple push to take the iPhone and iPad to the next level in business.

Calling the iPhone Apple's "spearhead" into the enterprise, Dawson argued that while Apple has been slowly adding business-centric features to iOS, it saw the need to do more. "[iCloud Drive] is not the same as if they launched a native version of iWork for Windows," which he said Apple would not do, "and it's not something that they'll advertise. But what they're doing is with the enterprise in mind."

The significant price reductions in additional iCloud storage, which Apple announced last week but may not implement until this fall, are also part of the same umbrella strategy: Make Apple devices more appealing. Those prices are neither the lowest nor the highest of rival services.

Not surprisingly, it's not Apple's intent to compete with the lowest-priced alternatives. It will not cut customers a deal and bundle larger free allowances with its devices, much less give unlimited storage away for free, as some have suggested.

Nor will it expect iCloud Drive to create a major new revenue stream. "I don't think it's about making money at all," said Dawson. Instead, Apple will charge for iCloud Drive beyond the 5GB free allotment to create what he called a "mental commitment" to the service. "It's more a psychological effect. Think of Amazon Prime. Because I'm already paying for it, I may as well buy from Amazon because I get free shipping. So I commit to it emotionally."

The changes to iCloud seem aimed at advanced users, those who are typically the most vocal, online and off, but who do not necessarily reflect the thoughts of a majority of Apple's customers. "iCloud has really felt more for the casual rather than power user, and Apple has been beaten up because of that. It's always seemed sort of a 'lite' version of what it should be," Dawson observed.

But to gauge Apple's success in the cloud with a check box comparison against competitors is simply wrong thinking, according to Dawson.

"To suggest that Apple needs to make ... any product cross-platform in order to succeed is to get things exactly backwards," Dawson wrote last week on his blog. "Apple doesn't make hardware to be successful in [say] messaging; it makes a messaging product to be successful in hardware. Apple isn't fighting the messaging [or cloud] war. To the extent it's fighting a war at all, it's fighting an ecosystem war, and so far it's winning."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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