Enterprise storage will always be in demand, but it's just not enough for sector sultan EMC (NYSE: EMC ) . To combat the growth doldrums over the next few years, EMC has been on a spending spree in cloud computing lately.
Hey! You! Get on my cloud!
Last week, the company signed the papers to acquire tiny Pi Corp., which has been working on a platform for collecting personal information from disparate sources, and then making it all available anywhere you might need it. Last October, Web-centric backup service Mozy walked into the EMC fold. Each of these deals gives EMC another piece of the cloud-computing puzzle; eventually, anything you run on a desktop computer today could become an online service tomorrow, streaming across a company intranet or the broader Internet.
EMC is nibbling away at the storage-related end of the service spectrum, which of course fits eminently with its core competency. Amazon.com (Nasdaq: AMZN ) is moving in the same space with its S3 clustered storage service, but it extends from there into wholesale business platforms like the Elastic Compute Cloud, SimpleDB, and Mechanical Turk. It looks like Amazon wants to be the entire platform on which others build their Web-based businesses.
Lost in the clouds
And the roll call doesn't stop there. There's the Google (Nasdaq: GOOG ) Apps office software suite, along with rumors of a Google online storage service, too. Yahoo! (Nasdaq: YHOO ) has its own Web services; they don't go as far as Amazon or Google into the infrastructure of an online business, but they do give developers plenty of tools and examples that can help in gathering and disseminating information in various ways.
Cisco (Nasdaq: CSCO ) is inserting its routers into the information-crunching chain, and Microsoft (Nasdaq: MSFT ) Live is an ambivalent giant dipping its toe into the waters that might kill its old mainline businesses of operating systems and office-productivity software. Likewise for Apple's (Nasdaq: AAPL ) .Mac platform, although it has a more consumer-oriented focus. And the list goes on, and on, and on ...
Silver cloud, dark lining
I think it's high time that we take the cloud seriously, and figure out who wins and loses in this paradigm shift.
This isn't just some piddly Web 2.0 trend. It's a long-term, wholesale move from local hardware to online computing clouds that can handle nearly any real computing task imaginable. All of the companies we've looked at are bellwethers and leaders in their respective sectors, and all bring a slightly different vision of what cloud computing can do for you and them alike. It's here. It's real. And it's only going to grow.
Microsoft will eventually feel the squeeze from the cloud crowd, and be forced to embrace the architecture or fade into obscurity. That point is still many years away, of course, but it's worth keeping in mind the next time you see Mr. Softy do something that doesn't make good business sense for the incumbent desktop software leader.
EMC should parlay its brand name into a powerhouse online storage portfolio, then settle comfortably into that niche of a niche. Cisco must battle it out in the data center, since some of its competitors are coming up with their own "smart" routers in hopes of stealing some of that action. But again, a current leader with much industry respect should do very well.
It's harder to tell where the average consumer will turn. You can already buy an off-the-shelf laptop with a Google-centric operating environment, conspicuously dubbed "gOS," on the Everex CloudBook. If that name doesn't say it all, I don't know what will. The iPhone could also evolve in that direction, and the revamped Apple TV could move that way, too. It'll be a cagematch to the pain between the two high-tech honchos, and more competition could pop up at any time.
Fluffy final Foolishness
Feel free to ignore these small-time deals, like EMC's recent purchases, for the time being. Their contributions will be immaterial for a while. But you need to read up on what cloud computing is, what it can do, and which companies can ride that wave to great riches in the near future. If you stand pat for too long, the ship to Cloud 9 will sail without you.
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