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Monday, 13 June 2011

iCloud: Is this the end of the road for hard drives?

Probably one of the biggest announcements at Apple's Worldwide Developer Conference (WWDC) last week was the launch of iCloud, Apple's cloud-based data service.

With iCloud, you can store your pictures, documents, calendar, to-do lists and your music, which can then be shared across a variety of devices.  This is very exciting indeed but what does this mean for data storage at the consumer level?  In what ended up being a slightly longer analysis than I first anticipated, I analyze some thoughts I have on storage in general in the cloud era.

The Need for Storage

Brands like Acer & Samsung will be rolling out
cloud-based Chromebooks soon. 
Chances are, you may not need to buy a device with as much capacity if you start getting more dependent on the cloud.  This is what Google has been a proponent of with the Google Chrome devices that they've been showing till now (and which recently has started going on sale in the US).  That means, the iPhone family may not move beyond 32GB for example or the iPad's may not move beyond 64GB capacity.  In fact, you could possibly the smaller capacities become more popular again as data storage won't be an issue anymore.

On personal laptops or home computing, this may also mean you don't need to a 1TB or 2TB hard disk or you may not have to run out to buy a new external hard disk when you're out of space or to back up your data.

Cloudy in the UAE?

Looking at the concept of cloud computing at a local level, the adoption of cloud computing here is dependent largely on cloud services being fully available here.  Till date, Apple's iTunes service is only restricted to Apps.  Whether iCloud will be rolled out here is something we don't know yet and if so, will it support the storage of your music content is something we also don't know as Apple doesn't sell music through iTunes in this region.  The same goes with other cloud based services such as Amazon's cloud service, which is largely restricted to those in North America.
Yandex is the most popular search engine company in Russia.

Within this region, the only services that are really available as cloud services for storing all your data would be Dropbox and possibly Google's suite of products.  Does it make sense commercially to launch a cloud based service within the region or the UAE?  Possibly, if they can offer a service experience that matches what those internationally get.  There are cases where local providers do better than the international giants at times.  For example, Yandex rules the search engine market in Russia and Baidu does the same in China, which could mean that those companies could end up dominating the cloud computing market in their respective countries and not stalwarts like Apple or Google.

What happens to storage manufacturers?

While this may on the surface of it not be good news for memory and hard disk manufacturers like Seagate, Western Digital, Samsung, Sandisk or Lexar, it could also be a blessing for them.  The memory industry has been extremely volatile for years now as they've been constantly investing in new facilities and R&D with prices constantly fluctuating.  The number of hard disk manufacturers has been shrinking year on year as more and more consolidation has been happening.

In fact, one senior executive from a flash memory brand which I spoke to this week was quite excited by the growth of cloud computing as he felt it would bring SSD's (solid state drives) to the forefront finally. SSD's, are basically flash-memory based hard disks but unlike conventional hard disks that you find in your average laptop or desktop computer, there are no moving parts in them (remember the noise you hear when you hear the hard disk spinning away).  SSD's use the same technology that you'd find typically in the memory card slot of your camera, smartphone or USB flash drive.
Image courtesy: Engadget.com

SSD's till now though have been an expensive technology as compared to conventional hard disks as they're much more expensive per GB than a hard disk would be.  However, the delta is only bound to reduce as we move forward and cloud computing could be when SSD's really rise.  SSD's are more reliable typically and don't require air-conditioning as there is heat generated by them as there would be in the case of a spinning hard disk.  This means they should in theory be more suited for the huge data centres that companies like Apple, Google or Amazon will rely on as it would mean much lower energy costs for them if they can save on air-conditioning these big data centres.

On consumer products, flash memory has already carved out its nice in portable devices and will most likely move next in a bag way onto netbooks and notebooks.

The fact is, most manufacturers of hard disks probably lose money on consumer hard disks due to the high distribution costs involved.  Selling to device manufacturers is probably better for them as it cuts out huge selling and distribution expenses.

Supersize Me or Mini Me?

Now if you consider that if an Apple for example decides they'd standardize on 16, 32 and 64GB for the iPad, then there would be little pressure to push R&D budgets for higher capacities at the consumer level.  At the same time, the increased number of data centres widens a market for these same manufacturers.  One storage vendor I spoke to said this would most likely not be the case and you would still see the capacity wars continue but I still have to wonder if it'll happen at the same rate.  Sticking to the same capacity for a longer period means lower investment costs when upgrading factories to produce higher capacity storage devices and at a time when many storage brands have struggled, this may be a welcome break.

However, what I found most interesting is that the people calling the shots in the storage game are not the people controlling it anymore.  Till now, every time a new version of Windows or MS Office came out, it was typically a case that a bigger hard disk, more RAM and a more powerful processor was required.  This was always good news for component makers as it meant it was time for consumers to either upgrade or replace their products.

Now though, Microsoft seems far from being the one to dictate this.  The role of Apple in the flash memory storage business can't be spoken of enough since they came out with their flash memory based iPod.  With the way we use and store data changing so rapidly, it'll be interesting to see moving forward how much of an influence Microsoft has when they eventually roll out Windows 8 next year.  Will their be any sort of spike for the storage vendors or will it just be another day at the office for them?

Concluding Remarks

There are a few things we don't know about how a certain technology takes off but one thing we do tend to see is that when Apple endorses or promotes it, it normally goes through the roof (with the exception of probably Apple TV).  Cloud computing is going to take centre stage in the latter part of this year and that seems inevitable.  

Most of us today are dependent on a cloud, whether we know it or not, whether it be for checking our e-mail (like Gmail, Yahoo or Hotmail), using a social media network (like Facebook or Twitter) or even writing a blog, if you are a blogger.  The fact is, till now, we've been heavily dependent on storing everything on a multitude of devices.  Going forward, we will still own that same multitude of devices, that'll have system of instantly replicating your data across all those devices through either accessing it real time off a cloud service or synchronizing it with data on a cloud.

Hard disks and flash memory storage aren't going anywhere but where and how we use them will most definitely change.  This could mean that there is more standardization where possibly, selling based on capacity is no longer a selling point, but rather a salient feature within a product.  The hard disk could become like any other component inside your computer or device.  You know its there, you know its needed but beyond that, you don't think more about it.

Posted By: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics