Ten years from now, I believe that clouds will be evaluated based on three generic criteria: transactions, user experience and presence. And as with any active market, it’s a safe bet that there will be plenty of companies that best showcase each of them. But which of them will own the cloud?

In 10 years, which company will own the cloud computing space? That question has been the subject of long and contentious funding debates over the past year, especially here on Sand Hill Road. And while I know that predicting the future is an inaccurate science, I think that when it comes to evaluating this nascent industry, the VC community has been focusing on the wrong criteria.

Today, cloud computing offerings are application-specific frameworks that are run by companies both large and small. Google’s App Engine is a cloud for running Python applications; EngineYard is a cloud for Ruby-on-Rails; Amazon’s EC2 and S3 provide generic compute and storage clouds, and so forth. While each of these companies addresses a vertical market need, I believe that by 2018, clouds will instead be evaluated based on three generic criteria: transactions, user experience and presence. And as with any active market, it’s a safe bet that there will be plenty of companies that best showcase each of them. One of the emerging trends in cloud computing is providing infrastructure that allows businesses to perform transactions. Two companies that immediately come to mind are eBay and Amazon; both have significant infrastructure expertise and business divisions devoted to processing their customers’ transactions. Amazon in particular just launched Checkout, which facilitates highly scalable transaction services. Imagine if over the next 10 years these companies find a way to bring their scale and transaction expertise to a cloud offering across multiple industries and market segments.

What will become increasingly critical is providing cloud consumers with a spectacular user experience, something nobody does better than Apple. While I realize the company is not strictly focused on cloud computing today, imagine a scenario in which it leverages the success and elegance of iTunes — essentially a cloud for selling digital media — to other markets. I can foresee a cloud computing environment where Apple allows users to build applications using their user interface templates and designs; every application developer that strives to make their application “as sexy as iTunes” could leverage this infrastructure. A current example of Apple’s approach can be found in its new MobileMe cloud, which emphasizes ease-of-use and user experience for keeping email, calendar and contacts synchronized. Elsewhere, Google Gears and Microsoft Live Mesh are also attempting to be environments in which users develop cloud applications, but they don’t seem to have the same focus on consistency of user experience.

Speaking of Microsoft, when it comes to presence in the computing space, they have an enviable position. With their software presence on the PC, mobile phone, game console, media center and even autos, they’re set up to be everywhere for at least the next decade. And the Redmond giant has recently changed its PR to emphasize software and services, which leads me to think that they’re moving to offer a wealth of cloud-based services.

The key will be leveraging their almost ubiquitous presence across nearly every aspect of the computing space to convert their hordes of desktop and IT application developers to work on their cloud in order to come up with future services for the same markets. If Microsoft can execute on this strategy, use their presence and motivate their developers, they will be a significant player in the cloud computing market in 2018.

It seems clear that the dominant cloud computing company in 2018 will be able to process transactions on the scale of Amazon and eBay, have the eye-popping user experience of Apple and the presence of Microsoft. Which cloud company do you think it will be?

Fellow GigaOM writer Alistair Croll contributed heavily to this post.

  1. Those who own the user experience will control the cloud. In 2018 the majority will be accessing the internet through mobile devices or thin clients. Companies that understand this transition to a network centric computing environment will prosper. “The Cloud is the Computer”

  2. I think Apple has a great chance in the cloud area. Add a few apps to MobileMe and they’re underway.

  3. Who will control the server farm? Google.

  4. @Reuven – I like your thinking. More on thin clients to come (watch this space :)

    @Partners in Grime – Agreed. The war has not even begun here.

    @geo – Are you sure? There are a LOT of Microsoft developers out there – given the chance to keep their code and migrate it to a .NET cloud could be tempting….

  5. Khazret Sapenov Thursday, July 31, 2008

    Article title contradicts common sense (imo) – there can’t be ONE cloud, whatever end user experience it delivers. Look around, we don’t have one bank/car maker/tv channel, who owns financial market etc (see how many alternatives to iPod exists out there).

    User experience is just part of equation, also there are huge market segments (in terms of financial attractiveness), where other factors are crucial to cloud adoption. Sometimes economists call it “white spot” markets, that give you temporal advance (several years before others discover this niche).

    So title should be re-phrased as “It’s 2018: Who owns retail/end user access to Clouds ?”

    Several minor things:

    MobileMe is referred as cloud, while it is only as Service yet (smells like an order from Apple to promote the service under popular lable).

    Evolution of computing walks randomly between Centralized/Decentralized concepts, it might be either of them by 2018 with equal probability.

    Cloud offerings will be affected by those companies, who reserve access to cheaper sources of energy.

    Khazret Sapenov

  6. [...] only exists when a packet is a packet and a datagram and datagram. Lets hope THAT continues. [From It’s 2018: Who Owns the Cloud? - GigaOM] You can skip to the end and leave a response. Pinging is currently not [...]

  7. With the amount of money being invested by the tech giants (i.e. Microsoft, IBM, HP, Google, Amazon, Yahoo) I don’t think that we’ll see a single company emerge with dominate market share in cloud computing space. At least not at the infrastructure level. As the datacenter/hardware arms race heats up, we’ll end up with an enormous global cloud capacity that we be useful and valuable to different market segments (i.e. consumer, small business, enterprise).

    The user experience will play a major role in what web applications and services people use, but the underlying cloud computing power behind those services could easily be provided by several of the major cloud computing providers. My prediction for 2018 is that no single company will have more than 50% market share in cloud computing and at least one of the top 3 competitors will be based in China or India.

  8. Nobody. Because we won’t need it. In 2012, Photon Belt will be arrived to the earth and Photon Age will start. Mankind will transform to the galactic humans and will use their brains for everything even for instant messaging. Just kidding :)

  9. The users themselves will own the cloud, and the providers who know how to keep them happy will profit in the process.

    @geo: who said there will even be a server farm in 10 years? Perhaps there will only be a market for 5 computers (each with thousands of cores)? Conversely, perhaps computing will be distributed between powerful end user devices (maybe your neighbour’s otherwise idle computer will end up filtering your email)? Don’t assume that the infrastructure of tomorrow will look like that of today – when Google started out vertical scalability was all the rage and look where we are now…

  10. Given that the user experience tops all other factors, i would like to add that the cloud appeal for developers could be a close second.

    The transactions and UI templates you speak of are but ‘come-ons’ for developers – both up tail and especially long-tail, designed to entice as many as there are to adopt their cloud versions as the one that provides not just the best deployment environment but one which the developer doesn’t feel in any way threatened should the rug be pulled from under them without warning (lock-in). And with that kind of comfort, real innovations thrive.

    Open source, language-agnostic, deploy and forget solutions (plus proven UI templates, built-in transaction infrastructure, control panel, ++) is the kind of cloud that would have a distinct advantage of making it. Other than that, cost and ‘up time’ reputation, there’s the additional renewable energy source aspect that might just be the x factor to sway the market.



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