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Cloud storage

Cloud storage has changed the way we use computers and data.

Thanks to the cloud you can breathe easier. Your files are safe, even if something terrible happens to your computer, phone or tablet.

You can have near-instant access to any of your files from almost everywhere.

There’s a chance you already have cloud storage. Limited free services are part of the deal when you buy an Apple computer or Microsoft Office 365. You also get free cloud storage if you use Gmail or Google Docs.

Free storage is good, yet it’s worth paying extra. That way you can get the cloud storage plan that best suits your needs. When you pay, you get more storage. You may also get more features and tools or extra security. In some cases paying means you can not only store more data, but also store larger files. You may also be able to share them with friends or colleagues.

Most, but not all, cloud storage services double as syncing services.

Microsoft OneDrive

OneDrive is the default cloud services for Microsoft Windows 10. It integrates well with the operating system. It also works well with Office.

If you’re a Microsoft 365 customer you get 1TB of OneDrive storage with your account. If not, Microsoft’s 50GB Basic plan costs US$24 a year.

Microsoft offers a comprehensive set of cloud tools and apps. This includes web versions of Office apps like Word and Excel. In practice OneDrive seems to be slower at syncing than the other options listed here. While there are apps for iOS and MacOS, the integration isn’t always smooth.

Apple iCloud

Apple customers often use iCloud in a different way to how Microsoft owners use OneDrive. iCloud is more about syncing between devices than simple storage. Although it does that too.

If you own Apple hardware and use Microsoft software you may end up using both services.

There is a 5GB free tier. The 20GB for US$12-a-year plan gives you 50GB. The price of the 200GB plan is US$36 a year while a terabyte of cloud storage costs US$120.

iCloud is a must for Apple users. You only get one 5GB allocation even if you have many devices. If you have a Mac, iPhone and iPad you may find it isn’t enough. Windows users can sign for any iCloud plan.

iCloud can be confusing at times. Apple designed it to work with Apple apps. That is still where it shines the most. Even so, it is easy to install on Windows computers and there is a great web interface.

Google Drive

There’s more to Google Drive than cloud storage and sync. You could say the same about OneDrive and iCloud. Those services complement Microsoft software and Apple hardware offerings.

Drive goes further. It is a key part of Google’s collaborative online office suite. The emphasis is less on backing up your phone or PC docs than replacing them in the cloud.

Google Drive’s 15GB is generous compared to the other cloud storage services. Yet it is not as generous as it first looks. The allowance includes mail messages and images stored with Google Photos.

Some find Google Drive harder to navigate than OneDrive. Of the three big services, it is the least geared towards conventional back up. In practice backup works well enough.

Dropbox

Dropbox is the independent alternative personal cloud service. You get less storage for free, but it’s independence means flexibility. It is also a great way to share files with others.

 

Personal cloud storage services compared
ServiceWhat you get for freeStoragePrice
Apple iCloud5GB50GB$12
200GB$36
1TB$120
Microsoft OneDrive5GB50GB$24
Office 365 Home 1TB is included$80
Google Drive15GB 100GB$20
Storage shared between 1TB$100
Drive, Gmail, Google+ and Google Photos10TB$1200
20TB$2400
30TB$3600
Dropbox2GB1TB$120
Box10GB100GB$138
Unlimited$204
Mega50GB200GB$65
500GB$130
2TB$260
4TB$390
All prices in US dollars, annualised and .99 prices rounded up

At ZDNet Ed Bott reports:

A little over a year ago, Microsoft announced with great fanfare that all Office 365 subscribers would get ‘unlimited’ OneDrive storage. Tonight, months after an executive shakeup, the company says it has no intention of keeping those promises.

Source: Microsoft reneges on ‘unlimited’ OneDrive storage promise for Office 365 subscribers | ZDNet

Microsoft isn’t the first company to panic when customers take the word unlimited at face value.

Bott reports the company is blaming its change of heart on “a few greedy users”. If that was true, Microsoft could deal with the problem head on. It could include a reasonable use clause in its terms and conditions. Then, Microsoft could move on the “greedy users” warning them to go easy, cutting their access if they don’t.

Instead, it reverted to its bad Microsoft personality and broke the earlier promise. It also reduced the free OneDrive storage from 15GB to 5GB. If you buy the “few greedy users” line, this means punishing all users for the actions of a minority.

Clouds  in my cloud storage

My feeling is that the “few greedy users” have little to do with the decision. It links to Microsoft now having a better understanding of cloud computing and where it will and will not find future revenue. Cloud storage may be profitable, unlimited cloud storage less so.

There have been howls of outrage from across the internet in response. Many users accuse Microsoft of bait and switch tactics. It’s possible the company will run into problems with consumer law in some countries where officials frown on bait and switch.

Microsoft’s critics will tell you this is all par for the course. That old-style monopoly thinking still lies beneath the more up-to-date rhetoric. I don’t buy that. Today’s Microsoft is different. It gets 2015 computing. The problem is that like everyone other than Apple and Amazon it struggles to tease out the best profit opportunities.

The scary aspect of Microsoft’s change of heart is how vulnerable cloud customers are when decisions are made by someone clicking a cell on an Excel spreadsheet 10,000 kilometres away. Who do you get on the phone to complain to?

Anyone who made plans based on unlimited OneDrive storage or even on 15GB of free storage will have to think again.

Twilight of the gods

At heart, Dell and EMC are hardware companies. They face a serious problem: customers have lost interest in hardware.

On October 12 Dell said it will pay US$67 billion for EMC. It’s the biggest technology deal ever and the latest in a never-ending wave of mergers.

Dell may pay too much for EMC’s business. The offer is more than twice the total equity and about 50 percent higher than the value of EMC’s assets. Acquiring companies often overbid to see off rivals.[1]

Most observers expect Dell to sell unwanted parts of EMC when the deal completes. This will lower the final cost of the acquisition.

The elusive benefits of tech consolidation

Big technology company mergers rarely succeed. I can’t think of any that have been a resounding success.

Expect managers to prattle on about synergy as if they know what they are talking about. They rarely do. In most cases the movers behind takeovers are lucky if the new organisation is worth as much as the sum of the parts. Often big tech mergers destroy value.

There is a long list of disappointments. Oracle’s Sun Microsystems acquisition saw a huge destruction of value. At the time there was a lot of talk of synergy.

Then there is HP. It binged on Compaq, EDS and Autonomy — all, allegedly, bringing synergy. There’s little evidence of that.

Maybe that experience prompted HP boss, Meg Whitman, to point out the integration challenges Dell face.. She should know, her predecessors left her a mess.

Dell’s debt risk

Dell faces another risk. It needs to take on a huge debt for the acquisition. The good news is Dell has a track record of paying-down debt. It has already paid back the cost of its 2013 buy-out.

EMC’s shareholders get a profitable exit just as the future starts to look uncertain.

Its operating income last year was US$4 billion, net income was US$2.7 billion. Although debt is cheap at the moment, paying the interest will still be a challenge.

Cisco shareholders must be praying someone else with deep pockets is thinking of a similar move.

Cloudy forecast

Dell’s EMC buy underlines how cloud computing has hurt enterprise technology companies.

Cloud is the biggest change since networks of small computers replaced mainframes in the early 1990s. Unlike the earlier waves of creative destruction this isn’t about replacing a hardware generation. It’s about the move from hardware to services.

EMC has a toehold in the data centre business. It sells storage hardware and virtualisation software to help spread loads between servers. This is a company that until recently had double-digit growth. Today EMC is growing at a slower pace.

Dell diversifies with EMC

Dell has moved into corporate computing. It has made big strides with storage and servers. Yet it still depends on PCs for most of its income. That market is in free-fall.

The server business is no better. Only IBM and SAP have much in the way of mainframe business. Players like Unisys are now consigned to mainframe niches. And that sector is unlikely to grow.

The smaller servers that have dominated business computing for the last twenty years are also on the way out.

While the shift to cloud computing threatens Dell and EMC, it also threatens all the other business technology giants of the last 25 years.

Microsoft is an exception. It got into the cloud ahead of the trend and is now the main competitor to AWS which came from nowhere to dominate enterprise computing.

Commodity

Away from the cloud, hardware makers are now churning out basic, commodity computers which can be programmed to act as servers, routers or storage devices. Hence Software-defined networking, software-defined storage and even software-defined data centres.

This trend also reduces the once valuable integration revenue — everything plays together better now.

Dell’s strength lies in building low-cost, undifferentiated hardware. But even its commodity computers are too expensive for the big cloud companies who build their own kit or outsource the job to white-box contractors.

Now Dell is banking on selling low-cost hardware to enterprises so they can build thier own private clouds. It may also hope to juggle the economics of building commodity hardware to win back business from the cloud companies.

Götterdämmerung

Many commentators view the deal as a sign of the triumph of new cloud players over old enterprise technology companies.

There is something in this, but it’s not straightforward. All the old companies have made huge investments in cloud technology. They just haven’t moved fast enough, or confidently enough towards the new way of running technology.

Unlike AWS, they face a problem, if they race too fast to the cloud they’ll replace their existing high margin business with a low margin alternative. Only Microsoft has avoided this fate.

Which brings us back to Dell buying EMC. It isn’t a triumph or a new beginning, the deal is a step in the death throes of an era. What we are seeing is the twilight of the technology gods.


  1. Once a takeover is in play, it can often be just as important, maybe more important, to keep the target out of rival’s hands. Much of this is just something that goes on inside manager’s heads. I can’t remember many large scale acquisitions which ended up causing serious damage to rivals.  ↩

The image at the top of the story is Siegfried and the Twilight of the Gods by Arthur Rackham.

 

wellington cloud

Google gave cloud storage prices another down twist this week announcing Google Drive for Work.

The service is a business version of Google Drive. It comes complete with administrative controls and APIs. However, the headline story is Drive for Work offers customers unlimited cloud storage for US$10 per user per month.

Google announced Drive for Work within days of Microsoft cutting prices for its OneDrive cloud service.

Despite appearances — and the way some media outlets tell the story — the two are not in direct competition.

Google told me: “Drive for Work is a new premium offering for businesses that includes unlimited storage, advanced audit reporting and new security controls”.

Business class Google Drive

Which means Drive for Work is what the label says: a strictly business proposition. Companies have to sign five employees to the service to get the US$10 a month unlimited storage.

Cloud storage is a fast-moving market, most likely Google will push the same offer, or something similar, to consumers at a later date.

Google Drive for Work highlights another important cloud storage trend: Companies offering cloud storage don’t stop at packing bits into a data centre, they are wrapping services around their offers.

Storage is treated as something to lure customers into paying for non-commodities and that’s where the battle will be fought between Google, Apple and Microsoft.

Where this leaves other cloud storage providers like Dropbox, Box and Mega is not clear, but it will not make life easy for any of them.