Market Analysis - Cloud storage in ecosystem war?

Even though the social network war isn't over yet, latest war ongoing with the big guys, is who gets to own the data of people. The players are not totally the same than in the social network war, but most of them are there still. Social network war is about persons connections, which can't be easily divided to many services. Data on the other hand is personal and what friend select as cloud provider is not that important than social network. Both social network war and cloud storage war play big part on the big ecosystem game ongoing between Apple, Google, Microsoft and Facebook.

The main similarity to these both wars is, that changing sides is difficult when you have picked a side. When you decide to store all or most of your data to some cloud storage, it will take lot of effort to change it another. Same is true with social networks, when you build connections to one service, changing completely to another is near to impossible.

The second similarity is that big part of the companies offering their services today, will not be there in five years. There used to be many social network tryouts there five years ago. Some of them lived to see today, most of them not. Same will happen to cloud storage. Today, there's hundreds if not thousands of players offering cloud storage. Doing it profitably is costly and many services will go bankruptcy in coming years. I just hope people don't lose their data on that point.

Ecosystems needs ways to lock or at least tie people closely to their ecosystem. Until now physical devices and operating systems have been good ways to lock people to ecosystems. World is changing to the direction that completing a purpose is more important than the tool used. For example when you want to check what your friends are doing, you do it with any tool available. Or if you want to show your photos from last years vacation to someone, you just show those through cloud. Data needs to be available always.

So, will cloud storage play a role in ecosystem war by the big ecosystems and players?

Facebook

The market leader in social networks, Facebook, haven't gone to the cloud storage business yet. I see that as a bit of a surprise. It's not their core competence or not even close to core business, but still it's a pretty good way to lock people in. If they are not going for all the data, I would see owning the memories, like photos and videos would be a perfect match for their current offering. Connection with others are all about visual nowadays and what would be better way that to share photos and videos that having all those in the service already.

Definitely this would be big change on their strategy. Currently they are heading more on the knowedge business with open graph, than to data business. Still I wouldn't be too surprised if they would acquire some big cloud storage player.

Google

Google, the challenger in social networks war has taken totally different approach. They already have people's email and now they are trying to get to own their data. When they get people to load their data including pictures and videos, people will be tightly connected to Google services. Maybe their thinking is something like this: If we get them to trust their data on us, we get people to use Chrome and Android first. Next maybe they will buy a Chromebook laptop, because usage of their data is so much easier that way. Then eventually people might change also Google+. People don't really care about what social media they are actually using, if only they get connected to the people they want. If everyone would be in google+, why wouldn't they use that.

Microsoft

Then there is Microsoft. They seem to be losing the consumer business war. They are next to non-existing in the social network war (did you know they do have social network called So.cl? ). Internet Explorer is dropping it's shares. Windows Phone share of smartphones is ridiculously low. Microsoft Account counts for nothing. Their competitive edge comes from the Windows platform. They are still dominant on that with over 84% market share.

As long as data remains stored in local drives and applications are running on local machines, Microsoft will be important player due to Windows platform. When data will be in clouds and applications are run from clouds, operating system doesn't really matter anymore. On that point Microsoft will be in trouble. I believe they know this and have been aggressively trying to get into people's life's with Skydrive cloud storage and Windows 8 ecosystem. They need to tie people to some Microsoft brand soon, Windows OS will not be the tie it used to be.

Apple

Apple ecosystem is strong. Their way to lock people to their ecosystem has been through the proprietary OS and devices and excellent services they provide. When person have come in to Apple world, it is not have been easy to switch out from there. Still Apple haven't been able or willing to try to get to own the social networks of the people. They have been locking people in with data previously with their own OS. Now they are trying to get people to use their iCloud services. Main question with iCloud remains, will it ever be fully functional and available for Mac user's other devices. That's a key question on the ecosystem game. Winning the game with fully Apple created products will be hard.

Case Dropbox

Dropbox is the hot potato currently. It is a successfull service on it's own currently. Soon still there will be pressure to enlarge even more. On that point some one might buy it to get to own important part of people's life.

Best guesses who would have interest to buy them are Facebook and Amazon. Facebook, because they currently "only" own the social network of person, but nothing else. Having persons data would make Facebook even much bigger part persons life.

Amazon then on the other hand, doesn't really own much of persons life. They are trying all the time to connect more  and more with people with Kindle Fire, own currency and knowledge what you might like. So they do have a drive for having tighter connection to people, even at the end their profit would come from sales of physical goods. And on the other hand they already host the service for Dropbox.

Other big players

Eventhough Twitter is social media, it's not in the owning a persons data game. It is a strong player in the persons brand came, but that's a bit different game.

Mobile manufacturers have almost miraculously lost the game. None, other than Apple, have persons data or social network at their hands. Nokia had a change one day, but it lost it.

The small new players

Like stated, everyone is offering cloud storage currently. Within few years I believe there will be even more player in the field. In this playground there is more room for variety, but not for everyone. Definitely there will room for niche players who get people to store their data either with cheap price, extended security, really good privacy, back-up features, excellent user interface or something else that makes them special. This market is not only for few players, but still amount of players is not infinite. Services need certain scale to be profitable.

Conclusion

I believe owning people's data will play a major role in ecosystem war between Apple, Google, Facebook and Microsoft ecosystems. Data about people themselves, even though it is opening up all the time, it is still valuable to person. Contracts, bills, pictures, videos, resumes, contacts, medical history and other similar will always be important to people. All of these will never be opened for everybody else. Whom people will trust with their data will be a long term contract. Everyone will not see cloud storage provider to be so important at first, but when big part, if not all, of one's data will be stored in cloud, trusting the provider is important.

It will be interesting coming years to see how the cloud storage market will turn out to be. I have made my own journey to the cloud already. All the personal data that I own is stored in Google cloud. I trusted the big player.

Written by +Henri Hämäläinen

Innovation is all about execution

Innovation is often misthought to be all about ideas. Often people think that great ideas means great innovations. Actually ideas as such don't have much value. Ideas are easy to come up with, but what makes a difference is the execution.

One consequence of this false thinking of ideas being the important thing on creating innovative products, are all the systematic innovation methods and processes that are seen with companies and other organisations. From the book Inside Steve's brain I loved Steve Jobs citate:"trying to systemize innovation, is like somebody not cool, trying to be cool". That's exactly what I've felt on these innovation boosting systems what I've seen in many different places. They are focused on gathering new ideas. Often those even give the greatest value to ideas which are most original and are most weird and out of the current world. Revolution is quite rare, evolution is happening all the time.

Best projects where I've take part have had a real focus on details. Those have had a vision of an idea and then we've all been together working hard to get all the smallest details right. That have required lot of iterations and lot of errors. Making a mistake is a key thing on creating great innovative products. If you never make a mistake when creating something new and innovative, then you've just never realised the importance of learning and mistakes on you creation process.

I learned from the same book Inside Steve's brain another great quote, this one is from Pablo Picasso: "Good artist copy, great artist steal". This tells exactly what innovation is mainly about. If you think companies like Apple, they haven't really ever invented anything totally new. They've just taken good ideas from others and owned those and made those perfect. Same is true almost about any products or companies that are thought to be innovative. If you think Facebook, there's been social networks before them, they just executed theirs perfectly. Same is true about Toyota Prius. This innovative hybrid car was not the first or only car on the market that time, Toyota just executed perfectly and kept improving their early prototypes. Innovation is often about stealing, undesrtanding a great idea and improving it to be perfect when creating the product.

When you are working on innovative products, concentrate on details and vision of a problem you are solving. Overall all innovative products are solving real user problems. Some of these problems are just problems that will come obvious in the future and people don't really understand having those yet. If you think of mobile phones as an example, people didn't know twenty years ago, that they would need to be able to communicate with others everywhere. With mobile phones, the problem has always been there, people just didn't think that it could be solved.  

Written by +Henri Hämäläinen

Book review - Inside Steve's brain - expanded edition

I read book about Steve Jobs and Apple written by Leander Kahney. Book's name was Inside Steve's brain. Copy I had was an extended edition of this book. I figured out from the name, that the book would really dig into mindset of Steve Jobs. I knew that writer Leander Kahney didn't have the permission from Steve Jobs for this book, but still I assumed he had second hand material which would open up the mind of one interesting technology leader.

I have to start with the negative side of the book. It promises in the name that it would be "inside Steve's brain" and would really tell why Steve Jobs behaves as he does, what are his motives and driving forces. Unfortunately this is not what the book really is about. Book really is an entertaining and excellent one, but it doesn't really fulfill it's promise from the name. I expected it to be different than it was, but when I got over the disappointment, I realised there's lot of good in this book.

If you admire Apple products, like most of us do, this is the book that tells more about how Apple creates it's products. It tells about excellent people and their processes to create these innovative and cool looking products of theirs. It could almost work as a bible for those who believe that Apple's way of building products is the best and only way. It really gives lot of food for thought about importance of design, product thinking, innovation and clear focus, when creating products.

I specially loved the parts where it told how innovations and designs are created at Apple. Innovation and beautiful designs don't just come from great thinkers, but they need hard work and lots of iterations even from some of the best guys in the planet.

For guys creating any types of products, you should be aware how Apple has done theirs. Understanding that methodology will give you good ideas how to improve your own organisation on improving the ways you create products. That's the reasoning I would sell this book to you if not an Apple fanboy. If you are, then I guess I don't need to sell it to you.

I have to admit I was hoping the book to be more about Steve Jobs. This book was mainly about Apple, which for some might equal to Steve Jobs, but not for me. I've found Mr. Jobs personality and experience such an interesting, that I hope to find more about that on the soon to come book Steve Jobs.

Written by +Henri Hämäläinen

Steve Jobs presenting Apple new headquarters plan

No one can argue that Apple is one of the most innovative companies in the world. Much of it personalizes to Steve Jobs. You've most probably seen videos he talking in Apple press conferences and events, but those are carefully planned events that doesn't reveal much about the personality of Mr Jobs. Here's on the other hand footage from Cupertino town hall meeting from yesterday (7.6.2011) where he is presenting their plan and vision for the new headquarters for Apple to Cupertino.

In this video it's refreshing to see him to reveal his thinking about well-being of his employees, his commitments to his home town and the whole thinking behind Apple's desire for calm and beautiful design. I think this thinking perfectly reveals the importance of the soft values, like having enough nature available for employees, in Apple's thinking of making it perfect.

I think I figured out, from this single 20 minute video, much more about Mr. Jobs way of thinking than tens of articles I've read about him. Watch it with careful thinking if you like:



Written by +Henri Hämäläinen