The dominance of cloud computing will increase competition and innovation

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The computer industry's favorite thing is a big creative idea. Of course, because many companies want to take a slice of it, the immediate aftermath is intense competition. "Cloud computing" is a recent example, and companies big and small have joined the race. The idea is that computing will increasingly be provided through the Internet as a service for large hardware facilities. Documents, emails, and other data can be stored on the web, or "in the cloud", so that these files are available on any computer or mobile device. From e-mail, albums to calendars, and shared files, there are already many services that operate in this fashion.

This represents a very big shift. If you're storing more and more files online, and the software industry is getting more and more out of the browser, all of a sudden, what kind of computer you have or what kind of software you're running is not that important. This means that Microsoft, which will launch a new operating system this month, could fail, unless the software giant can encourage software developers and their users to move to their cloud computing services. Its main competitor, Google, also has similar services. Google is constantly launching new products, and its internal links are getting closer. Yahoo and Apple, which combine with Microsoft, also have cloud computing services, and companies like Salesforce and NetSuite offer similar services to companies. Amazon was the first company to lease cloud computing power. Some companies offer larger, more integrated services, while others focus on one area or provide the technical infrastructure needed to build and run the cloud. But the war has begun.

The vitality of the cloud

The prospects for this new market are good. It lets consumers no longer have to bother with computers (without installing software) and is cheaper: Many cloud computing is free, and they are supported by advertising or premium users. If you use a Cloud-based messaging service, you don't have to worry about losing your email when your computer crashes, and you can find your mail in any browser on any computer. When cloud computing services are expanded, other files and data will be available on any computer.

Companies will also benefit from it. With cloud computing e-mail, accounting, and consumer tracking systems, companies can reduce system complexity and maintenance costs because all programs run in a browser. At the same time, cloud services providers can benefit from economies of scale. If Google or Microsoft can manage the mail server well, why should every company or university have its own mail server? After all, these companies are already feeling good about centralised power. Cloud computing will transform computing power in the same way as centralized power (after all, few companies produce their own electricity, and perhaps later computing power will be as concentrated as electricity).

The ability to provide computing on demand can give the industry a new incentive. During the rapid development of the Internet, a new enterprise must first raise money to buy a bunch of servers. If a website suddenly becomes popular, it needs more servers to meet traffic requirements. Traffic can now be leased on demand, allowing cloud services to be upgraded easily. This has reduced market access thresholds and promoted competition and innovation. It also offers companies like Microsoft and Amazon the opportunity to create cloud computing platforms, and other companies can rely on such a platform to provide services.

For anyone familiar with computer history, there is one obvious concern: One company will be bigger and the antitrust attention. Just as IBM is in the mainframe world, Microsoft is in the PC sector, and it is likely that companies that are trying to make a move on cloud computing will probably do so.

Regulators have begun to pay attention to cutting the bud. For example, they have begun to worry about the issue of working together at Apple and Google's board, or that search engines keep search history indefinitely. So far there has been no legal contest. This is because these technology companies are very aware of the history of the business and they are eager to avoid the same mistakes. But there are three areas where cloud users must be careful, cloud providers are responsible and regulators should intervene.

Brewing bubble?

The first is the technical blockade. As has been the case, competitive companies promote their own, mutually incompatible standards and file formats. For example, it is not easy to move data from one cloud system to another. The buyers of cloud computing services must take into account the technical blockade and choose service providers that will not require much hassle with data transfer.

Second, storing so much personal information and using them for purposeful advertising is inherently a matter of privacy. Consumers who are unwilling to pay for cloud computing services have to endure advertising services based on their online activities because they are paying bills. Most users will be happy to use some privacy to exchange for free services, but they should be able to control their personal data and modify the personal information that the service provider edits for the purpose of advertising.

Third, data stored in cloud systems may not be safe. This month, for example, thousands of people with sidekick smartphones lost their address books, calendars, photo albums, and other personal data. They are all stored in Microsoft's Danger cloud system. If providers of cloud systems want to attract and retain customers, they'd better ensure their systems are more reliable.

With the dual supervision of consumers and regulators, the providers of cloud services are gradually shifting to new standards and more transparent and reliable. If their movements are not positive enough, regulators will have to intervene more forcefully. But for many individuals and business users, cloud computing's advantages outweigh its drawbacks. Compared to the previous competition in the computer industry, one of the company's victories this time seems unlikely. Hopefully the best clouds will win.