Apple is dead in the cloud

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Facing the end of the personal computing business as we know it, Apple is betting the company on a new generation of thin devices like the iPhone and iPad. But Apple is weak in the cloud computing applications that are essential for it to survive and thrive in the new future.

Charles Stross got it close to right last week. Stross is both a talented science fiction writer and insightful observer of the technology industry. In a discussion of Apple's refusal to support Flash on the iPhone and iPad, he writes that Jobs "believes he's gambling Apple's future — the future of a corporation with a market cap well over US $200Bn — on an all-or-nothing push into a new market."

PC prices are falling precipitously, the profit margin is thinning. "Apple has so far survived this collapse in profitability by aiming at the premium end of the market — if they were an auto manufacturer, they'd be Mercedes, BMW, Porsche and Jaguar rolled into one," Stross writes. But that won't save Apple forever. The future is in cloud computing.

Apple are trying desperately to force the growth of a new ecosystem — one that rivals the 26-year-old Macintosh environment — to maturity in five years flat. That's the time scale in which they expect the cloud computing revolution to flatten the existing PC industry. Unless they can turn themselves into an entirely different kind of corporation by 2015 Apple is doomed to the same irrelevance as the rest of the PC industry — interchangeable suppliers of commodity equipment assembled on a shoestring budget with negligible profit.

In other words: The battle for future dominance in the computer industry is in the cloud.

Stross is right, but he doesn't take the discussion far enough.

To be a player in the computer industry in 2015, Apple needs to be strong in cloud computing. And the company's cloud computing offerings today just plain stink.

In cloud computing, Apple is like a power-hitter who can knock home runs out of the park, but can't run, catch, or even show up sober at gametime.

The company created two wildly successful services that revolutionized industries: iTunes, which for the first time ever got people used to paying for media they'd previously downloaded free from Napster; and the App Store, which allowed users to customize their phones in ways that were never before possible.

To win the battle for 2015, Apple can't just rely on two services. It needs a broad array of cloud applications. And Apple just doesn't have it.

MobileMe is a joke. It only works within the Apple universe and Windows desktops -- no Linux, no other mobile platforms --  and it's not reliable.

Apple is lagging behind Google in its calendar (despite recent Google Calendar outages). Gmail beats MobileMe mail. Google Apps is a full-fledged Internet office suite, where iWork.com simply allows document sharing.

Apple is also losing in online storage and synching, which will be crucial to winning the cloud battle. If users are going to be storing their documents in the cloud, they need some way to sync those documents between multiple devices. In that arena, the winner is the Dropbox startup, which lets you synchronize documents between multiple PCs and mobile devices, with changes on one PC automatically reflected on the cloud and all other connected devices.

Dropbox has applications for Windows, the Mac, and Linux which makes the Dropbox server appear, to the local computer, to be just another folder. Dropbox also has iPhone, iPad, Android, and Blackberry apps, which provide some document syncing capabilities.

Dropbox has a lot of momentum, it has potential to emerge as a Google- or Facebok-class platform.

By comparison, MobileMe iDisk only does file syncing Mac-to-Mac. And Apple's file syncing on the iPad is torture, it requires manually exporting documents and using the elderly, bloated iTunes application.

To thrive in the cloud-computing future, Apple needs to create brilliant cloud applications, and I don't know if that's in Apple's DNA. Apple is a company with a fanatical need to control every element of its ecosystem, and cloud computing is fundamentally opposed to that approach. Google did not succeed by carefully screening every application built on top of its platform, like Apple did with the App Store. To succeed at cloud computing, companies need to publish APIs and throw the doors open to anyone who cares to use them.

I see three possible futures for Apple:

1) Failure. It fails to adapt to cloud computing. Apple is wildly successful today, but fortunes change fast in the technology industry, and the company could be on life support by 2015.

2) Apple changes its corporate culture to embrace cloud computing and the openness and loss of control entailed. I see that as unlikely; Apple sees control as vital for its survival. It remembers well the bad old days of the 1990s, when Apple's survival depended on the largesse of Microsoft continuing to support Office on the Mac, it won't be in the position of begging for scraps from someone else's table again.

3) A miracle occurs. With Apple, that's always a possibility. Other companies fail when they can't to play by the rules of industries they enter, but Apple changes industries to suit its preferences.

Mitch Wagner is a freelance technology journalist and social media marketing consultant. Follow him on Twitter: @MitchWagner.

Image: Wikiemdia Commons

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