Cloud computing appears to be the future. But can every company afford their own version of Apple’s iCloud? Although Apple paid $1 billion in 2009 to acquire land for its North Carolina datacenter, that figure is only the ‘downpayment’ required for the tech giant to bring the cloud to millions of customers, according to a Friday report.
A quote by North Carolina Governor Bev Perdue noted Apple would “invest more than $1 billion” in its data center over nine years. However, Apple paid $750 million in 2010 just for the land and building – no equipment, no staff, no research and development.
“What this level of spending implies is that iCloud (and Siri and iTunes) are expensive,” writes Asymco analyst Horace Dediu. Indeed, iCloud services demand “a staggering commitment few can make,” he adds.
Apple envisioned iCloud at a time when it had sold just 26 million iPhones since the handset’s 2007 introduction. Today, about that number of iPhones are sold every three months. Apple now sees iCloud holding consumers’ data, music and even movies.
Can others afford the cloud? Amazon’s recently introduce Kindle Fire makes heavy use of the cloud to store documents, music, ebooks and more to keep the price down and compete with the iPad. As the market shifts from local to distributed storage, the need for expensive infrastructure becomes critical. However, such a crushing expense will dramatically shrink “the number of companies that can participate,” the analyst writes.
