Apple's cloud services: expect slight disappointment

By Jonny Evans

The vision we have of Apple [AAPL] and its cloud plans is tantalizing: seamless access to all your files and multimedia content using your iPhone, iPad, iPod touch, Mac or other supported device. Be prepared for disappointment. Even with Apple's heap big data center, the mobile networks just aren't ready to carry all this data. This makes it inevitable these services will be primarily Wi-Fi only. It also means Apple will introduce its cloud-based services incrementally.

A quick catch-up:

Apple has a huge data center in North Carolina and is creating other huge centers internationally. Leading its data center push, Apple has hired Kevin Timmons away from Microsoft. Apple is expected to offer iTunes services, video streaming, voice recognition, navigation services and enhanced Mobile Me services via the center. The latter may even include powerful new features to let you access your Home folder via the cloud. These all sound like great implementations, enabling users to access everything that most matters to them using their choice of Apple device. But network coverage will be the big bugbear...

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Take a look at AT&T's and Verizon's networks. These are creaking and buckling under the strain of today's smartphone traffic. The cost for a future of mobile data will demand changes in how we, consumers, think about mobile data. Things we take for granted are under review, including net neutrality and all-we-can-eat data bandwidth. The networks want us to pay for our priorities: quality of service, or all our data everywhere and all the time?

"Existing network resources will not be able to keep pace with the consumer demand for mobile data and the emergence of new 'mobile connected devices'," says Steven Van Zanen, Acision.

Changing perceptions

All future players in the move to consumerize cloud-based data systems will face such challenges. I agree we can offload data via Wi-Fi or whatever other connected flavor we can find, but the challenge remains. And are fixed line alternatives really up to the task?

In the absence of fat bandwidth the truth is that when we're out in the field the ability to access and edit 100GB video files using cloud-based services will be a fabulous vision. Like any fable, while the dream is sunshine on the cornfields, the reality will be no more than legend, chimera, a whisper in the dust. And even fixed network broadband will feel this capacity crunch.

This isn't just about infrastructure. It is about maintaining quality of service levels while managing ever larger chunks of data. Carriers need to develop intelligent business cases through which to support changing customer need.

Think on this: Cisco says data traffic grew 159% in 2010. Recent Juniper Research data claimed mobile data traffic will reach 14,000 Petabytes by 2015 -- the equivalent of 18 billion movies or 3 trillion tracks.

Infrastructure investment, traffic management and other stories

It isn't because the networks are lazy. They are investing millions in new capacity -- but ask yourself, how does it profit networks to invest in capacity to serve peak time traffic, only to see that equipment doing nothing at all in the off-peak hours?

That's what's driving carriers toward developing traffic management systems. They want to see more consistent use of their existing infrastructure on the one hand, and they wouldn't mind replacing those shrinking voice call charges with the other.

This will take time:

You'll still get all-you-can-eat data access, but this will likely cost you more. Conversations with people inside the business tell me that we're likely to see access to video-based services or VoIP carry an extra charge (Mobile video will account for 52.8% of 2011 data traffic this year, Cisco claims).

Quality of service will also come into play.

• We'll also see high-class 99.9% always available Quality of Service deals put on offer for business users.

• There will be gamer's deals too so World of Warcraft fans will shove a substantial monthly sum down in order to ensure they are getting the best possible bandwidth when using a mobile connection.

• Carriers will also offer email and Web deals, YouTube add-ons and bolt-ons of extra bandwidth for a fixed charge.

It could get expensive -- but rest assured, the networks who succeed will be the ones who focus on customer need, and manage to express their differentiated deals in a way that doesn't leave users too galled at the cost. I hope.

Offload the main load

Offloading will matter more, too. At its simplest, this is a scenario in which a mobile user may request data using their phone, but actually see that data -- particularly video -- served to their device by a local friendly Wi-Fi or Femtocell spot, thus reducing data drain on the carrier's own network.

Telesperience data reveals 20% of CSPs are offloading now, but this climbs to 73% by the end of 2012.

Most analysts I've spoken with in the last few days claim Femtocell seems less likely now to become the de rigeur solution to the bandwidth breakdown. Wi-Fi hubs seem ascendant.

Director of Research and Publications at Telesperience, Teresa Cottam, thinks mobile telcos could consider offering subscribers free Femtocell hubs with their normal subscriptions.

Who is sitting on Apple's cloud?

Apple's OS is moving to become more cloud-based; the move to iOS-ify OS X is part of this. Apple also has various building blocks in place to begin ramping-up its online services offer. But lack of mobile data bandwidth will impact any such implementation of these plans.

Two examples to illustrate the effect of poor data network coverage when used in conjunction with highly-speculated upon features of Apple cloud services:

Example 1
I'm really keen on music. I'm streaming an album via Apple's much-expected cloud-based music rental service. I'm enjoying Cee-Lo's performance of Brixton Briefcase on the new Chase and Status album. It is great. Then the music gets jumpy and stops. Because the mobile data service I'm using to stream the music is over-subscribed where I am and so the signal degrades.

Example 2
I'm late for a deadline. I thought I'd sent the file over to the client, but it hadn't arrived. I'm at the airport about to fly to [insert exotic and fabulous destination I can only ever dream of here]. I've managed to access my home Mac to transfer files to the client, but somehow as I try to send the files, the connection keeps timing out. This is because my mobile data provider is having quality of service challenges. I won't know if I've still got that client until I land in [insert exotic and fabulous destination I can only ever dream of here].

These two examples should help illustrate the likely impact on Apple's cloud-based plans of any move to support 3G or LTE with its new services. In both cases, these problems might not emerge over Wi-Fi, but that they happen at all is likely to impact customer satisfaction levels.

Success is not optional

Apple's cloud-based plans seem to be an important strategic element as the company moves toward the dumb terminal vision espoused by former OS X chief, Bertrand Serlet, way back in 1997.

For these plans to be fully realised we're going to have to see improvements in the mobile and fixed data networks, and it seems that part of these improvements will demand data consumers accept different tiered data access systems and -- and I dread this -- a move away from net neutrality.

(I'm not saying I'm against net neutrality, I'm very much in favor of it, but I'm beginning to think the advocates of tiered internet access models will eventually prevail).

The reason? Because mobile networks won't be able to handle the additional traffic of every user accessing all their files using the Internet over mobile devices. This is likely also what is in the way of Google Chrome OS and netbooks.

Lowering expectation

For Apple the danger is that if it introduces its cloud-based services with the full regalia of bells and whistles, it runs the risk of disappointing consumers with its implementation -- not, in this case, on account of Apple's fault, but on account of poorly-managed data bandwidth.

And this is why, in phase one of the Apple cloud plan at least, I'm warning users not to expect too much until such detail is eventually figured out.

What do you think? Is there an easy way to make the best of bandwidth, or should lazy network providers bite the bullet and deliver the infrastructure we need? Let me know in comments below.

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