Startable – Healy Jones’ & Prasad Thammineni’s Blog

iCloud is brilliant. My team has had the chance to look through the API, and it’s going to be very useful. But it’s also going to be very good for Apple, because it will really drive hardware processing power escalation. In other words, it’s a totally device focused strategy. Very slick Apple!

iCloud API – Look out Amazon!

First of all, iCloud is a direct challenge to Amazon’s cloud services – actually, just the storage part. This is because iCloud’s API is built to allow applications on the Mac, iPhone, iPad, iWhateverIsNext to store data in the cloud and then sync across the iUniverse. Totally cool. And totally competitive with Amazon S3 (Amazon Simple Storage Service). It’s a cloud based place to store data.

Amazon offers another cloud service – Amazon Elastic Compute Cloud (Amazon EC2). This allows companies (like OfficeDrop) to upload data and have complex computational processing done in the cloud vs. on a customers’ device. This is crazy powerful, because we have not had to build out complex data centers with expensive servers to do computationally complex things like OCR or powering our document search engine.

According to my team, iCloud doesn’t really offer cloud based compute – only storage with the ability to sync an application’s data up and down.

So, if you are building an app on the iPhone and using iCloud, where does the compute happen?

iCloud drives Device Processing Escalation

That’s right, with iCloud, processing has to happen on the device. The device Apple sells you. And if some high demand new app requires serious compute that your older iWhateverWasCoolSixMonthsAgo can’t handle, guess what? You’re in line at the Apple store upgrading your device! Brilliant Apple! It’s like Wintel all over again, but without the Intel part.

Another thing to look out for Amazon!

And it doesn’t stop there. Imagine you are a new iPhone app developer. Historically you’d fire up some Amazon instances for your compute and start using S3 for storing data in the cloud. Well now, you can get “free” storage in iCloud (Ok, well, the consumer ends up paying for it but it’s free to the developer!) So you don’t need to do all that heavy lifting for the online storage part. I know, I know, Amazon is much less lifting that building out your own storage and whatnot, but now you don’t even have to do that. So getting cloud storage, for an upstart app developer, is even easier than it used to be. So are you going to use EC2 for processing stuff? Or are you just going to try to let the device handle it? Well, if you are doing the MVP thing you are probably not going to bother to build any sort of processing on Amazon and are going to see if the device can handle the processing (no ifs, ands or buts, this lowers the barrier to entry for an app startup)… And, maybe it can, maybe it can’t but still, you never had to sign up with Amazon to launch.

And that is the part where iCloud really kicks Amazon in the teeth. Now, startups don’t even have to do anything with Amazon to launch their startups, and may not ever have to use Amazon’s cloud services at all. iCloud could remove entire generations of potentially successful startups from the Amazon web services ecosystem and instead bind them to Apple.

Anyways, this iCloud thing is going to be big.

Also, if you are looking to the OfficeDrop reaction to the iCloud announcement, here it is:

The team here at OfficeDrop was glued to the live updates on Apple’s new iOS and iCloud… and we got pretty excited.

While some pundits have been claiming that iCloud will kill existing document sync, access, collaboration and sharing startups, we think otherwise. OfficeDrop CEO, Prasad Thammineni, was quoted in Macworld and conveyed our excitement about the new announcement. From the Macworld article:

Prasad Thammineni, OfficeDrop’s CEO, said he saw opportunity. Apple’s new service, he said, isn’t necessarily oriented toward business-sized customers—but it could educate those customers about the advantages of cloud storage and expand his company’s market.

“It’s going to educate consumers to say ‘I want my data to go where I go.’ That will prompt customers and small businesses to say they want to do their data the same way,” Thammineni said. He added: “So for us, we see this as a big positive thing.”

We have reason to be so optimistic about Apple’s iCloud. When Microsoft began their “To the Cloud” campaign in November of 2010, we saw our keyword “cloud” related search traffic double from the previous month. And today, this traffic is up 5x what it was before Microsoft began educating the world about the cloud. (Note that while all search traffic for OfficeDrop has grown in that timeframe, it hasn’t grown anything like cloud related traffic. And there was a very distinct, positive change in the cloud related search traffic growth pre and post Microsoft campaign.)

Apple’s iCloud efforts will help propel cloud usage to the masses (or at least beyond the early adopters.) And since Apple is so laser focused on the consumer, OfficeDrop’s target customer base of small business owners will be left searching for a solution that meets their special needs. According to research that we’ve seen, last year only 11% of small businesses were using cloud based SaaS solutions – up from 8% the year before, but still a tiny percentage. And once you go cloud you are 4x more likely to try another cloud solution. If Apple can pull this off they will be the first baby-step into cloud services that our potential customers need!

Finally, our ScanDrop scanning software app thrives on scanning paper into people’s cloud based accounts, and is really designed for customers who use multiple cloud services. So one more strong cloud offering is quite good for ScanDrop, and will help our Mac ScanDrop scanner software revenue grow.