Cloud Adoption Ahead of Schedule to Reach 500 Million in 2012: IHS

IHS iSuppli found consumer adoption of cloud services to have passed 375 million users in June, putting the market 75 percent of the way toward its year-end estimate of 500 million.

Consumer adoption of cloud storage services is exceeding expectations, according to an Oct. 15 report from IHS iSuppli. By the end of June, the research firm found personal subscriptions to such services to have exceeded 375 million users—a figure that put the market already 75 percent of the way toward IHS' full-year estimate of 500 million users.

Because of the relative newness of cloud technologies, no adoption figures exist for 2011, according to IHS, though best guesses are around 150 million. IHS expects subscriptions to climb to 625 million by 2013 and then to double over the next four years, reaching 1.3 billion subscribers by 2017.

“The cloud is a game-changer in an age of near-ubiquitous mobile broadband, offering benefits to consumers and cloud service providers alike,” Jagdish Rebello, director for consumer and communications at IHS, said in an Oct. 15 statement.

"For consumers, cloud services are intended to manage and store user-generated data or purchased content, such as music, ebooks, pictures or videos," Rebello continued. "The content can then be seamlessly accessed and synced across devices like smartphones, media tablets and PCs. Meanwhile, technology companies are looking at the cloud as a way to generate revenue.”

Indeed, Apple, Microsoft, Google, Amazon and others are heavily investing in cloud infrastructure and services, which they offer to consumers, IHS notes, at the same cost or lower costs than those of pure-play providers such as Dropbox, Mozy, Carbonite and SugarSync. To compete, the latter have developed "freemium" models in which they give away a few gigabytes of free storage, pulling in users who likely go on to pay for more.

Dropbox partnered with smartphone maker HTC, for example, offering in some cases up to 23GB of storage for two years with the purchase of a phone. Not all carriers supported this, though, likely preferring that customers use their clouds instead.

"In addition to generating revenue opportunities, cloud services can create stickiness and reduce churn among the customers of mobile operators," said the IHS report. "Users with large amounts of data stored on an operator’s cloud service are likely to be reluctant to migrate their content to another operator’s cloud service at the end of a contract period because of the hassle involved, so the cloud can be effectively leveraged as a tool to retain customer loyalty."

Despite the perks and conveniences of cloud storage, not everyone is keen on it.

Greenpeace has been active in calling attention to an industry that markets its product as ethereal and earth-friendly, while the reality can be acres of energy-burning servers. In an April report, it called data centers—clouds—the "factories of the modern age."

In September, The New York Times reported on a Microsoft data center in Washington that used diesel generators, which are known to emit toxic particulates. While the generators were secured as a back-up power source, during one year Microsoft operated them for more than 6,000 hours, according to The Times.

That said, public scrutiny of such practices, along with cost-saving measures, 451 Research said in a September report, are pushing data centers toward not only genuinely green practices but toward becoming "engines of innovation in efficiencies."

The firm surveyed more 1,000 data center decision makers, who all said they were pursuing energy efficiencies. While 17 percent cited regulations as a driver, 82 percent said they were motivated by "financial savings."