Demystifying cloud computing for consumers

Apple and Google are each rolling the dice on competing visions of cloud-based media, placing high-stakes bets on digital delivery of entertainment at a time when confusion runs high for such services.

The problem is, most of the people they want to market those services to only have a vague notion of what "the cloud" means.

"It's not just consumers and lay people who struggle with the cloud, it's experienced IT people who struggle with it," says Gartner analyst David Smith. "The whole idea from a consumer perspective is … it's supposed to be a magical cloud in the sky."

There's a huge digital disconnect. Only 40% of Americans understand such cloud services as Google Docs for documents, according to a report from market researcher Ipsos OTX MediaCT. Even fewer — 9% — actually use such services, according to the survey of 1,000 U.S. respondents.

Stakes are high for technology companies to define the consumer cloud. The winner gets the keys to the digital media kingdom. Forrester Research forecasts the U.S. market for personal cloud services will hit $12 billion and 196 million consumers by 2016.

For tech companies to reap benefits, they'll have to answer a nagging consumer question: What is the cloud?

In a way, the cloud is as old and simple as the Internet itself. The cloud is really just about accessing storage or software remotely from a computer via the Internet. It's a modern twist on an old concept of timesharing on giant mainframe computers dating back to the '60s, industry experts say.

Think of TurboTax online, the Internet-based tax preparation service from Intuit. Log on. Crunch numbers. File from TurboTax. That's a cloud service.

Or easier yet, consider uploading images on the photo-sharing sites from Google's Picasa or Yahoo's Flickr. "In some ways, consumers have been using the cloud for a long time. There's a million online photo galleries where you've been leveraging a Web-based cloud service," says IDC analyst Danielle Levitas.

Truth be told, the consumer cloud is simple. It's the many places we go on the Internet to access such things as Google's Gmail and Docs. That type of Web-based access is far different from using e-mail software such as Microsoft Outlook, installed on a PC, and Microsoft Word, which saves to a computer's hard drive.

The difference with Google is that you use its free online software and store your documents in the search giant's cloud. That's what keeps the brass at Microsoft up late at night, knowing that Google has given away online access to Docs, Calendar and Gmail — all software applications that mimic Microsoft's and is accessed over the Internet in the cloud.

Even Facebook is a cloud company. All those photos and comments that are uploaded via smartphone or computer are nestled in its cloud, or armies of server storage. To the user, it's just a visit to a popular website. But behind the scenes, your Internet activities are shuttled to massive data centers. Nothing is stored or lives on a person's PC or smartphone.

Think about those eggplants you recently harvested on FarmVille, the game from Zynga that operates on Facebook. Nothing about that game play lives on your PC. Your crops, your coins — it's all stored somewhere else: the cloud.

Cloud marketers

While consumers may unknowingly use a handful of cloud-based services, their concerns over privacy and security run high. The report from Ipsos said nearly 40% of Americans feel that saving to the cloud is not as secure or private as saving to a hard drive.

Apple, Google and Amazon have plenty of boilerplate security promises about their cloud services.

But that doesn't stop people from worrying about lost documents or privacy breaches that could nab credit card numbers on something as widely misunderstood as the cloud. Those concerns are only made worse by recent breaches of Amazon that left companies that rely on its cloud offline.

On the flipside, experts point out that there are risks to storing music, photos and other data on a laptop or PC. Devices are vulnerable to theft, loss or unrecoverable data damage.

"With the cloud, if your system does fry, there are copies out there," says Levitas.

The latest iterations of consumer cloud services promise to shuttle and store digital media for Apple, Google and Amazon. The cloud services come as use of smartphones and tablet computers is on the rise and record amounts of photos and data are being shared across Facebook.

But these emerging services will have to find ways to embrace the cloud without ostracizing consumers. Thus far, there's a general consensus that marketers have done a poor job of explaining the cloud to consumers.

Hazy perceptions of cloud services may require these companies to hone their pitch to be understood.

Cloud marketers may need to either educate consumers or stop referring to the cloud altogether, the Ipsos report says. Apple chose to embrace the cloud in its recent iCloud debut, while Google downplayed the cloud in its launch.

Apple wants to "brand (the cloud) and own it for sure," says Ipsos analyst Todd Board.

Google, on the other hand, chose not to make cloud-specific references when it launched its cloud-based Chromebook tablet computers. The search giant instead focused on such language as "nothing but the Web" to describe the services.

Ipsos says that influential consumer cloud players — Apple, Google and Amazon — will have to stay focused on fixing user perceptions.

Here's a look at recently announced consumer cloud services from the three key companies:

Amazon’s Cloud

Amazon was the first of the bunch to embrace the consumer cloud for digital media.

Its Cloud Drive is intended to help store music, videos, photos and documents at Amazon.com. The online retailer provides 5 gigabytes of free online storage. Those who purchase one album at Amazon's MP3 Store will be granted 20 gigabytes of storage for up to a year.