The Cloud That Rains Money

We live in a time when you can pick up a tiny computer, ask it a question out loud and have a satisfactory answer provided in a matter of seconds. It’s amazing if you stop to think about it.

Voice-recognizing digital personal assistants have become commonplace. One such assistant is among the most important new features unveiled in Apple’s latest smartphone. Called Siri, it recognizes natural language questions and accesses a plethora of web services to provide an answer. Android-based phone users (like yours truly), on the other hand, have enjoyed voice recognition to navigate, search or compose messages since summer of last year.

Of course, the answers to the questions we ask — whether verbally or through text input — usually do not reside in the bits and bytes contained in our smartphones, tablets or PCs. They sit somewhere out on the other end of a network connection, in “the cloud” — usually stored at a data center.

However, whether residing in publicly available data sources or behind private firewalls, the total amount of data accumulation taking place is staggering. Truly, we are living in the “information age.”

According to technology market research firm IDC, more than 1.2 sextillion bytes of digital data were created and stored between the beginning of the “information age” and the end of 2010 — a number so large that it is as incomprehensible as the US debt. The amount of data has grown ninefold over the past five years alone.

However, like the national debt, the numbers show no signs of slowing down. IDC forecasts another 650% growth in total data by 2015. I’ll try to put the 2015 data into a little imaginary perspective. By my reckoning, if we stored it all as CD-ROM disks, we could build more than 33 stacks extending all the way out to the moon.

There are also new twists emerging in the data storage market. Earlier, I alluded to cloud computing — the delivery of computing as an online service, rather than a product — which has entered an explosive growth phase as well. Apple’s new voice recognition software wasn’t the only big news at the iPhone unveiling. Another major Apple initiative is iCloud, where users can store everything from pictures to videos to music all online.

Google, on the other hand, has delinked applications from end-user devices and placed them in “the cloud” instead. Google Apps allows users to access their documents and work on them regardless of whether they are using a traditional PC or a mobile device. Microsoft’s Office suite also includes locationless, Internet-centric functionality. Businesses are increasingly looking to cloud computing companies for the purchase of software and infrastructure as a service, instead of doing it themselves.

Clearly, innovative technology companies addressing the needs of the data storage market will benefit from these accelerating trends.

Regards,

Ray Blanco
for The Daily Reckoning