Classic David vs. Goliath: Operator vs. OTT Personal Clouds

Hal Steger : Thinking Out Cloud
Hal Steger
Vice President of Worldwide Marketing at Funambol. 20+ years of marketing & product management experience at high-growth, innovative global software companies.
| This blog is about personal cloud solutions, technology, trends and market developments. Its scope is to comment on and discuss several aspects of personal clouds.

Classic David vs. Goliath: Operator vs. OTT Personal Clouds

Who's winning the personal cloud war, over-the-top (OTT) services such as iCloud, Dropbox and Google Drive, or operator clouds?

It is normal to assume it's OTTs, as the sheer volume of news about them dwarfs operator clouds. On a personal level, when's the last time you heard someone say, "I was using the XYZ [operator] cloud"?

Are OTT clouds really dominating personal clouds? A look at the numbers reveals otherwise. Although cloud providers do not regularly publish their number of users, if you follow the companies, an educated guess is possible. Recent analysis suggests that OTTs have 2B personal cloud accounts, while mobile operators have more than 3B.

How is this possible, you say? Aren't operator clouds just glorified mobile backup? To put this in perspective, consider how OTT providers and their clouds have evolved:

  • Apple embeds iCloud in iOS devices and Macs (750M accounts)
  • Dropbox started off on computers and migrated to mobile (500M accounts)
  • Google started online and migrated to mobile (350M accounts)
  • OneDrive is reincarnation #3 or #4 of legacy Microsoft online services (375M accounts)
  • Amazon, other than Kindle for e-books, is not a major mobile player (25M accounts)

Contrast this to MOBILE operators, of which there are nearly 500 worldwide with 6 billion mobile users. A good percentage of operators now provide personal clouds, for both smart and feature phones. If operators don't know how to offer a personal cloud to mobile users - their primary customer - nobody does. While operators are not software companies like OTTs, there are software companies that focus exclusively on white-label personal clouds to enable operators to effectively compete against OTT clouds. OTTs other than Dropbox have dozens of products such that their personal cloud is more of a sideline than a focus.

What is the significance? Many people use both OTT and operator clouds, for different reasons. It's not an either-or situation or winner-take-all market. Recent research shows that operator clouds are one of the best "churn-busting" tools an operator can use. Operator clouds are much more than mobile backup or a cloud drive, they help people simplify and enrich their daily lives.

Operator clouds will continue to play a major role in the lives of billions of people. Although you may not hear much about them, David is fighting the good fight.