Cloud storage provider Funambol offers a white label cloud storage solution to some of the largest operators on the planet, but the company admits that only “a fraction” of wireless subscribers are using their operator’s personal cloud service. Funambol says projections by its carrier customers typically estimate user base penetration at little more than 10 percent over the next 3+ years.
Seemingly everyone admits that operators are not offering cloud storage as a revenue generator, rather it’s solely about keeping customers within the company ecosystem and reducing churn.
Still, cloud storage looks very much like yet another missed opportunity for the carriers and it’s really amazing that they’ve let this one slip. We heard the messaging years ago. Carriers have some of the most trusted brand names on the planet, they can offer seamless integration on the device, and content can easily be shared over their networks. And yet dedicated cloud storage providers, as well as social media sites have emerged as the end user’s chosen safe haven for all their digital property.
Examples of just how the content storage strategy creates stickiness are numerous. With the launch of its latest Surface tablets, Microsoft included 200 GB of free cloud storage for two years. Great! With seamless integration of SkyDrive and Microsoft Office 365, as well as Windows Phone devices, end users can create, store and share 200 GB of content. The catch? Oh yeah, once you have all those pictures and important documents stored in your 200 GB of SkyDrive real estate, you’ll have to pay $100 per year after your two free years are up. At that point, the customer has a choice. They can either attempt the tedious task of downloading all that stored content to a local drive and then upload it to another cloud provider, or they can suck it up, pay the $100 and stick with the Windows platform for awhile longer.
Gartner describes just the kind of strategy that the carriers neglected to implement, saying that consumers would “first try the basic package that is offered free by online backup companies. These services will be offered as apps on tablets, smartphones and broadband-connected TV because of partnerships between OEMs and online storage and sync companies.”
Apple, Google, Facebook, and Amazon are all doing exactly the same thing, each with different pricing and strategies. Either way, they’re creating a budding new industry, as well employing one of the most effective ways of keeping customers loyal to their brands and products. Unfortunately, the carriers didn’t get in on the ground floor and didn’t do enough to encourage their customers to store information with them from the beginning.
Sure, AT&T and Verizon and others did eventually offer cloud backup and storage, but they did it after customers had established allegiance to services like Box, Dropbox and Google, all of which are carrier agnostic. And perhaps that is exactly why customers have chosen NOT to store their content with their carrier, because they are all willing to switch should the right offer or new service plan come along.
All is not entirely lost in this space for the carrier. Many consumers have yet to move their data to the cloud and there’s still an opportunity for operators to take advantage of this growing market. While only seven percent of consumer data was stored in the cloud in 2011, Gartner predicts that 36 percent of all personal pictures, videos and other digital documents will be stored in the cloud by 2016. The real trick will be figuring out how to convince consumers that the digital vaults residing at AT&T, T-Mobile, Sprint and Verizon are the right place for their content.