How Apple's iCloud Will Rain On Google's Parade

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Also see: Apple Touts iCloud, Mac Lion and iOS5

Apple’s iCloud service, expected to be unveiled next week, completes a perfect storm of features that could accelerate Apple’s growing dominance of computing and seriously undermine Google’s cloud strategy.

Apple CEO Steve Jobs is expected to announce the new service Monday at its Worldwide Developer Conference in San Francisco.

The company has spent the last two years secretly building a billion-dollar, 500,000-square-foot data center in North Carolina. The new facility is five times larger than its existing data center in New Jersey. Apple has also massively expanded data center capacity in Silicon Valley.

Everything about iCloud is officially secret, except the name. But I believe Apple will innovate on some neat tricks. They may, for example, enable constant backup of all user data and possibly synchronization across devices. (Apple is also expected to announce a new version 5 of iOS.) This would enable users to walk away from their PCs, then pick up where they left off on an iPad or even an iPhone. Lost or stolen devices would not involve the loss of data.

Apple will almost certainly offer the service to enable users to store iTunes-purchased music and movies, as well as personal data files like documents, e-mail, pictures and videos, then access them from iPhones, iPads, Macs or PCs.

One key aspect of the service will involve music, movies and TV shows, which Apple currently dominates with iTunes, but which both Amazon and Google intend to make inroads on with recently announced streaming services.

Early reports indicate, however, that Apple’s iCloud service will be superior to Amazon’s and Google’s in every significant way.

According to the Wall Street Journal, “people familiar with the matter” say Apple’s iCloud service will be “more robust” than similar services offered by Amazon and Google. Presumably that means it will be more reliable and secure, and possibly (OK, probably) easier to use.

Apple will have better selection for streaming music, at least initially. Apple has reportedly inked deals with Warner Music Group, Sony Music Entertainment, EMI Group and Universal Music Group. Amazon and Google had been hoping to compete with the iTunes juggernaut by forcing music labels to cut prices. As a result, neither company has successfully landed deals with the major labels.

With Apple offering bigger music, movie and TV platforms than Google, that company is hardly in a position to “force” studios to do anything. They’ll just deal with Apple.

Regardless of actual current deals, Apple is generally in a better position to negotiate such arrangements with music, movie and TV studios than Amazon or Google because the company is inclined to charge more, and also take stronger action to prevent piracy and unauthorized (unpaid-for) usage. Hollywood hates Silicon Valley, but they hate Apple the least.

Both Amazon and Google allow users to upload their existing music collections to the cloud, then stream on demand. Apple will go one better by offering a “scan-and-match” service. That means Apple will scan your system looking for music files, then make those available to you in the cloud without uploading. The same service will be offered, presumably, for TV shows and movies previously purchased on iTunes.

iCloud essentially erases Google’s main argument in favor of Chromebooks, at least as far as Apple is concerned. The argument is that your data is always safe, no matter what. And it seriously undermines Google’s long-standing cloud-based Google Docs service. Once Apple automatically duplicates everything into the cloud, Google Docs just doesn’t seem all that interesting anymore.

iCloud also has the potential to turn iPad into a real computer. Right now, you need to plug in the iPad to a PC before using it the first time. The device syncs with iTunes as part of the mandatory setup process. However, iCloud sync could serve as an alternative, allowing some users to use iPads as their one-and-only device. It’s also likely that updates will occur “over the air,” rather than via USB connection with a PC. iOS 5 and iCloud may set iPads free at last.

Speaking of real computers, it also makes Macs more appliance-like. Apple’s upcoming Lion version of OS X will offer two new features called Resume and AirDrop, which will restore systems to a specific point in time and enable Mac-to-Mac file transfer, respectively. This will all probably happen via iCloud. Rumors are circulating that iCloud may be a paid service, but offered free to Lion users as an incentive to both prospective upgraders and switchers.

A successful implementation of iCloud will undermine the strategies of many companies, from Microsoft to Amazon to all the gazillion startups trying to make a go at streaming content. But most of all, iCloud rains on Google’s parade.