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How the Cloud Could Save Hardware Manufacturers in 2012

Considering the mountain of shiny new gadgets paraded at the Consumer Electronics Show in Las Vegas, you’d be forgiven for thinking that the technology industry is booming. Well – in some ways, electronics manufacturers are doing reasonably well, but the gadgets aren’t entirely responsible for that.

Manufacturers of televisions and computers are suffering in a fiercely competitive market amid a global recession. The prices of common devices like televisions are falling fast, and new high-end products – such as super-slim laptops, dubbed ‘Ultrabooks’ – are not yet selling in sufficient numbers to make up the shortfall in revenue.

In the US, Amazon famously launched the Kindle Fire last year, reportedly selling it at a loss. Why would Amazon go to such great lengths to promote and market a device which actually loses them money?

The answer is in the cloud. As hardware prices go down, retailers are forced to squeeze their margins to the brink of survival. Software is everything. Not just any software: the kind of software that provides a vital service to the owner of a mobile device. Retailers are keener than ever to sell cloud services alongside their hardware to maximise their revenue. Apple recently launched iTunes Match, a cloud service to match stored mp3s on all iOS devices. The Amazon Kindle Fire has its own app store which cuts off access to competitor apps and services and favours Amazon’s own selection. Since the Kindle Fire has a very small amount of storage space, this forces buyers to use Amazon’s streaming services for their media. Over time, this remote storage and streaming model is likely to become commonplace.

The computer that guided Neil Armstrong and Buzz Aldrin to the moon was famously no more powerful than a scientific calculator (although the software it ran was considerably more sophisticated). Since then, devices have become more and more powerful, smaller and smaller. The miniaturisation of technology has now reached a limitation: the size of our hands. Our hands wouldn’t be able to use devices if they were much smaller than they are now. Instead of continually compacting smartphones into smaller and smaller boxes, the emphasis now is on expanding the usability and capability of our smartphones while keeping them roughly the same size. Battery power is now more important than storage capacity for many people. A better battery provides a better experience: content can be stored hundreds or thousands of miles away and streamed for hours. The only question is this: can we cope without access to the cloud?

Analysts believe that the shift towards the cloud has been inevitable for some time. Michael Miller, a respected IT blogger, predicts that more and more of us will use tablet devices to access the internet over the next few years. The way we communicate is likely to be drastically different as a result. Hosted Exchange is likely to be more common in organisations where a wide range of devices need to access a mailbox resource from any location. Luckily, Hosted Exchange 2010 is cost-effective and flexible enough to make the cloud just as useful for email as it is for streaming and storage.

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