Apple and the Cloud: A Cautionary Tale


The consumer’s electronic world as we know it today is shared between Apple, Google, Facebook, Twitter, and a handful of other popular brands. Most offerings must ride on these platforms and play by their rules. Yet I believe our current interest in—and use of—this ecosystem will peak in 3-6 years, and what awaits each of these companies on the other side must be a completely different business.

In this article, I will focus on Apple’s transformation. I want to lay out some areas where Apple is weak and some trends that threaten the business model, and show that strategy and vision are as important as execution. Just as Apple is wondering what to do with its mountain of cash, the company may want to dedicate a paltry $1 billion to building a company that eventually will replace the Apple we know today.

Digital is Done

We have spent the last twenty years making everything digital, and now that transformation is 99 percent complete. Twenty years ago, Sony was a much larger company than Apple was, because Sony made high-tech analog products. As Steve Jobs pointed out, Sony didn’t make the transition to digital, and Apple surged as Sony slumped. Now that everything is digital, there are two more waves ahead:

1. Analog
2. Digital
3. Meaningful
4. Adaptable

This isn’t about devices, it’s about data. To make our digital data meaningful we need to add descriptive information (called metadata) that will help machines make sense of the digital world (that’s what my book, Pull, is about). To make our environment adaptable, we’ll need to build an entirely new information infrastructure, best shown by a few examples.

Let’s look at maps. For the past thousand years or so, maps were printed pieces of paper. If you had the paper, you could look at the map. Now take the same map and scan it in and make it digital, so you can see it on your iPhone or iPad. Is that what people want? No. As Google Maps shows, we can make the underlying map meaningful by layering on roads, cities, elevations, gas stations, restaurants, hotels, etc. And we can add more meaning by tagging locations with relevant information—populations, weather, road conditions, photos, etc.

Think about documents. Today, most of our documents are digital. They come as PDF/Word/Excel attachments into our email in-boxes. Yet the information value is still trapped inside a document meant for humans to read. When we can extract and use the information without having to read, re-enter, and translate it, we’ll get rid of documents. Instead we’ll have meaningful data we can use and re-use easily.

Think about video. Today, networks broadcast baseball games in digital high definition. They add live statistics along the top in a data bar. Even though it’s digital, it’s still just a single video signal. To make it meaningful, we’ll separate the various video and data feeds and let viewers combine them however they like. For example, you may want all the statistics and player profiles running on your tablet as you watch two side-by-side video feeds of your choice on the big screen. You may want to choose from different commentators, participate in a few chats, ask a question, or keep track of your fantasy league team at the same time.

Not only does this make the experience more personal, it makes the video contents much more findable later—one could easily search for all the at-bats by a particular player, all the home runs, fast balls, strike outs, walks, etc. As we make data more interoperable, it will be woven into products we use every day, making them much more capable than today’s “smart” phones.

Once our data is meaningful and interoperable, we can start to make more aspects of our lives programmable, using the entire web as a resource. An example I give in my book is that individual buildings can plug weather data right into their control systems, so a building responds not just to the conditions outside but can prepare for what’s coming. Highways can redirect traffic automatically after an accident occurs. Hospitals with critical patients can find the nearest resources necessary in seconds, not hours. Airplanes can adapt to route conditions. Our home can start heating when our car is 20 minutes away.

As more of our digital data becomes programmable, the true “web” of interconnected services starts to give us much more power than we get from our computers, apps, and closed systems today. Contracts transform from documents to software that can … Next Page »

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David Siegel is an author, consultant, and investor focusing on the future of technology, the Internet, and business. He has written three bestselling books about the Internet and started one of the first web design and strategy agencies, Studio Verso, which he sold to KPMG in 1999. He is an active angel investor and advisor to startups and the author of Pull: The Power of the Semantic Web to Transform Your Business. Follow @

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10 responses to “Apple and the Cloud: A Cautionary Tale”

  1. Old Indie says:

    Great article. BUT, if things work out as you envision, we have lost control of our world.

    Consider this-

    Here is a call to the White House in the year 2014

    “Want that 777 full of people on the London to NY flight 24 to land safe? Good, wire us a million dollars. Or the plane, which we hacked into and now control, drops out of the sky. And, we also pay off Putin and his friends, so do not bother to find us. The Russian government will deny we are in the country.

    Nuclear power plans? Grids? Cell phone networks? You wanted them to be intuitive, and they are. They are also complicated and fraught with holes. We know were the holes are because we paid the designers to tell us. They are a bunch of poor Indian and Chinese coders. They are finally getting a decent salary, thanks to us. All sitting in a Swiss bank account. So, next week we will want $10M NOT to shut down the east coast electric grid.

    Oh, and Iran called yesterday. They offered us a LOT of money for some help destroying the economies of Israel and the US…..”

  2. Rocio Ramos says:

    I work for a cloud provider and even I am still cautious with new technology ventures. I do often question if technology is moving too fast and if the benefits outweigh the costs.