Idc consumers and cloud services

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Idc consumers and cloud services

  1. 1. SURVEY U.S. Consumers and Cloud Services Danielle Levitas Michael DeHart Archana Ramachandra IDC OPINION In this years ConsumerScape 360 Survey, we asked consumers about their awareness and usage of and general concerns about consumer-oriented cloudwww.idc.com services. What is clear from the survey results is that the segments that are aware of and using personal cloud services are the most attractive technology demographics — those that are younger (18- to 34-year-olds), more affluent (household income of $75,000+), and more mobile (smartphone and tablet owners). In addition, we note theF.508.935.4015 following:  With less than 15% of U.S. respondents reporting being "very familiar" with cloud services, it is clear that the market is extremely nascent.  Consumers have numerous concerns about cloud services, with cost being theP.508.872.8200 current leading inhibitor; however, pricing is also in its infancy, and companies can gain traction by offering more flexible services with larger-than-average free baseline offerings.  Education and general awareness building of cloud services is greatly needed.Global Headquarters: 5 Speen Street Framingham, MA 01701 USA IDC expects awareness of cloud services as a category to grow dramatically over the next couple of years while confusion over consumer cloud offerings specific features and capabilities remains, given competing and conflicting messaging from various players; robust yet simple offerings need to be developed and messaged by new participants.  We believe the opportunity associated with consumer cloud services is tremendous as the mass market begins to understand and use these services and as these services utility expands with individuals growing dependency on more devices. Filing Information: July 2012, IDC #235199, Volume: 1 ConsumerScape 360: Survey
  2. 2. IN THIS STUDYMethodologyData for this study comes from IDCs ConsumerScape 360 Survey, fielded February–March 2012. The total sample size for this study is 4,068 U.S. consumer householdsand is representative of consumers who own and use any major consumerelectronics devices and have access to the Internet from home or elsewhere (thelions share of U.S. households).Weve analyzed results by age group, by income group, and by consumers who owna smartphone and consumers who own a tablet to better understand what types ofconsumers are most informed about — and using — cloud services.Note: All numbers in this document may not be exact due to rounding.SITUATION OVERVIEWOver the past five years, the technology industry started ramping up cloud offerings,and the term cloud computing began to gain mindshare as a new architecture todeliver software, services, and infrastructure as a service — largely from anenterprise perspective. Yet, long before we started to use the term cloud, consumerswere using online, cloudlike services for email, photo sharing, content streaming, andmore. Its really been over the past 12–18 months that the momentum around cloudofferings for consumers began to take off, where we saw mainstream press beginwriting about personal/consumer cloud services as more and more of these servicesbegan to launch and gain users. This attention to personal cloud services rose asmany offerings to manage multiple kinds of media across multiple device typesramped up from companies like SugarSync, Dropbox, and Box.net. Of course, withthe launch of Apples iCloud in the fall of 2011, the mass market started to beintroduced to the concept en masse.U.S. consumers show a wide range of familiarity, usage, and comfort level with cloudservices — not surprisingly, results are varied by age group, device ownership, andhousehold income level, among other demographic and socioeconomic factors. Aplethora of barriers to and drivers of cloud service adoption exist, ranging from cost-of-service concerns to trusting the security of cloud in general and cloud serviceproviders specifically. Younger consumers, higher-income consumers, and "latest andgreatest" device owners are all tier 1 targets in this market because of a myriad offactors, as laid out in this section.Starting with general familiarity with cloud services, we find that 18- to 34-year-oldconsumers, higher-income consumers (those with household incomes of $75,000+),and smartphone and tablet owners (particularly tablet owners) are most familiar withcloud services. Among consumers 55+ years old, nearly 70% indicate that theyvenever heard of cloud services or have only heard the name and dont know anythingspecific about cloud technology and consumer offerings. Comparing this withconsumers 34 years old and younger, the results are dramatic as among this younger©2012 IDC #235199 1
  3. 3. consumer group nearly 60% are somewhat to very familiar with cloud serviceofferings, about double the rate of consumers 55+ years old. This is likely due to aconflux of factors including device ownership (younger consumers being much morelikely to own devices that utilize cloud services in a direct and obvious manner, suchas smartphones and iPads) and wanting to keep abreast of the latest technologytrends, as well as younger consumers being more dialed into and involved withtechnology-related media, including blogs and other technology news sources. Theseresults are laid out in Figure 1.Consumers also have strong concerns about adoption of cloud services, even thosewho are familiar with cloud offerings. Weve assessed the impact of various potentialbarriers to cloud adoption among those who are at least somewhat familiar with cloudofferings, as shown in Figure 2.FIGURE 1Consumer Familiarity with Cloud Services by Age, DeviceOwnership, and Household IncomeQ. Do you use the following services?n = 4,068Base = U.S. respondentsSource: IDCs ConsumerScape 360 Survey, 20122 #235199 ©2012 IDC
  4. 4. FIGURE 2Major/Significant Barriers to Cloud Service AdoptionQ. How much of a barrier are each of the following to cloud adoption?n = 4,068Base = U.S. respondentsSource: IDCs ConsumerScape 360 Survey, 2012The primary potential barrier to cloud adoption among U.S. consumers is the cost ofcloud services, followed very closely by concerns about security of files and trustingcloud providers. Given that only about 14% of U.S. respondents reported they were"very familiar" with cloud services, we believe that the high degree of concern forissues like cost has more to do with the lack of awareness and knowledge of theseservices by the broader respondent base than a true concern over potential barrierslike cost.Interestingly, reliability/speed of Internet connection via PC or smartphone, ability touse cloud services across multiple connected devices, and the ability to move filesbetween cloud providers are far less severe in terms of being potential barriers thanare the primary concerns of cost, security, and trusting providers. We believe that partof the reason why reliability/speed of Internet connection, ability to move files toanother provider, and ability to use services across devices arent of greater concernis because most users have yet to leverage personal cloud services to their fullpotential where they have a dependence on them across multiple devices/OSs andacross multiple locations, and we believe users to date have only limited content/datastored in personal cloud services (given most people who use the services have 2–5GB of free access versus a replica of their files in the cloud). As consumers usageof personal cloud services grows and deepens, we expect these issues will be onesthat providers will increasingly address (and most continue to build out devicecategories and OSs) to remain competitive. Potential barriers related to trusting theprovider, security, and confusion over services offerings will be ongoing challengesfor any player in the personal cloud space.©2012 IDC #235199 3
  5. 5. A deeper look at the top barriers to cloud adoption (cost of cloud, security of files, andtrusting cloud providers) shows that these barriers can actually become drivers ofcloud adoption, if targeted to the right audience. Figure 3 takes a deeper look at thetop potential barrier of cloud service adoption — cost of cloud service.FIGURE 3Barriers to Cloud Service Adoption by Age, Device Ownership,and Household Income: Cost of CloudQ. How much are each of the issues below a barrier to adopt cloud services? Cost of cloud.n = 4,068Base = U.S. respondentsSource: IDCs ConsumerScape 360 Survey, 2012Cost of cloud service is the biggest potential barrier to adoption among the generalpopulation of U.S. consumers (with 56% indicating it was a major or significantbarrier) (refer back to Figure 2). In looking at the cost of cloud from the other side ofthe fence (refer back to Figure 3) (i.e., consumers for whom cost of cloud is either nota barrier at all or only a slight barrier), we do find significant market opportunitiesamong a highly lucrative subset of U.S. consumers. Expectedly, the majority of thehighest-income consumers in the United States (those making $150,000+ perhousehold) indicate that cost of cloud isnt a prohibitive barrier. But we also find thathalf of consumers aged 18–34 years and half of tablet owners indicate that cost ofcloud is not a driving prohibitive factor. Smartphone owners are also less concerned4 #235199 ©2012 IDC
  6. 6. about cost of cloud, though slightly more concerned than tablet owners are.Expectedly, lower-income consumers and older consumers are most concernedabout the cost of cloud services.Delving further into the topic of cost of cloud, as its the main potential barrier to cloudservice adoption, weve also assessed how PC and smartphone owners perceive thecost of cloud services relative to the cost of purchasing apps. Specifically, we asked3,900 PC/smartphone-owning U.S. consumers how strongly they agreed or disagreedwith the statement "cloud/online applications typically cost less to use thanpurchasing applications to run off my PC/mobile phone." Results show clear concernon the behalf of consumers in terms of cost of cloud services, as shown in Figure 4.Figure 4 shows clearly that there is very little consensus on the consumer side interms of belief of the expense of cloud services being more or less than the cost ofapps. While the majority of consumers are neutral on this statement, there are moreyounger consumers and high-income households that agree that cost of cloudservices is less than that of apps. Most importantly, when you consider tablet ownersspecifically, 25.5% believe that cloud services cost less than apps and 18.7% believethat apps cost more than cloud offerings, leaving the vast majority (55.8%) neutral onthis topic. Smartphone owners are exactly split down the middle on the issue of costof cloud relative to the cost of smartphone apps. Given that most apps range in pricefrom free to several dollars and cloud services have a baseline offering that is free, itis reasonable that respondents are largely neutral when comparing costs of apps andcloud services.Results for the next major potential barrier to cloud service adoption —concernsaround security of files — are shown in Figure 5, which indicates that there are alsogroups among which this potential barrier may be more of a driver than a barrier (i.e.,there are groups that believe security of files when using cloud services is very good).©2012 IDC #235199 5
  7. 7. FIGURE 4Perceived Cost of Cloud Relative to Cost of Apps by Age,Device Ownership, and Household IncomeQ. Cloud/online applications typically cost less to use than purchasing applications to run off my PC/mobile phone.n = 3,900Base = U.S. respondents who own a PCSource: IDCs ConsumerScape 360 Survey, 20126 #235199 ©2012 IDC
  8. 8. FIGURE 5Barriers to Cloud Service Adoption by Age, Device Ownership,and Household Income: Security of FilesQ. How much are each of the issues below a barrier to adopt cloud services? Security of files.n = 4,068Base = U.S. respondentsSource: IDCs ConsumerScape 360 Survey, 2012Results indicate that there is a direct relationship between concern of security of filesand age (in that older consumers are more concerned about security than youngerconsumers are), while there really is no clear direct relationship between concern ofsecurity of files when using cloud services and household income level. Among tabletand smartphone owners, results are pretty evenly split — about half of smartphoneand half of tablet owners believe security of files is a significant/major barrier toadoption and about half believe its not a barrier at all/only a slight barrier.Given that more than 1 out of 2 respondents view security of files as a major orsignificant barrier to the use of cloud services, providers will have to message theirsolutions security as a central competency and leverage technologies thatdemonstrate users have strong, simple controls over their contents access.The third top barrier to cloud adoption is trusting cloud providers themselves (52% ofU.S. consumers), and Figure 6 shows results when this barrier is further dissected bydemographic and device-specific owners (smartphones and tablets specifically).©2012 IDC #235199 7
  9. 9. FIGURE 6Barriers to Cloud Service Adoption by Age, Device Ownership,and Household Income: Trusting Cloud ProviderQ. How much are each of the issues below a barrier to adopt cloud services? Trusting cloud provider.n = 4,068Base = U.S. respondentsSource: IDCs ConsumerScape 360 Survey, 2012Results clearly show that younger mobile consumers are much less hesitant to trustcloud providers, a likely function of younger consumers typical embrace of newtechnologies in general, demonstrated by younger populations use of online servicesand social media. Smartphone and tablet owners are equally split on this issue, whilethere is no direct relationship with trusting cloud providers and household incomelevel, with the exception being that the highest household income consumers aregenerally more trusting of cloud service providers. This is likely more of a function ofmore affluent users having more technology (devices, digital services, etc.) in theirlives, hence a greater comfort and dependency level on it.In terms of who is using consumer cloud offerings, there is still a large degree ofconfusion in the consumer mind, with many people using cloud services but notrealizing it. To get past this confusion, weve assessed the usage of cloud servicesamong consumers at least somewhat familiar with cloud offerings (see Figure 7).8 #235199 ©2012 IDC
  10. 10. FIGURE 7Current Use of Cloud ServicesQ. Do you use a cloud service to store and/or get remote access to your files/data/photos, etc.?Base = U.S. respondents who are somewhat/very familiar with cloud offeringsSource: IDCs ConsumerScape 360 Survey, 2012We find that more than 50% of PC and/or smartphone owners in the United Statesare already using cloud services of one type or another, though the type of usagevaries considerably. Out of those who use cloud services, the majority use it forpersonal content/services only or primarily for personal content/services, with a verysmall minority using cloud for work or work-personal mix (but supplied by employers).We believe that had we listed a range of specific services (beyond the broaderpersonal cloud providers) and included premium content services that stream mediato users or allow them to share photos and so forth, the percentage of "No"responses would have fallen dramatically. That being said, the purpose of these initialquestions was to understand general awareness levels and attitudes toward theconcept of cloud and personal cloud offerings for managing ones digital information.Looking at smartphone and tablet owners specifically, as shown in Figure 8, we findrates of cloud service usage are much higher than the general PC-owning population,particularly among tablet owners, who are 13% more likely than PC owners to beusing cloud services already. Both tablet and smartphone owners are more likely thangeneral PC-owning counterparts to use cloud for personal use only, with tabletowners being about 5% more likely than smartphone owners to use their cloudservice on their tablet for personal use only. This makes sense due to a large numberof employer-supplied smartphones as well as the high rates of dual work-personalusage among smartphone owners.©2012 IDC #235199 9
  11. 11. FIGURE 8Current Use of Cloud Services by Smartphone andTablet OwnersQ. Do you use a cloud service to store and/or get remote access to your files/data/photos, etc.?Base = U.S. respondents who are somewhat/very familiar with cloud offerings and own a tabletor smartphoneSource: IDCs ConsumerScape 360 Survey, 2012FUTURE OUTLOOKCloud services come in many variants, spanning personal content storage,management, and synchronization and access to services that deliver premiumstreaming content. The survey questions just begin to scratch the surface ofconsumer attitudes toward personal cloud services. In the coming months, IDC will bedoing in-depth research on consumer usage of cloud services and forecasting thebroader market opportunity.10 #235199 ©2012 IDC
  12. 12. What the present data demonstrates is that there is reasonable awareness forconsumer cloud services among key demographics (wealthier, younger, and moremobilized users) but that the long-term opportunity is tremendous as the mass markethas yet to learn about or understand what these services are and how it can benefitfrom using them.IDC sees the longer-term potential for consumer cloud spanning both premiumcontent services and personal data services. As consumers own and use more andmore connected screens (expanding from PCs and smartphones to tablets and thenthe TV), access to and management of ones data and content will only intensify, andthe challenge of delivering a unified, secure, reliable, and affordable solution will beone that companies from across the ecosystem (from OEMs to telcos to online-onlyplayers to traditional software companies) will compete fiercely to gain share anddrive consumer loyalty and lock-in.ESSENTIAL GUIDANCEWhile consumers have reported barriers to the adoption of personal cloud services,IDC believes many of these challenges are more related to a lack of awareness andknowledge than anything else and that as vendors educate users about their offeringsand their benefits, these challenges will subside for many consumers.That being said, given the fact that usage of personal cloud services is more nichetoday, Apple is arguably going to set the broadest, most understood expectations forsuch an offering with its iCloud. While this is helpful in getting consumer awareness ofcloud higher, it creates a relatively narrow definition of personal cloud given it is AppleOS driven.The current crop of personal cloud providers have varying levels of awareness, butwe believe that as personal cloud offerings debut from service providers (which are ina very advantageous position given their network assets) and from major IT playerslike Microsoft, Google, and Amazon (not that Amazon is viewed as an IT player byconsumers), adoption will accelerate. Furthermore, storage vendors, softwarecompanies, and many others are launching offerings that will compete for mindshareas well.For vendors just entering this space, there are some things that can be done to makeones offerings more attractive. Given that cost is a top concern to adoption ofpersonal cloud offerings, making sure ones free baseline offering has higher capacityis a must-have (5GB is an absolute minimum and, we would argue, too low tocompete today against incumbents like iCloud and Dropbox). Also, we believe themajority of consumers will use more than one service, so providers need to developofferings that allow for the most flexibility across devices/OSs and allow for the mostrobust sharing of ones content and data regardless of file formats supported on agiven device at a given time (thus enabling transcoding and transrating whenappropriate) while having robust synchronization capabilities. Finally, security ofusers data will be of utmost concern long term, and demonstrating best-in-classprivacy and security will determine the long-term winners.©2012 IDC #235199 11
  13. 13. We will be exploring consumer sentiment of various companies that provide cloudofferings in the upcoming work we do, and we expect that we will see distinctsegments of consumers favoring smaller companies versus others that will favorlarge, established vendors or service providers given various levels of trust (or lackthereof).Personal cloud services are strategic for any company that delivers content toconsumers, sells multiple device types to consumers, offers key software or servicesto consumers, and so forth. Managing end users personal content and data is a long-term strategic opportunity that will drive a level of customer lock-in that will notpresent itself again for many years (even while enabling your users to move their datato another provider). IDC expects consumer usage of personal cloud services to notonly expand but become broadly and regularly used to enable the next wave ofseamless content and data access and personal and professional productivity.LEARN MORERelated Research ConsumerScape 360: The Global Digital Consumer, 2012 Worldwide Consumer Market Segmentation (IDC #235045, May 2012)SynopsisThis IDC study discusses results from the 2012 ConsumerScape 360 Survey, whichlooked at consumers awareness and usage of and general concerns aboutconsumer-oriented cloud services. The large growth opportunity seen aroundconsumer cloud hinges on its speed of growth in educating consumers about cloudsolutions (particularly with regard to education about security solutions and how theseare addressed through cloud platforms)."We believe the opportunity associated with consumer cloud services is tremendousas the mass market begins to understand and use these services and as theseservices utility expands with individuals growing dependency on more devices," saidDanielle Levitas, group vice president, Consumer, Client, and New Media. "Thatbeing said, U.S. consumers are still very unfamiliar with cloud services, are unsure ofwhen or where theyre already using cloud services, and currently only have amoderate level of trust in both cloud providers and cloud technologies."12 #235199 ©2012 IDC
  14. 14. Copyright NoticeThis IDC research document was published as part of an IDC continuous intelligenceservice, providing written research, analyst interactions, telebriefings, andconferences. Visit www.idc.com to learn more about IDC subscription and consultingservices. To view a list of IDC offices worldwide, visit www.idc.com/offices. Pleasecontact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) orsales@idc.com for information on applying the price of this document toward thepurchase of an IDC service or for information on additional copies or Web rights.Copyright 2012 IDC. Reproduction is forbidden unless authorized. All rights reserved.©2012 IDC #235199 13

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