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Are the Mobile Cloud and Mobile Data Caps Mutually Exclusive?

| June 21, 2011 | Mobile Ecosystem
| Analyst: Peter Jarich, Service Director, Mobile Ecosystem
  and Service Provider Infrastructure

Click here to download report (100 KB PDF)

For the past year or so, cloud services have been a hot topic in the mobile space, and it is not difficult to understand why. While a loose definition of the “cloud” (network-based services and applications) is now well understood and cloud business models and technologies have matured, mobile technologies have also advanced to the point where the cloud can be truly “mobilized.” Specifically, today’s 3G and 4G technologies provide a sufficient pipe to deliver meaningful connectivity to cloud applications. At the same time, the proliferation of connected devices has driven an interest in device-independent access to content and applications, opening up the door for the sale of cloud services to end users.

Throw this all together and you get new services such as Amazon’s Cloud Drive/Player, Google Music, and Apple’s iCloud… on top of existing “over-the-top” mobile applications that have already gained traction: Hulu, Netflix, Pandora, Spotify, Photobucket, etc. However, while wireless network technologies (along with device capabilities) have evolved to support cloud services, it is a different story when you consider wireless business models. In the early days of mobile data, unlimited usage plans (“all you can eat”) dominated, at least for smartphone users. More and more, however, these plans are giving way to capped usage plans, with operators actively investigating (planning) innovations such as service tiering and data plan sharing across multiple users (aka, data multi-SIM; see Data Multi-SIM Market Heats Up, Targets “Multi-Device” Acquisitions”, June 3, 2011).

To be clear, it is not a given that all carriers will be moving away from unlimited, undifferentiated data plans. Many, however, are seizing the opportunity to link the launch of new technologies such as LTE to further monetizing their mobile broadband services with these techniques. In other words, at the same time that new bandwidth-intensive applications are rolling out, operators are looking to set expectations around the amount of data users can consume for a given price. That these two trends would seem to be on a collision course is obvious. The strategies operators and vendors can put in place to mitigate any potential friction, then, are worth further investigation – if only to execute fully on cloud opportunities and keep customers happy.


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