What the Move to the ‘Cloud’ Means for Consumers and Marketers

Are consumers really finally starting to leave the hardware behind?

I don’t mean that people are going to get rid of their computers any time soon. Until we can “jack in” directly to our brains, we’re going to need some kind of hardware interface between our eyes, ears, hands, and the Internet. But some recent trends that show people moving away from specialized (or high-powered hardware) and to the “cloud” (define)may point to a future where we’re all online, all the time.

Some interesting data about the gaming industry and its declining console sales are one data point on the trend vector. According to industry data, video game console sales have declined 30 percent, the most since 2000. The only exception, not surprisingly for most of us, is sales of the Nintendo Wii. While down 45 percent since last year, the sale of Wii consoles are still way out in front of Xbox and PS3 sales. Even with these declines, however, 68 percent of U.S. households are gaming households, according to this report Entertainment Software Association report published by MarketingCharts.com.

People aren’t gaming less. They’re just changing where they’re doing it. While console sales continue to decline, the same studies found that 22 percent more people were doing their gaming online than previously. Even if you aren’t a gamer, this shouldn’t surprise you, considering the ubiquity of ads for multiplayer gaming services like Evony and the release of more and more “free” online gaming services like the new Quake Live, now in open beta from Id Software.

At the same time that gamers are moving away from expensive consoles (and their equally expensive games), more and more people are buying netbooks, according to Liliputing, a Web site covering the netbook sector. However, the jury’s still out as to whether or not consumers are augmenting or replacing their old computers with the smaller, lighter, lower-powered laptop-lites. One could argue that the recession is driving people away from higher-priced desktop and laptop PCs, but recent promotions from broadband wireless carriers like AT&T that bundle netbooks with “anywhere” broadband service for as little as $49 (and a $60 per month data plan), make it clear that the big players are behind the move away from “big” high-powered computers to smaller, lightweight devices that go anywhere. Heck, many have argued that the iPhone is really a mobile computer that has phone-like features (rather than the other way around). I tend to agree.

And if the old ways are being threatened by the move away from expensive hardware, OS titans Apple and Microsoft have to be a tad nervous about the crop of new “netbook-centric” operating systems (such as Jolicloud that move consumers even further away from the desktop and into the “cloud.” Relying on online applications and even online storage for documents and other office-like computer activities, this new crop of lightweight netbook operating systems, while a small blip on the radar now, are harbingers of things to come.

Why? Because if you follow the way that digital technology has changed just about every industry its touched (see the entertainment industry for a glaring example), the trend vectors seem to point to a continual move from (as Nicholas Negroponte once put it) “atoms to bits.” Records moved to CDs and on to MP3s. Movies moved from video tapes to DVDs to streaming services such as Netflix and Hulu. Documents moved from paper to floppy discs to local networks to the Internet. It’s inevitable that whatever becomes digital moves into the cloud.

So what does this shift to the cloud mean to marketers? Mainly it means more opportunities to reach customers across all aspects of their lives, rather than just when they’re in front of their Web browsers. It also means a blurring of the lines between what’s considered “mobile” marketing now (mainly on cellphones or PDAs) and what’s considered more “traditional” online marketing targeted to people sitting at a desk in front of a larger computer. While we’ll still need to reach them with the same kinds of messages we reach them with now, the more mobile nature of today’s bleeding-edge consumer and tomorrow’s “average” consumer means that we’ll have to pay more attention to where they are physically as well as what they’re looking at and when. We’ll also have to take into account that the always-on consumer is going to have a lot more chances to make their voices heard and we’ll have to respond by really understanding how to manage brands and reputations in an increasingly mobile, social space.

It’s sure gonna get interesting!

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