Why is Apple seemingly behind in the cloud? This isn’t a new question (I’ve pointed out their lagging position for a decade), but it’s perhaps a serious issue now that it’s clear that the cloud is playing a growing role in IT. Not only that, the cloud is impacting application development. One could argue that evading the cloud will become more and more difficult for Apple, so what might it do?
Protocol did an article asking why Apple seems to be hiring cloud types, especially people with container/Kubernetes skills. Obviously, iPads, iPhones, watches and consumer electronics, and even the Mac are hardly likely to be hosting containers. The moves offer a couple of possibilities, so let’s explore them to see if any make sense.
The one we can dismiss pretty quickly is that Apple intends to get into the server or hosting-platform business. These spaces are mature, they’re based almost entirely on open-source software, and it’s hard to see how Apple could plot a successful late-entrant strategy. Or why they’d want to, given the competition and the fact that the whole space is already under incredible open-model pressure. Apple is hardly an open-model company.
This argument can also be applied to another possibility, which is that Apple might want to focus more on open-source software for its own tools. The problem with that is that you can’t charge for it, and that again collides with Apple’s strategy. There are open-source products for Mac already, and it’s difficult to believe that Apple thinks that lack of them is somehow hurting Mac sales. Forget this one too.
That leaves some sort of cloud strategy. Going back to the point about Apple’s desire to build and rely on a closed ecosystem for profits, public cloud services would seem almost as unlikely a target as building servers or selling platform software like a Kubernetes ecosystem. In addition, jumping into public cloud would be an enormous gamble from a business perspective because of the first-cost challenge. The cloud competitors had the first-mover advantage, and they’re highly built out. Apple could hardly start small, and to match the scope of competitors would require a mind-boggling (and Street-frightening) investment.
Of course, we can’t assume they’re starting a programmers’ relief effort for aging Kubernetes experts either. There has to be some cloud connection, and what I think is left is that Apple is going to deploy cloud infrastructure for its own service mission. The question would then be “What service?”
It’s possible that this is nothing more than a desire to enhance their App Store model. Many Apple insiders say that the current App Store is behind the times in terms of architecture, and could certainly use an upgrade. Apple is expected to become more dependent on recurring sales to current customers as the refresh rate on popular things like smartphones slows. However, some of the key hires recently seem to come more from a broad cloud-platform background. That, to me, suggests that Apple is planning to build their own cloud infrastructure using generalized tools, which means that they have a generalized mission for it. It’s not a service, except in the sense that they’d likely start with one specific one, but services.
Perhaps, the obvious candidate for the starting point of an Apple cloud is streaming video, which of course Apple already offers in the form of Apple TV. Amazon and Google already have their own streaming services, and during the pandemic both companies got a lot of street creds simply by being associated with what customers (yes, sometimes in desperation) tuned into. But again, those key early hires didn’t seem associated with streaming, but with more generalized cloud. Streaming video differentiation would have to be based on content, not on delivery technology. Also, Microsoft is perhaps the arch-rival to Apple among the cloud providers, if you look at the broad business targets of Microsoft and Apple and not at “the cloud” in particular. Would Apple take a swipe at competition in the cloud with a strategy that their arch-rival doesn’t have? Probably not, but there are also persistent rumors that Microsoft has been very quietly exploring the idea of streaming services.
I don’t think video is the starting point Apple would pick, though. Their activity seems too container-focused, so I’m inclined to think that what Apple has in mind is a new device or device set that’s linked to an Apple-cloud-hosted set of services. I also think they’d link this new stuff back to their current products, particularly the iPhones, to create the familiar Apple pull-through-your-friends symbiosis. What might this new stuff be?
Perhaps IoT. Apple launched HomeKit in 2019 in what was clearly a counterpunch with Amazon and Google initiatives. Late that same year, they joined the ZigBee alliance (along with Amazon and Google). Microsoft has a big Azure IoT initiative, and of course Amazon and Google have likewise. So far, Apple has seemed to target the “intelligence” of IoT more than the devices. Amazon and Google have some IoT devices, too. A set of home IoT devices for Apple could make a lot of sense, and more sense if it were linked with a set of subscription services that related to the devices and their role in Apple’s overall ecosystem (both HomeKit and Apple overall).
Apple Watch is already an IoT device, providing health monitoring, exercise monitoring, etc. Since Amazon and Google already have doorbell/camera stuff, it seems likely Apple would consider the same stuff as table stakes. Might they also then build ZigBee devices of their own, and focus for differentiation on the Apple ecosystem in the cloud? Might they even work to sell that ecosystem as a service to non-Apple users (perhaps a bit crippled, of course!)?
There’s a lot that cloud intelligence could do for IoT. Security is a good example, and so is control of lighting, TV, music, appliances, and so forth. The more stuff you can sense and control, the more logical it is to provide for policies and policy sets that interpret sensor data and other “readable” stuff like time, temperature, etc. and then activate something. The longer the range of your IoT network, the more stuff can be in it, and the broader the set of things you can do with it.
Amazon is clearly heading in this direction with its Sidewalk initiative, announced last year as a kind of super-IoT protocol operating in the 900ghz range. The Sidewalk initiative seems aimed at bringing the “Ring neighborhood” concept into a more meaningful place by making it possible to share some data with others nearby. Add this to Bluetooth in phones and you can see how a community could be built, a community greater than the sum of its members. Does that sound like something Apple might like?
These communities live in the cloud, not on the sidewalk (nod to Amazon for naming, though!) Apple also loves AI and would like to leverage it, and this would be a perfect place to marry the cloud, AI, and IoT in one initiative. That it’s a priority for Amazon (and, according to rumor, Google as well), then so much the better. A little competitive scrum is just what Apple would like to see, to build buyer awareness. They then rely on their brand and its loyal base to do the rest.
This might actually help 5G IoT supporters. That concept has been mired in hypotheticals from day one, and in addition faces the classic chicken-and-egg issue of who builds a service without devices to use it and who builds devices with no service. If Sidewalk extends home IoT, then could 5G IoT extend Sidewalk and similar initiatives? It’s easier to extend a workable concept to a wider area than to start wide from scratch.
I think the most likely direction for Apple, if it indeed has cloud aspirations, is the IoT cloud. It’s hard to see what else they could do that’s consistent with their long-term, successful, marketing strategies.