Number Of Cloud Consumers Predicted To Reach 3.8 Billion By 2018

The number of consumers accessing cloud-based services is expected to reach 3.6 billion by 2018, according to a new report by Juniper Research, but it warned that vendors face a challenge to generate a profit and that net neutrality rules could threaten existing business models.

It is estimated that 2.4 billion people access cloud services during 2013, but researchers anticipate that the popularity of streaming video, music and gaming products, as well as cloud storage platforms will result in increased adoption.

However they also warn that there are significant challenges that must be overcome during the next five years if this is to be realised.

Cloud challenges

Juniper says vendors such as Box, Dropbox, Google and Microsoft have all been successful in attracting customers to their cloud storage offerings but have been less effective in converting free users into paying subscribers.

This, along with intense competition which keeps prices down, is making it hard to generate revenue, with the report noting that Canonical recently exited the market because the current price war was seen as unsustainable.

Music streaming services such as Spotify are seen as more successful in generating revenue thanks to low subscription costs and large catalogues of content that would be impossible to download onto local storage. However they are struggling to make a profit and have yet to find a balance of offering premium features without compromising the free service.

Net neutrality warning

Gaming is one area which Juniper expects to see grow, with the likes of Playstation planning cloud subscription services. However it warns that these could be hampered by slow connections and latency issues.

Such a scenario could be exacerbated by plans to allow US ISPs to charge streaming sites such as Netflix additional fees to ensure their users have access to extra capacity. The report warns against proposals by the US Federal Communications Commission (FCC) to permit the practice, claiming they could threaten the whole over-the-top (OTT) model in the country.

Netflix, which has been one of the most successful streaming companies, has been the most vocal critic of the FCC plans, claiming they threaten the principles of net neutrality. The company currently has 48 million subscribers and quarterly revenues of $1 billion, while it is also planning to increase subscription fees to cover the cost of acquiring and creating content for its users.

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Steve McCaskill

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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