Will iCloud Rain on Amazon and Google

When Apple announces a new product or service, the world listens. In short it was when CEO Steve Jobs introduced the company's new iCloud offering. Fans applauded. Critics sniffed that iCloud is merely content management, not real cloud computing. I doubt that most people care; typical Apple clients will just want to know what iCloud can do for them.

iCloud will store music, photos, apps, calendars, documents, email, and more online. It will automatically synchronize with multiple devices wirelessly. Apple calls it "the easiest way to manage your content." Jobs says iCloud will "demote" PCs. It will be a free service that replaces Apple's $99-per-year MobileMe offering. MobileMe syncs and stores email, contacts, calendars, photos, and files online and across multiple devices.

Another distinguishing feature of iCloud is its device-centric approach to the cloud. This approach has its advantages. It allows users to function digitally without being connected to the Internet. It as well reduces the need for expensive and limited bandwidth. Given that AT&T nevertheless hasn't completely fixed its bandwidth-related dropped-call problem, trying to stream music over its wireless network would only compound the situation. 

Information is powerFor Apple, Amazon, and Google, the cloud offers potential to profit from information. Knowing someone's location and interests is a powerful sales tool. Smartphones provide information about location. Searches, purchases, and emails provide information about interests. Amazon, Apple, and Google are working to gather this information by offering a must-have service. Here's an outline of each one's strategies:

Of course, not all information is created equal. Smartphones provide here-and-now location information, which can be much more valuable to retailers than ship-to addresses. Similarly, iTunes searches and purchases are primarily media and entertainment oriented. Searches on Google, Amazon, and Yahoo! pick up interest in purchasing a wide variety of goods. Purchases on Amazon involve a wide variety of goods, signal greater interest than searches, and create opportunities for add-on sales. 

All three companies' primary sources of profit are different. Amazon is a general store that sells digital and physical goods. Google profits primarily from selling ads. Having information about and access to users helps it sell more ads and increase its ad rates. Apple primarily sells hardware, software, and digital entertainment.

Better right than first Critics like to point out Apple is late to the cloud. It was late to the MP3 player, smartphone, and tablet markets, too, and that doesn't seem to have hurt it. More than a few iPod owners don't know iPods are MP3 players. That shows that getting something right can be far more powerful than being first. 

if it just worksThat's if iCloud works, clearly. The New York Times' David Pogue called its predecessor "MobileMess." The Wall Street Journal's Walt Mossberg called MobileMe "far too flawed to be reliable." The harsh words are surprising, since both tech columnists are typically Apple fans. My experience afterwards more than a year as a subscriber and dozens and dozens of hours of tech support is that MobileMe nevertheless just doesn't work.

Lot of hubbub among investors about cloud computing

Foolish takeawayThere's a lot of hubbub among investors about cloud computing. However the cloud has many facets. Apple's iCloud plan is about what has made the company such a raging success: its ability to offer compelling products and services.

In many ways, iCloud puts Apple on a collusion course with Amazon and Google. Apple is particularly good at locking in clients. The greatest inhibitor to repeating that success with iCloud is whether or not it just works. If it doesn't, that improves opportunities for Amazon, Google, and Android device makers just as Motorola Mobility and Dell .