The Internet Is Your Next Hard Drive

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Meanwhile, more and more sites offer simple online backup, without synchronization. These services are proliferating so rapidly in part due to online retailing giant Amazon's newfound interest in storage services. In March, the company introduced Amazon S3, an inexpensive online database service that software developers and startup companies can use instead of building and administering their own data centers. The service runs on Amazon's existing global server network, alongside its own e-commerce software and product data. Amazon charges a small fee for access to S3 -- $0.15 per gigabyte per month for storage, plus $0.20 per gigabyte per month for data transfer; but S3 is really intended to foster a new generation of Web services based around storage, say Amazon executives.

"We are trying to provide building blocks that free up innovators to innovate, and they have surprised us and in many cases amazed us," says Adam Selipsky, vice president for product management and developer relations in Amazon's Web services division.

SmugMug, a free online photo-sharing service, is one of Amazon's favorite S3 case studies. "They've said publicly that after switching to Amazon S3 they saved half a million dollars in capital hardware costs that they had expected to spend this year," says Dave Barth, product manager for Amazon S3. "That's a very big deal to them." And it's part of the reason SmugMug can offer its media-sharing services at a relatively low price: $39.95 per year for unlimited photo storage and 6 gigabytes worth of downloads per month.

How soon will such services challenge local storage on your hard drive or USB flash drive? "I suspect that neither one is going to go away, and in fact many of us will use online storage for backup," says Pang of the Institute for the Future. "We'll use keychain drives, extra space on our iPods, and carried-around storage for really personal or need-to-have material -- the novel we're working on, those old love letters, the Powerpoint we're giving tomorrow."

At least two factors could also limit the spread of cloud services. The first is connectivity. Some 68 percent of Internet users in the United States still don't have broadband cable or DSL service at home, and there aren't enough Wi-Fi hotspots to keep busy urbanites and their laptops connected all day; and, in any case, the handheld devices they connect from still have limited memory and display capabilities. "A synchronization service isn't worth much if you can't get to the service, either because you can't get online, or because your device is sitting on your desk," says Pang. "More abundant wireless and better mobile devices are [going to be] important supporting players."

The second issue is security. Users will want assurances that the data they send to the "cloud" will stay secure. At Amazon, developers have addressed this need by building industry-standard authentication and bug-handling mechanisms into S3, which it has long used for internal purposes. "We wouldn't have released this externally if we weren't confident about storing our own data alongside customers'," says Barth.

Yet hackers and thieves update their techniques almost as quickly as companies roll out new security services. A Nigerian man, for example, is in prison in the United States for participating in an identity-theft ring that tricked Alpharetta, GA-based ChoicePoint, a collector of consumer data, into revealing credit-card information on at least 750 people in 2004. "A couple of ChoicePoint-like scandals, and the whole storage and synchronization sector could be hurt," says Pang.