CES 2012 – the Cloud Electronics Show

Overall, there was very little “outstanding announcement” to report from CES 2012. It isn’t just one of those years in which we see radical changes. The largest firms (like Microsoft) didn’t participate at all. In fact it was a year when existing technologies just improved significantly in their features, performance, aesthetics, capabilities, and we saw a lot of focus on cost, as the sign of the times.

Nevertheless the use of cloud computing has gone from few and far between to pretty much anything and everything. CES 2012 shows that shift in no uncertain terms.
The rise of the retail cloud has reached critical mass as everything from DVD players to TVs, from car entertainment to alarm clocks, comes with some sort of cloud service to support that device.

For example, Mercedes-Benz announced a new cloud-connected dashboard computer called Mbrace2 that provides access to 3G cellular-connected apps such as Facebook and over-the-air software updates. Ford and Toyota are following up with their own cloud-based systems, providing both driving utilities and entertainment.

Other uses of the cloud are more utilitarian, such as providing storage and processing power for mobile devices, which is old news. But now the same computing models are being used for most entertainment devices in your home, even kitchen appliances that provide “smart grid” features such as the ability to transmit their energy usage and cycle down during peak loads. Pretty much anything that costs more than $100 comes with its own Wi-Fi radio these days.

It’s interesting how cloud computing has seeped into consumer electronics over time. The ability to add streaming from services such as Netflix to your DVD or TV has been around for a while, but that same cloud is now providing an application development platform for third parties and the ability to store many gigabytes of data. In other words, they are morphing from simple website abstractions to true platforms.

What’s driving the rise of the retail cloud is the desire to be more innovative than the competition, which is critical to the success of these companies. The biggest factor is the revenue potential: Once upon a time you got your $200 from a customer by selling a new gadget, and that was that until it wore out or was obsolete. Now you can also sell a subscription to a cloud system for many years to come, gaining double or more the revenues as from the device itself. That profit motive, coupled with users’ embrace of connected technologies (all those iPhones and Android devices), is what will power the retail cloud for years to come.