Apple, Google, Microsoft stake out different ground in cloud-service philosophy

When I started writing about technology for a living, the demarcations between the major technology companies were pretty clear. Lots of students and creative people used Macs, and everyone else in the world used Windows.

But we live in interesting times. On mobile, the major players are not Apple and Microsoft, but Apple and Google. Both companies have dramatically different approaches to their business models and approaches, especially when it comes to data in the cloud. Not to be outdone, Satya Nadella is redefining Microsoft to be much more focused on its own cloud services--on any platform.

Apple's business model is simple: It makes money from the devices people buy. That gives it an advantage when it comes to web services, because it doesn't need to make money by processing user data and turning it into advertising.

Apple has realized that the drumbeat of stories about how law-enforcement and spy agencies peer into our personal data provides it with an opening. It can afford to not just anonymize cloud data, but encrypt it. Apple allows users to store data on its servers that Apple itself can't encrypt. That means that if a law-enforcement agency or a spy agency asks for a tap, Apple can truthfully say that it can't help. And if spies or hackers break into Apple's servers, they'll need to break encryption to make much of the data they find there.

Of course, this philosophy has disadvantages, too. Every device you use in Apple's cloud has to exchange public and private keys with one another, which explains why the iMessage communication system can be so inconsistent. The day-to-day user experience of cloud services is much better when your server can see all the data. Apple's banking that in the long run, users care more about privacy and security--but if it falters on everyday user experience, it's hard to imagine that most users will keep being frustrated just out of an abstract fear of losing their privacy.

Now on the other end of the spectrum, there's Google. Google doesn't really make money from Android, but it does make a whole lot of money from advertising. As a result, Google's game is to aggregate customer data. You can use Gmail for free, but the service auto-generates ads based on the content of your email. Google's business model is largely to give away services in return for data and advertising opportunities.

There are a lot of people who will tell you that if you're not paying for a product, you're not the customer--but a product being sold to someone else. I think there's some truth in that statement, but it obscures a lot of complexity about Google's business model and overall approach.

Still, let's be clear: Google offers incredible power by looking at all your data in the cloud. It mines your data for your good--just look at the revamped Google Photos service, which does some pretty amazing things by examining all your photos--and for its own good, too. Apple can't harness the powers of its huge servers to do the same thing, because Apple's generally built its approach to make your data obscure.

Right now, this means that Google can do some amazing things with your data by analyzing it in the cloud and sending you back results. Google Now is probably the most impressive example. Apple, meanwhile, has to use your existing devices to try to do that analysis--Photos for Mac has to do all the heavy lifting in terms of facial recognition, and if you don't have a Mac then you're out of luck. While Apple promises more innovation on this front in iOS 9, it'll still be data crunched on your device, not in the cloud. Google has amazing scale in the cloud, and takes advantage of it.

Of course, Google also offers businesses services that they can pay for--my last employer spent several years using Google Apps for Work, a $5 per user per month service that provided us Gmail, Google Apps, and Google Drive for our entire workgroup. In the end, though, using Google made our IT department squeamish and we transitioned to Office 365. That's the downside of Google's approach: A lack of trust that Google's servers can truly keep your private data private.

I should mention that one of the interesting wrinkles in Google's approach is that, unlike Apple, Google wants its services to run on every device under the sun. Google's ecosystem runs incredibly well on Apple devices, for instance. There are literally dozens of Google apps in the App Store, and a user that's fully committed to Google's approach to cloud services can embrace iOS and feel fulfilled.

Where's Microsoft on this? It's a work in progress, but Nadella's reign has made Microsoft into a company that's approaching the cloud very much like Google has--it wants its services used everywhere. I can open a Word file from my OneDrive right on my iPhone without any trouble. The main difference seems to be that Microsoft brings with it not only deep integration with Windows on PCs, but an ongoing relationship and comfort with businesses that Google still seems to lack.

In some ways, Microsoft is playing a similar game to Google, but it's doing it from a place of greater trust. Most businesses have huge investments in PC hardware, and if Microsoft can make its services broadly available on all mobile platforms and commit to being a trustworthy and secure partner for businesses, I wouldn't be surprised if Nadella's Microsoft makes life harder for Google.