The Big Promise of Cloud Computing

The startup Decho shows the potential of blending cloud computing with powerful mobile computing devices

When Damian Zikakis' laptop computer was stolen last May, he figured that was the last he would see of it. A thief had broken into the Birmingham (Mich.) offices of his employer, Boyden Executive Search. Zikakis promptly bought a new computer. He had subscribed to an automated computer backup service called Mozy, and he reconnected via his new laptop. That's when the Mozy service, which costs $5 per month for individuals, really paid off.

Zikakis noticed that some photographs and other files that weren't his were being saved by the backup system. He realized they belonged to the person who now had his original laptop. Doing a little sleuthing, he examined the photos. A teenage boy had posted images of himself mugging for the camera like an urban gangsta. A woman, who turned out to be the boy's mother, had stored a document on the laptop that included her name, address, and cell-phone number. With a little help from the police, Zikakis recovered his computer. "I'm a very happy Mozy customer," he says.

The story of the recovered laptop demonstrates the power of Mozy to do more for subscribers than its designers ever imagined, yet it doesn't even begin to show the potential that the people running the service now believe they can accomplish. Mozy comes from Decho, an independent subsidiary of storage giant EMC (EMC) that was formed last month. Decho, which stands for digital echo, aims to help consumers and businesspeople store and coordinate all of the digital information, photos, and videos in the computing cloud that they now keep on their computers, handhelds, and smartphones. Decho is on the leading edge of an emerging market for information management services—which is expected to attract giants like Microsoft (MSFT) and Google (GOOG) as well as other upstarts. "Decho is right in the middle of the shift from device-centric to information-centric computing," says Harel Kodesh, Decho's chief executive.

Like a File System in the Sky

Kodesh, an Israeli whose appointment to the job was announced by EMC on Dec. 16, has extensive experience in the software and communications industries. He previously served as chief product officer for Amdocs (DOX), which provides billing software and services for telecom companies. Before that he had a series of executive positions at Microsoft, where he oversaw development of the company's Windows CE operating system for handheld devices. EMC hasn't revealed its long-term plans for Decho, but it organized the company to operate independently like its highly successful VMware subsidiary, which went public last year.

Charles Fitzgerald, Decho's vice-president for product management and a longtime Microsoft employee, suggests that Decho's services are like the Windows file system in the sky—only much better and easier to use. Now, many people use their Windows file folders to store documents and photos, but sometimes they have difficulty finding them again. Others don't even bother with filing documents in folders, relying on memory or the slow and awkward Windows search feature to help them locate things. Plus, now that people have their digital belongings scattered among devices and Web sites, the Windows file folder system doesn't do nearly enough for them. "The current thinking is bankrupt," Fitzgerald says. "The desktop file folder metaphor doesn't work anymore."

Decho's goal is to bring order to fractured digital lives. Right now, every computing and communications device still has its own file system, and people aren't able to stash all the digital pieces of their lives in one easy-to-get-to space in the computing cloud. Decho is just getting started. The Mozy service is its only offering so far, though Fitzgerald promises that new and more sophisticated offerings will begin rolling out next year.

Still, if Decho produces a portfolio of useful services and gets them to market quickly, it could be one of the early leaders in an important new high-tech market: that of managing all of your personal digital information. "Decho is taking your information into the cloud, and they'll keep inventing new things to help you manage your information," says analyst Frank Gillett of market researcher Forrester Research FORR), who is high on the company's prospects.

All Your Info in One Place

Information management is central to the strategy of EMC. It had never been in a consumer technology business before it bought Mozy, of Salt Lake City, in late 2007, and then followed up by buying Pi, a Seattle startup, in early 2008. By merging the two companies, it adds Pi's sophisticated artificial-intelligence-based technology for managing personal information with Mozy's existing backup service and vast digital storage warehouses. Mozy already has more than 900,000 users in over 100 countries. It's storing more than 10 petabytes of information—or about 10 times as much as the social networking Web site Facebook has on all of its pages.

The Pi technology will make it possible to organize individuals' information automatically from all of their devices in one place. It makes it easy for them to browse through their stuff, search for particular items, or share documents or photos. Using artificial intelligence, the software will examine the new information as it comes in and create virtual file folders containing related items.

Decho will face plenty of competition as the market for this kind of service emerges. Microsoft and Google will probably be two of the major players, since they have staked out broad positions in portable and cloud computing. Microsoft already has a handful of information-management services in its Windows Live portfolio, including a free service for storing files in the cloud and a service that allows people to synchronize the information they store on multiple computers. The company plans to roll out many more such offerings. "We're figuring out how to take this stuff and bring together the best of the PC, the mobile phone, and the Web." says Brian Hall, general manager of the Windows Live business group.

The way Hall describes things, information storage and management are just a piece of a larger puzzle. He sees Microsoft integrating and managing not just information but a host of software applications and Web services, such as Facebook and Flickr (YHOO), in its cloud. So while he sees a role for Decho, he thinks it's relatively limited.

Decho's Fitzgerald respects the great might of Microsoft, but he argues that information is going to be king in the coming world, and Decho is in a good position to manage a lot of information for a lot of people companies. "Devices and applications will come and go, but your information will stay. That's what we're focused on," he says.

This is one of those debates that will be resolved only with the passage of time. As usual, it's hard to bet against Microsoft, a patient company with an immense amount of resources. But EMC has plenty of muscle, too, and if Decho fulfills its promise, a major new player could emerge on the computing landscape.

Before it's here, it's on the Bloomberg Terminal.