2010 is indeed heating up to be a battle of battles between Google and Apple.  Several years ago it would have been incomprehensible to imagine Google and Apple going head to head in an all out war, or at least Apple declaring all out war on Google.  The interesting thing is their entirely different business models.  Google’s is founded on advertising, subsidised with a small amount of paid applications.  Apple’s is the other way around – with high margin products and software, subsidised with a small amount of advertising in the (predictably named) iAd platform.  Google has a vested in interest in driving down margins and costs to broaden their market appeal.  Apple has a vested interest in maintaining profit margins through ecosystem lock in and clever marketing.

It is not the first time Google’s apparently charitable business model has come in conflict with a margin dependent business model, and it won’t be the last time.  On the surface, Google like to appear as the good guys who give everything away for free and eschew system lock-in, however this is only because they can afford to do it and in fact need to so they can drive ‘traffic’ through their ecosystem and sell ads.  Google also gathers a level of freely given market  intelligence that would have made George Orwell quiver.

Other companies like Apple rely on attracting and retaining high margin consumers to their ecosystem and providing a high quality level of service and product, in return for being tied to the platform.

So now Apple is launching a new assault on Google with the concept of a paid cloud offering, which essentially means less stuff to carry around and more stuff that is carried for you and available when you need it through the network.

Apple’s War With Google Takes To The Skies With iTunes In The Cloud.

However with all this gold rush toward the ‘cloud’, one question remains.

If access to the cloud is interrupted, what do you do?

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