Cloud computing; what is it? Ask US consumers

NEW YORK, USA: A mere 22 per cent of the US consumers are familiar with the term 'cloud computing', which denotes software applications or processes that are accessed from the Internet, rather than on personal computer hard drives, finds a recent study by market research firm The NPD Group.

While the term "cloud computing" is still confusing to many consumers, the activities that constitute cloud computing are being performed by the vast majority of consumers, adds the research group in its latest report.

More than three quarters (76 per cent) of the US respondents in NPD's "Digital Software and the Cloud Report" reported using some type of Internet-based cloud service in the past 12 months -- with email, tax preparation and online gaming leading the way.

Even so, the enormous usage of these cloud-based services has not completely supplanted desktop-computer-based applications: Nearly one quarter (24 per cent) of the US consumers reported purchasing a computer-based software application in the past six months.

"Whether they understand the terminology or not, consumers are actually pretty savvy in their use of cloud-based applications," said Stephen Baker, vice president, industry analysis for NPD. "They might not always recognize they are performing activities in the cloud, yet they still rely on and use those services extensively. Even so, they are not yet ready to completely give up on traditional PC-based software applications."

Activities Performed Over the Internet? | Savvy vs. Non-Savvy Consumers

Activity                  "Savvy"                 "Non-savvy" Email                         84%                       68% Gaming                      47%                       38% Tax                            44%                       39% Photo sharing             49%                       33% Video sharing             44%                       31% Office productivity     33%                       24% Disc back-up/storage   1%                       20% [Source: The NPD Group's "Digital Software and the Cloud Report" 2011]

Consumers who are familiar with cloud computing tend to use it more than those who are unfamiliar with the term; however, depending on the type of activity, there are some relative differences between savvy and non-savvy users.

For example cloud-savvy consumers are far more likely to use cloud-based email (84 per cent of savvy consumers versus 68 per cent for non-savvy consumers), while there is more parity between savvy and non-savvy consumers when it comes to tax preparation (44 per cent versus 39 per cent).

"Tax preparation is one area that bridges the PC-cloud divide," Baker said. "The consumer's knowledge and sophistication matter little in terms of how much they use tax prep services; additionally, it is the only type of cloud-based application consumers have shown a willingness to pay for. This might indicate a path to help consumers understand the value of computing in the cloud, and allow retailers and service providers to monetize additional services."