Microsoft Corporation (MSFT), Adobe Systems Incorporated (ADBE): Xbox One, Creative Cloud Backlash Show Limits of Cloud Computing

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Microsoft Corporation (NASDAQ:MSFT)Even the most casual observers of technology are aware of a major shift currently taking place. Increasingly, less computing is being done locally, and more is being done “in the cloud.”

This trend toward cloud computing has obvious advantages, but it isn’t without its drawbacks. Some companies, such as Microsoft Corporation (NASDAQ:MSFT) and Adobe Systems Incorporated (NASDAQ:ADBE), have angered their customers with their embrace of cloud technology.

Are these companies moving too quickly? Is cloud technology getting ahead of itself?

The move to embrace the cloud

Generally speaking, the concept of the cloud can be separated into two parts: cloud storage, and cloud computing.

Examples of the former include Apple Inc. (NASDAQ:AAPL)’s iCloud, Google Inc (NASDAQ:GOOG)‘s Drive, Microsoft’s Skydrive and Dropbox. Examples of the later include Google Documents, Microsoft Corporation (NASDAQ:MSFT)’s Office Web Apps, and, inc. (NYSE:CRM)’s various products.

Both offer tantalizing advantages — data stored on the cloud can be easily accessed from any Internet-connected device, while cloud-based applications can be fully utilized on even the weakest of hardware configurations.

But the cloud does come up short in several major ways. For example, a crashed server can render cloud-based applications and data temporarily inaccessible, and the loss of Internet means the cloud can’t be accessed at all.

Microsoft’s cloud box

Microsoft Corporation (NASDAQ:MSFT) has invested heavily in the cloud through its Azure technology. This has attracted some big name investors (like ValueAct), but could upset many of its customers.

Case in point, Microsoft Corporation (NASDAQ:MSFT) drew a lot of fire from the gaming community after it revealed that its next console, the Xbox One, would require a periodic Internet connection to function. Although the console does not require a constant connection (as some rumors had suggested), those without at least semi-regular Internet access will find the machine worthless.

But gamers upset with this periodic Internet connection check haven’t seen anything yet. Along with the new Xbox, Microsoft Corporation (NASDAQ:MSFT) announced that it has dramatically increased the number of servers it has available for cloud gaming.

Microsoft Corporation (NASDAQ:MSFT) will make these cloud servers available to game creators, who will — over time — opt to run parts of their games in the cloud. In turn, those games that are designed to be heavily reliant on these cloud servers will be wholly unplayable without an Internet connection.

Unfortunately, not every gamer has a steady Internet connection. And even if they do, the idea of being wholly reliant upon it is upsetting to many.

Adobe’s Creative Cloud debacle

Software maker Adobe Systems Incorporated (NASDAQ:ADBE) also angered its customers after it said it would be putting its entire focus behind Creative Cloud. Going forward, consumers can only get access to Adobe Systems Incorporated (NASDAQ:ADBE)’s Creative software suite by paying a monthly subscription fee and going online to verify their software regularly.

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