3 Megatrends in Technology

By Markets Fool.com

Technology never slows.

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The pressure for companies to innovate, create new categories, and open new markets has perhaps never been higher. For example, high-profile companies such asApple, Samsung, Microsoft ,and Google are all betting billions of dollars on wearables. Similarly, a number of companies are trying to make the electric car a viable mass-use product and others are pushing boundaries in countless other areas.

But while these brands aim to make specific products happen, a number of major trends are driving the technology market as a whole. In some ways the three listed below are intertwined and dependent upon each other.

All three have also become megatrends -- concepts that will sit at the center of the technology world for years to come.

Data is in the cloud
It wasn't that long ago when data lived on the actual machine on which it was created. Moving it required first floppy discs, then CDs, then USB flash drives, and portable hard drives. Now, Microsoft, Google, and Apple -- the three companies behind the leading operating systems -- are pushing to move data into the cloud.

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Data stored in the cloud can be accessed from anywhere. Source: author.

Some of the benefits of this effort are obvious. The cloud has none of the storage limits of individual computers. In addition, storing data remotely allows people to access and share it across a variety of devices.

Perhaps more importantly, pushing data to the cloud makes it possible for devices to be smaller, lighter, and more portable. All computers used to come with disk drives, then CD drives, and eventually CD/DVD combos. Now, a laptop is more likely than not to to lack any sort of drive. Instead, storage is in the cloud, which eliminates the need for breakable moving parts.

The cloud is big, and the market for cloud services is growing ever larger.

"Cloud adoption will continue to pick up, but we'll see more of a shift to software as a service and platform as a service as cloud providers look to raise revenues," wrote Tom Nolle on TechTarget's forecast of the 2015 cloud market.

Another expert, Jim O'Reilly, writing on the same Web page, concurred.

"Overall, the cloud's growth rate will increase -- driven by confidence in the cloud approach, better tools, stability and completeness in the OpenStack family of modules, as well as more powerful, yet cheaper hardware," he wrote. O'Reilly also said that "legacy processing will speed up its transition to the cloud in the face of overwhelming operational cost arguments."

Cloud prices are falling
The cloud's growth has driven down prices for everything from hosting websites to buying computers. This first development has made launching or running a Web-based business much more affordable, which opens the door to innovation. In the 1990s, during the first Internet boom, the need for dedicated servers for consumer Web businesses was a major cost and a barrier to entry.

Now, providers such asAmazon.com and Microsoft's Azure cloud hosting offer businesses low-cost scalable systems. You only pay for the capacity you need, and adding more as you grow is easy.

Because the cloud has become a commodity, Microsoft and Google are constantly reducing their prices.

"Hardware -- especially physical storage media -- is getting cheaper at the same time that demand is propelling providers like Amazon and Google to scale out their data centers in a massive way," wrote CITEWorld's Matt Weinberger. "Together, this is driving prices for cloud computing services way, way down."

Weinberger called the battle between the major players in the field "a back-and-forth war." This has driven their margins down, but it's good for users (though it could ultimately have drawbacks).

"This is good for customers in the same way that Wal-Mart is good for customers -- it's cheap, but hope you didn't like any of the other businesses in town," he wrote.

Devices have gotten cheap
It's not just cloud storage prices that have dropped. The price for low-end devices, in some cases very good ones, has fallen as well. That's almost entirely due to the first two developments.

The growth of the cloud has allowed computer makers to eliminate removable storage drives and even to lower the amount of onboard storage. The low price of cloud storage and computing power, meanwhile, has allowed tablets, phones, and low-end laptops to not only store files remotely but actually use the cloud for computing.

This has led to sub-$100 Windows and Android tablets and Chromebooks and Windows laptops that cost less than $200 (with new devices already being sold at $150). These aren't limited-use devices. These are machines like the Hewlett-PackardStream Windows tablet and laptop line that run Microsoft Office reasonably well.

The same is true of the various laptops using Google's Chrome OS. By pushing storage and most computing to the cloud, devices have gotten cheaper.

It's only going to accelerate
In some ways the cloud-driven technology revolution has only just begun. Microsoft, Amazon, and others will continue to force cloud costs down, and more emerging devices will take advantage of that.

Computers -- at least at the entry-level end of the equation -- will simply be Internet access devices, and the real power will come from the cloud. That trend is likely to be good not only for consumers, but also for business.

The article 3 Megatrends in Technology originally appeared on Fool.com.

Daniel Kline owns shares of Apple and Microsoft. He still stores most things on his laptop. The Motley Fool recommends Amazon.com, Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.