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Consumers Don't Know What "Cloud Computing" Is, Even Though They Use It

NPD's "Digital Software and the Cloud Report" Covers Both Consumer Familiarity with and Use of Cloud Computing

According to a recent study from The NPD Group, a market research company, just 22 percent of U.S. consumers were 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. 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.

More than three quarters (76 percent) of U.S. 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 percent) of U.S. 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 of 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."

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 percent of savvy consumers versus 68 percent for non-savvy consumers), while there is more parity between savvy and non-savvy consumers when it comes to tax preparation (44 percent versus 39 percent).

 "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."

NPD's "Digital Software and the Cloud Report" covers both consumer familiarity with and use of cloud computing, as well as software digital downloading trends. The information in the report was derived from an online survey fielded in May 2011 to a representative sample of 1,822 U.S. adults (age 18 and older).

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