What Apple, Google Need To Beat Amazon's Cloud Drive (AAPL, GOOG, AMZN)

If everything goes as planned, the Amazon

Cloud Drive could be a

. This doesn't bode well for Apple

and Google

, who are reportedly working on their own versions of cloud storage. Cloud Drive is currently offering 5 GB of free storage space, and consumers who download an MP3 album from Amazon.com will get 20 GB free for one year. That's a far better deal than the freebies that Dropbox offers, which end at just 2 GB of storage space. Cloud Drive users can upgrade to 50 GB for just $50 per year. I say “for just” because Dropbox currently charges $9.99 per month for the same amount of storage. But this isn't just a problem for existing cloud services. It is also a problem for the inevitable copycats, who will have to undercut Amazon's price or offer a superior product in order to compete. Let's take a look at some of the features and strategies that could help give Apple or Google the edge.

While it's not yet possible to stream everything without flaw (video games are still too graphic-intensive – even for OnLive), streaming video quality improves every year. There is no reason why you shouldn't be able to upload every video and music file that you have and stream it from a cloud without ever having to physically download the file. You can

do that now, but it's not perfect or seamless. It should be.

Want to get the masses to use

service? Then you need an incentive that consumers can't refuse. Both Apple and Google are big enough to enter the market and garner instant support from loyalists and curious users alike. But once you've gone through those consumers, it's an uphill battle that only a multi-billion-dollar corporation can fight. But why fight it? Google could easily take the “loss” (if there is one) of giving away 100 GB now for what could be returning subscribers later. It's a risk, no question. Consumers may throw all of their files online today, and pack up and leave the moment they have to pay. Realistically, however, many of those free-loading consumers won't leave. Over the 24-month trial, they will become comfortable with the system, and gradually store more and more of their files online. While they could have physical backups on a hard drive somewhere, they may have also created files that are only in the cloud. Those consumers will be the least likely to leave because they aren't going to want to go through the trouble of pulling their files from the site, only to have to upload them to another cloud service (which likely won't be free).

Apple has the advantage here, because they offer so much more in terms of music, movies, apps, etc., than Google and Amazon combined. But ideally, any digital items that you purchase should appear in the cloud immediately without requiring the user to download them first. Ex: Let's say you've just paid for the latest episode of The Office, but you're not at your own iTunes-authorized computer. With the cloud service, users should be given the option to log in from any machine and access the video immediately.

By the time Sony

announced its paid subscription service for video games, PlayStation Plus, no one cared. Users could already play PS3 games online for free, so why would they pay the $50 annual fee for something they really didn't need? Knowing this very fact, Sony added a plethora of monthly freebies to PlayStation Plus, including exclusive demos, select downloadable content (which users would normally have to pay for), and free games from its retro lineup. Google and Apple should take a similar approach with their respective cloud services. Apple, for example, could offer free movie rentals, free music and free apps – all of which would entice users to pay the monthly storage fee.

Even if “instant access” isn't quite possible, there is no reason for Cloud Drive and other cloud services to be without a multi-platform system out of the box. Isn't that the whole point of an online-centric world: the ability to use and access everything from the Internet, regardless of the device that's in your hands?