Cloud storage to hit 1.3B subs by 2017 but where’s the money?

More than a half billion subscriptions to cloud-based storage will be sold this year, up from less than 300 million in 2011, according to new data from IHS iSuppli.  And that’s not the end of it: the researcher forecasts subscriptions will hit 625 million next year, up 25 percent and expects double-digit growth rate to continue till 2017 when subscriptions are expected to hit an impressive 1.3 billion.

No wonder vendors keep jumping into a scrum that already includes Dropbox, Amazon(s amzn) CloudDrive, Apple(s aapl) iCloud, Google(s goog)Drive and Microsoft(s msft) SkyDrive. That’s not competition for the faint of heart.

According to the report:

The dash to provide cloud services is sweeping through companies of all shapes and stripes—from the wireless providers who have a lock on broadband spectrum; to corporate titans like Amazon, Google, Microsoft and Apple; to independent and pure-play cloud storage providers like Dropbox, Barracuda, Carbonite, SugarSync, Synplicity, Funanbol and Mozy(s emc).

Dropbox alone claims more than 50 million users and is the poster child for this market, but it’s getting more crowded with consumer technology and IT giants alike jumping in. It’s also fairly certain that storage services like Box, that bill themselves as enterprise cloud storage, are being used by consumers as well. The big question is how many of these consumers are using the freemium, as opposed to the paid, versions of these products.

Profitability is the tricky part. Ragdish Rebello, Ph.D., IHS’ director for consumer and communications, said these companies should realize — if they don’t already — that cloud services in and of themselves are not profitable so these vendors better be prepared to identify and provide value-added services that actually make money.

Feature photo courtesy of Flickr user redjar