I'm a big believer in cloud-based music services. As wireless bandwidth increases, there's no reason that my collection of music (or other content, such as pictures) should be limited to the small hard drive that comes with my phone or MP3 player, or bound to various types of swappable memory sticks.
On-demand subscription services like Spotify, Rhapsody, and Thumbplay are one solution. But I'm also seeing more interest in the concept of the "music locker," which lets you back up your computer-based music collection into the cloud--Melodeo is working on an update to Nutsie that will let Android phone users play their iTunes collections via the cloud, and ZumoDrive has offered a similar iTunes backup experience for at least a year that includes online backup for pictures, documents, and other data. Music lockers are particularly useful for folks who already have large digital music collections. The only problem: most online storage services cost money once you surpass a few gigabytes.
That got me thinking about Microsoft's upcoming Windows Phone 7 Series, which will be a highlight of the company's MIX conference next week. One of the interesting things about Windows Phone 7 is the way it integrates so many Microsoft services, including Bing search, Xbox Live, and the Zune Marketplace.
But what about SkyDrive? As David Pogue of The New York Times pointed out last week, it's a hidden gem buried among the tangled weeds of Windows Live, offering 25GB of free online storage. That's it. Simple. There's no tie-in to Windows (yet) and no real integration with other Microsoft products and services, although it will be the back end for the upcoming Office Web Apps for consumers.
So imagine if Microsoft opens SkyDrive to Windows Phone 7 users and integrates it into the Music + Video hub (which is basically the Zune HD in every Windows Phone 7). You could back up 25GB of music from your PC and stream it over any wireless connection--Wi-Fi or 3G--directly to your phone. For free.
Business considerations might prevent Microsoft from doing this. It would make the Zune Pass ($14.99 a month) a harder sell, and might overlap with the MyPhone service, which already offers 200MB of backup for contacts, pictures, and other data. (Microsoft hasn't officially said that MyPhone is carrying forward to Windows Phone 7, but I assume there will be some similar backup service.) To me, it illustrates Microsoft's hidden strength as it tries to come from behind in the mobile space; the company already has lots of pieces in place that other competitors would need to build.
Apple could compete by adding iTunes backup and streaming to Mobile Me (which costs $99 a year), or perhaps by using its Lala acquisition to offer free on-demand streams for songs that users already have in their libraries. But Apple is the biggest beneficiary of the current single-song download model that dominates online music, and is in no hurry to change it. Microsoft, however, doesn't have that kind of incumbent business to protect.