Cloud Computing – Will Innovation Stem from Patent Licensing?

The rise of cloud computing in the recent decade has fueled many traditional technology powerhouses to develop cutting-edge products for shared and distributed data storage and access.

IBM and Microsoft are the leaders in this space, with IBM holding an impressive 1,547 patents and Microsoft holding 1,020 patents related to various aspects of cloud computing technology.  Both IBM and Microsoft have patented technologies surrounding network infrastructure and software architecture that facilitates data access in distributed environments.

These two companies are continuing to innovate in this space, each having approximately 1,000 patent applications related to cloud computing pending before the USPTO.

Cisco and Hewlett Packard are also major holders of core cloud-computing technology patents.  Cisco owns 641 patents, primarily focused on network hardware and infrastructure required for cloud layering technology.  Hewlett Packard owns 505 patents covering a variety of technologies, from cloud architecture to network security.

Leading tech companies like Apple, Amazon, and Google, while having popular cloud-based offerings, lag far behind their established rivals in terms of patented cloud-related technologies.  Apple holds 94 patents (79 pending), Amazon holds 57 patents (5 pending), and Google owns 49 patents (48 pending) in this space.

Given the vast numbers of cloud-related patents covering both hardware infrastructure and software architecture owned by IBM, Microsoft, Cisco, and HP, the newer entrants to this space may likely have to license core technologies in order to provide innovative offerings that build on fundamental cloud concepts.

In the cloud computing space, Microsoft has not been as aggressive against potential patent infringers as it has been in the mobile OS space (i.e., against Android device manufacturers). Yet it did file a lawsuit against Salesforce.com, Inc. in 2010 claiming the company infringed on patents that provide the basic frameworks for Salesforce.com’s cloud-based products.

While Microsoft has not have filed as many cloud-related patent lawsuits yet, its recent history with enforcing its patents and obtaining licensing deals with Android device manufacturers suggests that Microsoft may certainly look to monetize its cloud-computing technologies in a similar way.

There are currently numerous companies aggressively developing and offering cloud-based enterprise solutions.  As IBM, Microsoft, Cisco and HP own the lion’s share of patents that relate to fundamental cloud-computing technologies, it may well be these companies that will reap rewards from licensing and monetizing their patent portfolios to their late-entry competitors – namely Amazon, Google and Apple.

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