Excellent points, +Tom Coakley
. I'm not convinced a third-party cloud service is the solution to organizing/orchestrating the Internet of Things, but that could well be the way things work out on their own. Big gamble if MS decides that's their replacement for being able to cash in on Windows and Office licenses, though, since Google is already waaaay out in front of Microsoft on being the company that intends to create its own Internet of Things, and Google has the advantage of not having a business model teetering on collapse.
I like to think that some coder out there will create an open-source system that enables users to construct an encrypted configuration reference file that you'd keep backed up to several (or all) of your smart things, and any time you add a new smart thing to your personal network, it would draw upon that configuration file to build its internal settings and synch up. No need for some third party to store that file for you, though even if they did it would be a pretty minor service.
The trick with Amazon's cloud service is that you don't get to own any of the digital content they license to you; you're paying for restricted use of that content, which forces you to rely on Amazon's cloud service. And I think, long term, that's going to bite Amazon in the ass. It's hostile to the consumer and creates market space for a competitor to emerge that has a more customer-friendly business model. And if the Internet of Things does empower consumers to create and control their own 'cloud' support, cloud services like Google Drive and Amazon Kindle, and Microsoft SkyDrive are all going to start eroding market share as young people don't even bother trying them out.
Either way I'm pretty jazzed to see how the Internet of Things emerges, even if it forces us to maintain separate cloud accounts with a half-dozen third party service providers. That's my idea of a worst-case scenario, and even then I'd want in.