A couple of days ago, Amazon announced the release of the “Cloud Drive,” a new service offering cloud-based storage space for music, video or pretty much anything else you can feasibly store (up to 1 terabyte  for $1,000/year) on the Amazon servers, accessible anywhere with an Internet connection. In conjunction, Amazon also dropped the “Cloud Player,” a music player fully compatible with the Cloud Drive. The Cloud Player streams music from one’s personal Cloud Drive account onto the web or any Android device. Although it takes a little while to initially move your music library onto Amazon’s server, the process is pretty straightforward with the help of Amazon’s MP3 Uploader.

Cloud-based music is a product that Google and Apple have been playing around with for some time now, and it was pretty clear that this service would be released once the legal battles and copyright issues could be sorted out. As cellular bandwidth increased, streaming music became increasingly easy to transmit, and a personalized music catalog in the cloud seemed like the next obvious move in the wake of Pandora and GrooveShark’s success.

It’s just surprising that Amazon was the first to actually make it happen.

And now it seems that a music war will begin in the near future. Apple, Google and Amazon will be duking it out to see who can gain the biggest market share of the ever-increasing Online Music Biz pie. As one of the largest providers of…well, everything, Amazon already has some nice perks to offer: Any album bought through Amazon will be stored for free, nearly any file type can be stored on the Cloud Drive, and the Cloud Player is already compatible for play on the web and Android (no iOS…yet).

But,  with iOS locked away from the competitors, it seems that Apple’s forthcoming release will be the gold-standard pretty quickly. Apple already has an infrastructure of millions of Internet-capable iPods and iPhones just begging to be linked with a music library in the sky. Also, iTunes already has a ton of leverage — as the biggest music provider in the industry — and their recent release of the Beatles catalog should reflect their growing thrust in the industry. But then again, Google is Google. If anyone can beat out iTunes or Amazon dominance, it’s Google. ITunes might be one of the most user-friendly programs out there, but it is also one of the most cumbersome and clunky. If Google can implement the Gmail model — fast, user-friendly and Google-integrated — they’re a real competitor.

So how will it all shake out? Well, consider each company’s business model. Amazon’s revenue comes mainly from music, video and book sales. The Kindle has thus far been a great success because it entices customers to stick with Amazon rather than venture to a different bookseller. Also, Amazon hasn’t been plagued with literature piracy akin to that which killed the record labels. Therefore, you can expect the Cloud Drive, as it further develops, to push digital consumerism via the Amazon marketplace. If you already buy all of your music, chances are that the Cloud Drive will remain flexible and easy just as long as you continue to buy what you store.

On the other hand, Apple essentially gives away a ton of great software while constantly reinventing its hardware. So, expect iPods and iPhones to shrink in hard-drive space as more and more of their content is thrown up into the cloud. This move will be generally good for Apple consumers — it will free up space to be used for functionality and processing speed. Apple will also probably offer increasingly seamless integration and the ease of use that iTunes users are accustomed to. On the other hand, the move will also make air travel or rural roadtrips a lot less musical; music catalogs will be increasingly dependent on Internet access, which is not quite as ubiquitous as electricity or running water these days.

Finally, there is Google. Google’s business model depends largely on search. As long as you continue to look to Google first, they’re happy. That is why pretty amazing services like Gmail, Google Docs and Google Maps remain free. These are auxiliary products that further entrench your commitment to Google as a search provider. Therefore, my hopes are that Google will provide an incredibly cheap (if not free), accessible, fast and user-friendly product that will have the flexibility to be accessed from anywhere. Google doesn’t rely on hardware sales like Apple; they just want you to keep coming back to the site. Because of this, they are sure to add a lot of perks such as a Pandora-like recommendations options (iTunes’s genius has constantly let me down) and overall flexibility. And, they’ll do everything possible to make your current hardware compatible; Apple might expect a costly upgrade to their latest device.

In short, I would recommend to jump on the Amazon boat (no pun intended…) if you already love Amazon, exclusively use Android, or are simply dying to put your stuff in the cloud. Otherwise, I would hold off for a bit to see what Apple and Google have up their sleeves. Chances are, it’ll be faster, more flexible and better integrated than anything Amazon can release.

Either way, it looks like external hard-drives and USBs will seem like Zip Disks and 8-tracks pretty soon.