Jeffrey Peel is the Managing Director of Quadriga Consulting. He is the author of CRM Redefined (Butterworth Heinemann) and a former director of two global market research firms and worked client-side at 3Com.
Jeffrey Peel has an Honours Degree in Economics from Queen’s University Belfast and is a Full Member of the Market Research Society
The corporate world of the enterprise has been slow to adopt cloud computing but is nowreacting to today’s socialised and connected global society and moving outdoors into the world of mobile computing. New business models and methods that revolve around the cloud are required. The challenge is getting the strategy right and that involves reappraisal of corporate computing platforms to allow businesses to benefit from the inherent advantages of the cloud.
There are a number of interlocking factors driving mobile cloud computing. Firstly, adoption of smart mobile devices has been dramatic with tablet/pad device adoption ramping up at a frantic pace. Apple iPad shipment growth has been stellar and app downloads now dwarf downloads of music from the iTunes store.
But rapid device shipment growth is not just restricted to Apple. Android powered device shipment growth is equally dramatic and availability of Android apps has resulted in head-to-head device wars between a host of manufacturers vying for market dominance. The result is that the pre-eminence of the PC is waning – more smartphones and tablets are now shipping than PCs.
Second, adoption of mobility is now a global phenomenon – with mobile phones offering Internet access to hundreds of millions of people in emerging economies. 3G subscriber growth is now around 35 per cent – with over 700 million subscribers already connected. With ever-cheaper smartphones becoming available more and more people – previously denied access to the Internet – will become connected.
Meanwhile, businesses are grappling with the consequences of rapid economic change. Employees of large businesses – and small – are forcing another type of change by demanding that business connectivity and technology is as user-centric and intuitive as consumer technology. Business decision-makers have also been made much more aware of the advantages that connected, easy to use devices bring. By comparison, business IT can seem cumbersome and slow.
Moreover, consumer technologies are redefining, entirely, new methods of doing business. Some traditional businesses have been slow to adopt social technologies and – as a result – may seem remote and disconnected from consumer discourse. Social media overlaps with information exchange (Twitter), sales promotion (Groupon), social interaction (Facebook), mobile application markets (Apple and Android), search/advertising (Google) and social gaming (Zynga).
Collectively these social interaction and sharing tools and platforms connect hundreds of millions of people across the globe and across most demographics and cultures. New business models and methods are required in the context of a new socialised and connected global society.
The degree to which large companies are embracing new business models to tap into this social change varies. Consumer technology companies tend to be at the vanguard in terms of adoption of new technology based marketing approaches. But, as mobile social technologies are becoming more ubiquitous, the non-tech brands are following.
Research by Morgan Stanley has shown the direct correlation between advertising spend and eyeballs. In 1995 there were just six million Internet users compared to around 1.2 billion by the end of 2009. Similarly global Internet advertising revenue has increased from around US$55million in 1995 to around US$54 billion by 2009.
On this basis, the new mobile connected population promises new business opportunities. But perhaps that is an opportunity very understated.
Mobility represents an opportunity for new ways of working but also new means of interacting with consumers – and consumers interacting with eachother. Ubiquitous, always-on, location and status aware connectivity represent an entirely new basis for social structures – never mind business and marketing.
IBM has been undertaking annual CIO surveys for several years – and the company’s most recent study has recently been published.The report makes interesting reading but one chart, in particular, helps quantify and articulate the increasing priority that CIOs are putting on both mobility solutions and cloud computing.
Here’s how IBM articulates this:CIOs are recalibrating their toolsets. While the top three priorities remain the same, mobility and cloud computing made the biggest leaps among their visionary plans. (The Essential CIO – IBM Institute Business Value)
Quite what these business respondents mean when they say they are going to spend more on mobile technology is subject to debate. Anecdotal evidence suggests that most seem to be thinking about transactional and communications processes with customers. Those customers are, increasingly, interacting with all Internet based media via mobile devices. Therefore it stands to reason that brand owners will want to be where the action is. Moreover, cloud technologies – as the enabler of such interactions – is almost a given. Cloud and virtualised server technologies are becoming the systems glue to make things happen. And business conducted in the cloud will require much more dynamic and faster operational processes to support them. Hence the interest in improved business intelligence – i.e. business intelligence created ‘just in time.’
However, the prevailing concern of senior executives about to implement cloud-based, virtualised, mobile-delivered business systems ecosystems is (you guessed it) security. Kevin Taylor, writing in the GSMA’s Mobile Business Briefing blog summed up the problem very neatly:
“It seems just about every CEO of a Fortune 500 company got an iPad for Xmas and asked the IT department to make it secure for use on the corporate VPN.”
The trouble is it’s not quite as simple as that. Moreover, the IT department’s need for control rarely allows a wholesale invasion of consumer products into the corporate space. The war between the next generation of apps vendors – business, mobile apps – is about to begin. The warriors include the Android community, RIM (developers of the Blackberry devices and associated server-side technologies) and Microsoft (with its shiny new Windows Mobile 7 operating system). Oh and Apple may want a share of the corporate action too. But the war has started.
In short, the enterprise is moving outdoors into the world of mobile computing. The debate is no longer about Enterprise 2.0 – it’s more about how the enterprise will respond to the consumer driven mobile revolution. But at least businesses know where the action is. The more difficult thing will be getting the strategy right – and that strategy revolves around the cloud.
Cloud computing has been around for quite some time. However, adoption by corporates has been relatively slow. To an extent this can be explained by the fact that enterprises have a fundamental mistrust of technology middlemen – and cloud computing requires middlemen.
Enterprises are offered a variety of cloud models (depending on what they want to do and what services they want to offer to their employees). For example, they can move some of their core IT functionality to so-called managed service providers. Or they may choose to adopt point solutions, such as email, from ‘package’ vendors that provide a full bells and whistles solution e.g. Google Apps.
In a recession businesses need to focus even more on core competencies and the demand for managed services is, consequently, going up. New technology is coming online with virtualization, cloud computing and business intelligence the hot technologies – supporting more traditional client-server hosting models. This means that there are opportunities for competitive advantage within the managed service community. Amazon, Microsoft and Rackspace are competing aggressively in the space – as well as a raft of service providers offering hosted productivity solutions such as customer relationship management, sale force automation, financial solutions, file sharing and more solutions coming on stream constantly.
The emergence of new mobile computing form factors – such as tablets and smart phones – has also spurred the ‘mobilisation’ of core productivity tools.
As a result, the C-suite is increasingly of the view that entire corporate computing platforms need to be reappraised to allow the business to gain the inherent advantages of the cloud.
As indicated in the IBM study referred-to earlier, many businesses see cloud computing as a means of changing their entire corporate computing infrastructure. However, it’s clear that respondents from businesses in developed countries are, perhaps, more cautious about the opportunities that cloud computing brings to the business. Developing nations seem to perceive the cloud and on-demand computing as a means of achieving competitive advantage. Fast growth companies in developing nations regard cloud and on-demand computing as a means, particularly, of extending accessibility to the business and brand – and also a means of extending the brand experience.
Several respondents in focus groups run by Quadriga Consulting recently felt that this ready acceptance of the advantages to be achieved by emerging technologies is a key reason for more rapid economic growth in countries like China and Brazil.
A study undertaken by virtualization software company VMWare and published in late 2010 confirms that some of the fastest growing emerging economies are the most avid adopters of cloud technology. The survey showed that 43 per cent of companies in India are embracing cloud computing versus just 31 per cent (for example) in Australia.
The elephant in the room, regarding adoption, still appears to be security. Therefore it’s clear that new business models are beginning to emerge to embrace new normal economics – and information technology is seen as a means to achieving change.
Mobile technology is seen as the technology most likely to have a positive impact on respondents’ businesses. Why should this be? After all mobile technology – mobile phones – have been around for years. What has changed? The answer seems to be pervasiveness and connectivity. No consumer technology has spread so fast or so globally. And no widely available consumer or business device has ever allowed consumers or employees to connect with each other quite so easily.
Research published by Kleiner Perkins Caulfield and Byers – the venture capital firm – indicates that global shipments of smartphones and tablets overtook PC shipments in the last quarter of 2010. Therefore the nature of computing is changing very rapidly. Internet connected mobile devices will soon overwhelm ‘traditional’ computing form factors – resulting in an always-on, connected and socially networked society. It’s time for businesses to respond.