Home Asia-Pacific III 2011 In a Cloudy Forecast, Opportunity Shines

In a Cloudy Forecast, Opportunity Shines

by david.nunes
Scott PuopoloIssue:Asia-Pacific III 2011
Article no.:10
Topic:In a Cloudy Forecast, Opportunity Shines
Author:Scott Puopolo
Global Service Provider Practice, IBSG
Organisation:Cisco Systems
PDF size:268KB

About author

Scott A. Puopolo is vice president of the Global Service Provider Practice of Cisco® Internet Business Solutions Group (IBSG). Scott brings significant strategy, operations and finance experience in the communications, media and high technology industries. Prior to joining Cisco, Puopolo was president of Smooth Engine, Inc., a merchant banking firm located in New York City, where he was responsible for defining and implementing the firm’s strategy and overseeing its advisory activities for private equity and corporate clients in many aspects of the converged communications industry.
Puopolo spent nearly 15 years at Accenture, where he served as the lead partner for the firm’s North American Telecommunications Strategy practice, and where he led the personnel for the firm’s Eastern U.S. and Canadian Communications, Media and High Technology Strategy Group. Puopolo’s current focus is working with leading service providers to identify and create opportunities to compete more effectively through the delivery of cloud computing services. His team is also working with customers to identify market segments, develop go-to-market strategies and enable customers to stake out leading positions in cloud delivery services in their geographies.
Puopolo received his undergraduate degree cum laude from Harvard College where he was a Harvard College and Charles J. Paine Scholar. He received his M.B.A. from the Wharton School of the University of Pennsylvania, where he majored in Strategic Management and Marketing.

Article abstract

Mobile phones and smart gadgets continue to challenge the position of the PC as the main personal tool for data services. In particular, ‘Mobile Cloud’ is contributing to this shift. It allows users to have ‘virtual desktop’ while on the move. It keeps all the devices up-to-date with current technology and removes some of the hazards associated with sensitive data stored on vulnerable portable devices. With the Mobile Cloud in place, a cheaper, ‘thinner’ client is required, so lower-income population can enter the smartphone era. The article quotes users statistics that show that there is willingness to embrace Mobile Cloud by majority of smartphone users and that they trust service providers more than web-players to deliver a viable Cloud service.

Full Article

With their lightning-fast processors and vast storage capacity, PCs remain a central object of affection in the home and a pre-eminent utility in the workplace. So, whether your game is gaming, video production, or analysing extra-solar planets, the brute force of the high-powered PC is the way to go. At least for now. Increasingly, the PC’s thunder is being stolen. A potentially more powerful bolt is building in the cloud. Specifically, the mobile cloud.
For as the PC’s diminutive rival — the smartphone — exploits the migration of apps, storage, and services into the cloud, the resulting paradigm shift from PC to mobile gadgets could radically alter the way we live, work and play.
Handheld devices like the iPhone, iPad, BlackBerry and Android smartphones are already dazzling consumers with their advanced features, increased computing power and anywhere/anytime connectivity. The mobile cloud will only accelerate this trend, although paradoxically, the devices themselves may become less powerful and cheaper (at least potentially) as they summon their real strength from outside and above, in the cloud.
In the meantime, mobile consumers are beginning to tap some basic cloud services like email and content storage, while anticipating the dizzying array of next-generation cloud-based applications to come. Even advanced computing power is increasingly available in the palm of one’s hand, accessed through a simple browser, tapping into the cloud.
What does it all mean for service providers? As the mobile cloud enables smartphones and their larger cousins, tablets, to edge out PCs for more and more functions, the trend will drive a growing dependence on the network. This is great news for SPs (Service Providers) but also presents them with daunting challenges. Consumers will demand greater reliability from their providers if they are to trust storing and accessing their most valuable content in the cloud. As a result, service providers may need to invest in re-architecting their networks. The demand for an ever-expanding array of cloud-based apps and services will drive SPs to rethink their business strategies related to monetising such services, while at the same time integrating their networks to meet both home and mobile needs.
Cisco’s Internet Business Solutions Group (IBSG) undertook its Mobile Cloud Watch survey to understand better the mobile cloud market, including customer needs and strategies for service providers. The survey also looks to the near future—and the nearly limitless potential for more advanced mobile cloud services—while gauging the level of consumer interest in adopting them.
According to the International Telecommunication Union, close to 80 per cent of the world’s population has access to some sort of mobile device. As the International Data Corporation (IDC) predicts, smartphone sales will overtake PC shipments by 2012. Cisco’s survey of 1,016 American mobile consumers represents just a slice of this vast potential market, yet the results shed light on the current and future interests of such consumers throughout the developed world.
Among the survey’s mobile-consumer respondents, 45 per cent already have smartphones, but that percentage could rise to 60 per cent by 2013. Many appear ready, able and willing to embrace the mobile cloud. In fact, the Cisco IBSG survey found that these mobile consumers already have their heads in the cloud. More than 50 per cent access web-based email, social networks, shopping, and music services through their handheld devices. One-fifth of surveyed consumers are expanding into advanced cloud services like web conferencing, content sharing, and online data storage.
In America, a picture emerges of a young, affluent and tech-savvy demographic of smartphone users. As the Cisco survey revealed, the average smartphone consumer is, at 37 years old, younger than the average non-smartphone user, who is 50. Smartphone users’ average annual income weighs in at US$96,000, while the average non-smartphone user earns US$70,000. Not surprisingly, smartphone users are quicker to adopt new technology. Almost all of these survey respondents are already making use of some cloud services—including storing and sharing content—on their PCs. More than half expect to be using web-based email, social networks, and shopping on their mobile devices within the next two years. For service providers, the potential of this vast, growing and cloud-savvy demographic should be clear.
As for next-generation cloud services, the smartphone-using survey respondents showed great interest. There is particular enthusiasm for all things video, with 70 to 80 per cent of smartphone users looking forward to enhanced opportunities for watching, recording and calling visually. Seventy-five per cent showed a strong interest in utilising the speaker and microphone features on their devices for speech-recognition services. Seventy per cent of the smartphone users were interested in being able to transfer multimedia content across multiple devices. These are but two of the sophisticated next-generation services that will be best employed under the cloud.
Another survey reveals that few mobile consumers are ready to pack in their PCs just yet. In fact, they look forward to greater consistency, compatibility and connectivity with their home or office machine while they are on the go, thanks to the mobile cloud. One cloud-based capability—the virtual desktop infrastructure service, or VDI—would allow mobile users to view the identical desktop configuration as their home machine on a mobile device. More than half of the smartphone users surveyed rated this service seven out of ten on a scale of interest. Fifty per cent of the smartphone users surveyed viewed the inherent simplicity of such an arrangement as a key to greater productivity.
All of these services will be available on potentially cheaper, dumber, “thin-client” devices, since with the migration of data and apps to the cloud, processing power and hard-drive capabilities will become passé. Half of all smartphone users said they were very interested in such a scaled-down device. Consumers are drawn to the potential improved security, since storage of apps and critical media content is no longer limited to a single, vulnerable piece of expensive hardware. They are also attracted to the fact that the technology would stay current.
Though limited in power and storage, with access to the cloud, the capabilities of “thin-client” devices appear limitless to forward-looking consumers. Giving less concern for storage capacity and power, makers of high-end smartphones could be free to add more sophisticated features like dual cameras and speech-recognition capabilities. The cheaper, simpler devices could potentially expand the audience for SPs by driving smartphone penetration into lower-income demographics while encouraging non-smartphone users to upgrade.
One ongoing concern, however, is the past reliability of mobile SPs. The fear of losing crucial content on a single gadget is real. Yet, with so much content and so many services dependent on the cloud, consumers will need extra confidence in their service providers. Even one well-publicised security breach in a cloud-centric network could potentially disrupt the entire industry trend toward cloud mobility. This increases the need for SPs to deliver confidently end-to-end security from their data centres through their network environments and right down to the devices themselves.
Cisco ISBG also believes that consumer confidence will rise with the ongoing acceleration to 4G technologies and with further increases in stability and reliability. The good news for service providers is that consumers already like them. On average, Cisco’s survey respondents rated their general level of satisfaction with their provider at 7.8 out of ten. Almost 50 per cent of mobile users cited SPs as their preferred channel for cloud services, compared to 20 per cent for web companies.
There is clearly a natural affinity between cloud mobility and service providers, but certain challenges stand out. For starters, the rising demand from cloud-gazing mobile consumers will drive the need for a quality of network experience that makes the delivery of apps, content, and services appear seamless. That means low-latency, high-bandwidth networks able to accommodate video and other high-data transport operations among multiple devices, fixed or mobile. As it stands, such demands may tax the functionality of some existing networks.
Overall, service providers will need to rethink their role in the value chain. As a minimum, they will need to provide the basic architecture to deliver cloud services. Beyond that, should they create, own and manage their own data centres? What role should they have with software developers? Should they be developing their own mobile applications, buying up third-party application providers, or partnering with them?

SPs will need to address carefully these questions and plan their strategies accordingly. Regardless of how they do it, they will need to deliver next-generation cloud-based services. Clearly, the mobile cloud presents an auspicious opportunity for service providers to monetise not only the retail experience, but also the wholesale relationship, which is here and growing fast. As smart gadgets continue to challenge the pre-eminence of PCs, and as consumers continue to embrace the mobile cloud, service providers have an opportunity they cannot afford to overlook.

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