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Applications in the Cloud with Ken Zita moderating, Mike Hill (IBM), Peter Coffee (SalesForce). Innovation not coming from network, it’s coming from somewhere else. End of economics of bandwidth, ubitquity of broadband and IP, decoupling to other places of network (cloud): shared and virtual platforms, data centers, etc. Service providers (new world) are better at this than (old world) carriers. Tools are better: broadband, tools, virtualization (home and business), outsourcing.
What’s this industry about? Mike: history of IT: stored programs and mainframe to client-server to cloud. Access IT services getting easier, cheaper to provide services to end-user. Cloud is coming from consumer industry, being followed rapidly by enterprise (early adopters), allowing creation of development platform and new opportunities. Impacts are a challenge to service and network providers (cost, position of service providers with their clients). Peter: important distinction: client-server gave access to computation. Cloud gives connection: shared calendar, collaborative groups, whatever it is as soon as you define what you want. Now very straightforward to achieve, and it’s not something you sell to people. People have changed their expectations in use, pricing, what’s being bought (experience and function). Self-service model. Opportunistic access means more stuff gets used.
In telecom context, now competing with IBM, Google, Salesforce, etc. who are providing services for 97-98% less in cost. People are drowning in information, they want support for actions. Services business: organizations have 10% marketshare, lots of room for many players. They need to figure out what they do, who they can partner with, what their core competencies are. For example, IBM is about delivering platforms, e.g., for service providers to run their businesses. Cooperation-competition is key, e.g., Salesforce uses and competes with Oracle. Salesforce services being resold by service providers as part of business suites (BT small enterprise suite), extend based on local knowledge of market.
Many telecom industry is relatively clueless about application layer. Peter: in Europe and Asia, sale of bulk bandwidth is not the high margin product of the future. Mike: core competencies drive new roles, telecoms do great infrastructures, need content and need to understand where profit models are (partners), leveraging other opportunities.
Old days: big switch with chosen features. New: software driven. How to lead innovation services? Mike: old model is great for proprietary world but stifles innovation. Cloud is attractive because we can build a platform that’s open to innovation by more people. Need to create the environment, attract partners who can work with that platform. Peter: iPhone App store model: enables experience. Telecom services competing with the experiences being enabled (full service recommendations, for example). Value of relevant bits higher than plain bits. Mike: billing transactions: platform enables partners, but ISPs don’t want to provide billing. Data created from that usage is valuable for advertising, packaging offerings. Peter: smaller the billable transaction, the more volume you’ll do. Example: paying for softdrink through cell phone. Will be much more part of our lives.
Carriers used to benefit by more control, mobile environment is still closed. Whether it gets opened to partners, and how does that impact cloud services? They lost first battle on broadband, value is being created on outside. In future, real value is being created in cloud? Mike: if telcos want to succeed, they need to be one of the players. They’re well positioned to do the platform, and they (can) cut deals with anyone with a good package. Good opportunity in mobile too. Challenge is having to learn (as IT industry): you never go it alone, it’s part of an ecosystem, need to think your role in ecosystem, what services do we create that enable others, how does whole ecosystem create value? Carriers: what platforms, markets, services; how do we make it easier for everyone? Peter: pushing it down closer to need, not look at last war and figure out how to win that war. What’s the most compelling version of serving customer needs? (May not be 3 page article on a mobile device). Also, need to focus on brand (Ford + Microsoft brands) to monetize value of customer’s attention during life of a good or service. Members of an industry can come together to share mutual value of growing innovation in a marketplace. More than just standards, it’s about developing a part of an ecosystem.
Public sector: shared and private clouds: obstacles (e.g., service level agreements) and opportunities (public sector institutions getting a lot of bandwidth fast). How to create stability, clarity in emerging markets? Peter: market intelligence predicts explosion in growth in service markets, swapping systems and services as needed, priced “as needed” for number of seats used. Mike: biggest set of clouds in China, platform to bring software developers into their region. Same model considered in UK, but why does each county/town need to create their own? Industry-scale cloud for many to use and share, more function to citizens in a geography or emerging market is key.
Peter: everyone in the world has heard about cloud computing, now moving toward identifying, enabling relevant pieces.
Mike: if you’re a service provider, put up a test cloud. 3-6 months return on your investment. Every cloud business is a marginal investment.
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