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The Mobile Cloud: Opportunities & Threats

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
1/25/2013
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I met with an investor from China recently. When I told him my major interest today was the mobile cloud, he became quite animated, and agreed, saying, "That is the biggest development in all of telecom and IT." This would hardly be remarkable, except for the fact that I don't find that there is much recognition of, or agreement with, this statement in the industry today. The new Heavy Reading study, "Mobile Cloud Apps: The Driving Factors," reveals a seething world of emerging services and functionalities, all geared to mobile devices and users and built on mobile clouds. These developments stretch across verticals, from health and automotive to many others, and incorporate capabilities ranging from speech input/output to artificial reality, facial recognition and much more. Yet many don't even recognize or understand the mobile cloud today. This is obvious from what is transpiring in the enterprise space. Enterprises are struggling to deal with the "cloud" and they have issues dealing with the spread of mobile – summarized in the slogans BYOD, "bring your own device," and "consumerization." But these are viewed as two distinct and separate issues: 1) cloud and 2) mobile. If we look at typical enterprise motivations and objectives, they are probably about as follows, in many cases:

  • Protect the value, security and long-term viability of their huge investment in legacy systems and databases.
  • Deal with the plethora of issues surrounding migration of systems and functionality to the cloud in general.
  • Deal with issues surrounding mobile access for their employees.
  • Figure out how to address expanded access to information systems for partners (e.g., distributors, suppliers) and even customers.
As for non-enterprises, industry participants, close observers of the industry and others, we run into an attitude best summarized as: "Yes, the cloud will be very big phenomenon. But mobile will just be one way of accessing the cloud. So why worry about the mobile cloud?" This is soothing, but short-sighted. With the potential for 3 billion or more mobile devices to be accessing the mobile cloud in the next three to five years, mobile will not be simply "one way of accessing the cloud." It will be what the cloud is all about – the mobile cloud. Those that wait around are risking a lot. Very big companies often assume that they can be late in major developments and their vast resources will allow them to recover and forcefully gain leading positions. It doesn't really work that way. We saw this with Microsoft in the '90s, content to be late to both the Internet and mobile. They never recovered leading positions and are now threatened by companies that were insignificant, or nonexistent, at the time. Today, leading companies that dawdle about the mobile cloud are running major risks. Just as the Google/Facebook-era companies of the '90s and early 2000s have turned into giants, it's time to address the mobile cloud before "no-names" – maybe a FeedHenry or Airbiquity or Castlight, or any of a horde of emerging players – wind up overrunning your business. This certainly applies to the laptop and desktop computer makers. The mobile cloud supplies storage and processing power for a host of devices, from tablets to smartphones to thin and very thin clients. Only a limited segment of the market will need local (in the device) processing and storage capability. The telecom carriers are threatened with more and more means of bypass and diversion of customer business and control as the mobile cloud proliferates. For enterprises, the mobile explosion is changing the nature of assets that need to be managed and accounted for, with corresponding changes to the fundamental structure of IT departments and responsibilities. Moreover, it is becoming clear that, increasingly, business experimentation with new products and marketing will be done through the cloud. The markets that can be reached are billions of mobile devices, and they will be relying on the mobile cloud. As my friend said, the mobile cloud will be "the biggest development in all of telecom and IT" – full of opportunities ... and threats. -- Victor Schnee, President of BSG Advisory LLC, special to Heavy Reading

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