Techaisle Blog

As of March of this year, half of all US mobile phone subscribers had a Smartphone. This in my opinion is more than just a number. It is a tipping point for applications. It is safe to say that we are now in an app economy as far as mobile phones are concerned. But the number has significance beyond just being a tipping point because it is a tipping point for thinking about applications.

What do I mean by that? Applications designed for the desktop or enterprise environments typically exist in a sandbox. That sandbox can be as small as a user’s desk or the entire enterprise but nonetheless a sandbox. Their function and focus is to provide the tools needed to complete a task within the confines of that sandbox. But these apps for the most part ignore user contexts. For example, a CRM application typically does not take into consideration a user’s location nor does an app like MS Office (other than language localization). But mobile apps need to be different because mobile is different. A mobile phone is not just another device. It is a beacon in your pocket that is constantly aware of where you are, what’s around you. It is also aware of your preferences and social network and what transactions you prefer. And one more thing – mobile identifies the user uniquely, not just from a device standpoint but as an aggregate of all the factors mentioned above. So it follows then that Context must define Content. But what are these contexts that app developers should consider? There are fundamentally three.

• Location

 

• Contacts/social network

 

• Calendar/time

Not all apps can take advantage of all three but should take advantage of at least one. It is hard to say that one of the above mentioned contexts is more powerful or more important than the others. Each can be powerful depending upon the app or the content. For example, ecommerce applications benefit significantly from taking advantage of location while for a CRM app, contacts and calendar are more critical than other contexts.

Context = Creative Destruction

The use of contexts in app development is not just about driving new user experience and value for users; it is about driving new business models as well. The use of contexts increases the app’s value to the point where in many instances a new revenue model can be implemented. For example, wireless phone companies that by design are able to capture user locations can monetize this “data” in a variety of ways, advertising being one of them. Similarly apps that used to be sold on a per license basis can shift their revenue models to leveraging contextual data as opposed to per user charges. In that respect, context is not only valuable, it is disruptive. The first wave of context aware apps we see have typically been those that would anyway have been free - Apps such as Instagram, Pinterest and Zoomingo (local shopping application).

Increasingly, I predict that we will see whole industries that shift their business models to take advantage of contexts. Newspapers and media are a prime example. While many newspapers are experimenting with paywalls, I believe that a larger opportunity exists for them to exploit user contexts. News publishing today uses what could be termed as an “in-out” model, that is publishers and editors decide what content should be created, publish it and hope that readers will find it interesting. It is the traditional content first driven approach. But what is relevant to me as a reader depends upon my current context. And what is relevant for me today may not be relevant tomorrow. It calls for a more dynamic approach to presenting content, where content to be presented is selected based on a combination of contexts. In other words, an “out-in” model. Doing so improves their ability to deliver advertising thereby potentially increasing revenue.

The same is true for retail. Most mobile retail websites are mere reproductions of online properties but should they be? Online retail websites suffer from the same contextual ignorance as other apps. For example, a mobile retail app would be much more powerful if it could detect a person’s physical proximity to a store. Imagine how small business retailers could benefit from such capabilities. Think about applications like Endomondo that track your physical fitness activities. Well over 5 million users have downloaded and use Endomondo. Consider how useful that data would be to an outfit like REI for targeting and creating customized offers. Here’s another example and a personal one. I am an avid photographer, but not a very good one. I try to learn about photography but that typically happens before or after I am out taking photographs. But the most appropriate context for me to quickly learn tips is when I am taking photographs. Cameras already track locations and embed them in pictures. They already sense light conditions. But this data is not used to educate the photographer! Could it be used to provide tips at the time the photo was being taken? Or could suggestions be given as to how to improve the photograph with examples of the best possible settings? Would it make amateurs like me to more likely to buy a particular camera brand? Would it facilitate brand loyalty? I believe the answers to all of the above are a resounding yes!

Context = Engagement

Indeed, most websites retail or not suffer from the same issue. Even corporate, customer facing websites are mere one-way information dispensing media rather than a context aware, interactive medium that facilitates two way engagements. In fact the very term “engagement” needs to be redefined in the mobile age.  Engagement was largely defined in terms of giving users the content they want/need. But in the mobile age, I believe that engagement should be about the interaction users want and need. It follows then that if context defines interaction then adding contexts fuels a more powerful engagement that can impact costs and revenue.

In Conclusion

Successful mobile applications need to score high on relevance. Relevance is a function that takes into consideration not just content but also all the factors that surround and influence the appeal of that content. This means that app developers have to re-think their applications for the mobile age. And not just re-think but they have to get mobile DNA into the entire organization.

 

Since the emergence of the Internet in early 90s, experts have been predicting the use of software applications over the Internet, whereby users did not need to install any applications software and servers on their own premises. Instead, they could simply connect to the Internet and access their applications and data from their service providers, much like the telephone, where all the telephony networks and infrastructure are installed at the telephone company’s operating centers and users only need to buy a phone to use all the telephone-related services they need.

The concept was particularly appealing for small and medium businesses (SMBs) that did not have adequate financial and technical resources or the scale of operations required to install the required IT infrastructure in-house. Indeed, up until recently, many SMBs found themselves at a disadvantage in competing with large companies, which implemented the new (and often resource-intensive) complex applications to improve their productivity, develop new products and services better and faster, and provide superior customer service.

In recent years, however, the playing field has begun to be leveled with the emergence of cloud computing, whereby the servers, applications and networking equipment are installed at an external hosting company and users can use the applications they need using any device they want (e.g. desktops, notebooks, tablets, smartphones) without incurring any large capital expenditures upfront, paying for the use of applications on an as-needed basis. One of the most famous examples of such cloud computing is the CRM application offered by Salesforce.com, the single largest pure play cloud computing vendor in the world. While large companies spent tens, or even hundreds of thousands of dollars to install, maintain and periodically upgrade their CRM applications from large vendors like Oracle and SAP to serve their customers, SMBs can now acquire similar capabilities by paying a few dollars a month per user.

Several changes have taken place in recent years and now the stars seem to be finally all aligned for a rapid and sustained growth of cloud-based solutions.  Enter cloud computing accelerated by mobility and the work from anywhere and anytime culture.

The New Economy and Increased Demand from SMBs
The dramatic shock to the global economy in 2008 had a multifold effect on the decision making of businesses. With sharp drop in revenues and profits and decreased availability of credit, SMBs found themselves starved of the capital they required to invest for in-house IT infrastructures to meet their increasing IT needs to improve their employee productivity, develop new products and services and provide higher levels of customer service to compete in the globalized economy. With the global economy unlikely to recover anytime soon and resume its long-term growth of earlier years, SMBs have become quite averse to make large capital investments and prefer to pay on an as-needed basis. Cloud computing meets this need of the SMBs by converting capital expenditures into operating expenditures.

Increased Employee Mobility
A second factor that has increased the demand for cloud solutions is the increasing mobility among SMB employees and their need to be able to access their applications anytime from anywhere using any device (e.g. desktops, notebooks, tablets, and smartphones). Cloud solution providers have developed new capabilities in recent years that allow SMB employees to do precisely that. Applications and data can be accessed over fixed and wireless connections and they adapt the data views automatically depending upon the access devices being used by the mobile workers.

Technological Developments
Cloud computing is also being enabled by the fact that new applications are increasingly being developed with Internet delivery in mind rather than just adapting the older client-server technologies for the Internet. A key element of this new trend is the evolution of integration platforms that allow users to integrate the web-based and on-premise applications to work together and exchange data on an as-needed basis automatically. Over time, this will allow SMBs to have multiple applications that work seamlessly like a single system without SMBs having to be concerned about transferring the data accurately and quickly for use by different applications thereby reducing their needs for internal IT skills.

Cloud computing is also becoming more economical by the increasing use of virtualization, which allows use of fewer servers to serve the needs of multiple SMB customers. Virtualization also allows for greater security, backup & recovery and higher levels of IT availability, which have become increasingly important for SMBs with their increasing reliance on IT.

Development of the Cloud Computing Ecosystem
Finally, a more complete ecosystem is evolving, consisting of cloud solution developers (e.g. Salesforce.com, Netsuite, Taleo, Concur) , infrastructure providers (e.g. Dell, IBM, Cisco, HP, etc.), hosting companies (e.g. Equinix, Savvis, Rackspace) as well as local channel partners that collectively have the capability to develop and deliver cloud-based solutions to the large number of SMBs spread out all over their markets. Furthermore, collectively they have the financial & technical resources and credibility to convince SMBs to adopt the new technologies.

Tavishi Agrawal
Techaisle

The World is Flat (© Thomas L. Friedman) and so has become IT, especially for SMBs. With a Flat world, rises an opportunity for SMBs to employ workers who are globally distributed, travel and telecommute. With a Flat world comes Flat IT. And the IT vendors are missing the dialogue with their SMB customers- some vendors more than others. They are also missing a new understanding of SMB IT adoption cycle.

But we are getting ahead of ourselves. Let us first understand the world of Flat IT.

Waves have Evaporated to Form Clouds

Analyst firms typically use words such as IT waves or eras in describing SMB IT adoption - client/server wave, networking wave, Internet wave, etc. There is nothing wrong with this wave theory except now that there are no more waves left, all water is evaporating to form clouds. But some analysts still continue with that philosophy and call the coming wave as mobility wave. These do not do any good to either a vendor or the end-customer. Mobility started with notebooks & Wi-Fi. An SMB does not buy IT considering the wave, it does not even think whether the wave is waxing or waning. A typical SMB buys IT because it needs IT and the SMB with the help of channel partners becomes smart enough to understand what IT to buy to make itself more efficient, productive and profitable.

Waves were relevant more than a decade ago when technology products were evolving in piecemeal basis. Today all technologies are available at the same time and its adoption among SMBs is dependent upon the business plan.

Building Block IT

Enter the building blocks. SMBs started off their journey into IT by unknowingly using simple building block concepts. Their first purchase was always a PC which served as the foundational block. When they added employees and file sharing became important, they built a network and added a server – the next block stacked up on the foundational block. When they reached a certain size they added more servers, the third and subsequent blocks became applications such as CRM, ERP and Line of business. All of these blocks could not be added without the existence of the previous block. Very soon when an SMB reached a mid-market level of operation, the blocks were neatly stacked one on top of another. And when the blocks became vertically unstable, they brought in external experts such as consulting organizations to help manage these blocks and possibly break them into small chunks that could be easily maintained. SMBs looked for Enablement.

IT vendors thrived. Dell concentrated on the foundational block, Cisco connected the blocks, HP played with all block layers while IBM refocused to the top layers. Vendors like Microsoft, SAP and Oracle provided the layers that enabled the blocks.

The process of an SMB growth and its relative steps to absorb IT were steady and predictable. Some SMBs stacked the blocks faster than others but steps to get to the top of the block were always same. It was also dependent upon the financial capacity of an SMB to the extent that those with large dollars available for investment built the blocks faster not necessarily having the same end-results as SMBs with limited investment capabilities and which moved slower. Call it cutting edge versus laggards, but such nomenclature also never proved that the cutting edge SMBs were more efficient or profitable than the laggards. IT vendors and channels made money as they exploited the IT imbalance among various SMBs creating a race to reach the top of building blocks as fast as possible.

Flat IT

Enter Flat IT. Cloud, mobility, virtualization, and managed services have effectively toppled the blocks down in one fell sweep and have laid everything flat on the table. SMBs are now automatically empowered but they do not know it yet, because nobody has told them so directly. The concept of cutting edge and laggard has been torn apart because
it carries little meaning as SMBs now have a rich menu of solutions available that can be plugged into in a very short time. Now it is not a race to the top, but how can an SMB reach its full potential in the shortest period of time.

In a Flat world, with Flat IT, similar technology is now available across all countries and gap between developing and developed worlds is narrowing. In some of the emerging markets, IT is not only Flat but leapfrogging technologies as building blocks are not fully present. Where converged infrastructure is becoming a possibility, Cloud services will
be delivered via wireless.

Next week we will discuss how SMB IT has become Time & Size Agnostic and how the SMBs of today are transforming themselves.

Anurag Agrawal
Techaisle

Value Shift – It’s a broad term describing a directional shift within an industry. Every industry goes through such shifts periodically. Most of the time such shifts create new challenges and new opportunities. The impact is almost always big – industries re-structure, leaders fall and new leaders are born. Value Shifts rarely occur as a result of a single phenomenon. They are more akin to little ripples that build to a tsunami.

The computing industry has seen its share of value shifts over the last 3 decades – perhaps more rapidly than any other industry. That’s what makes it so exciting! I believe that we are poised for another such shift. It’s not about the Internet, Web 2.0, SaaS or Cloud Computing – these are merely ripples at the end of the day. The emerging Value Shift is about Device Independence.

The computing industry to date has largely been dependent upon PCs. In other words, the industry’s fortunes were tied to the adoption of that one single class of device. Everything else flows from that. Microsoft made the most of it earning billions as did others – including Google. But that dependence appears to be breaking down. I am constantly intrigued by two things these days – the phenomenal success of the iPhone and the current rage in PCs – Netbooks. After all, having spent the last 20 years tracking an industry where speeds, feeds and computing power have ruled, how does one explain people (in droves) buying a lower power platform with shrunken keyboards and screens? iPhones let you view the same websites and web applications that you access from Netbooks, notebooks and desktops. The experience from a usability standpoint is different for any individual device, but you can access the same information. And it’s not limited to websites and web apps. You can use any number of free products to access your PC using an iphone (read about it here ). In other words device independence.

The “Information Fabric”

Padmasree Warrior, the CTO of Cisco puts forth a compelling prediction – the emergence of an “information fabric”. I believe it. The fabric can be defined in many ways and a many levels – from the lowest level network protocols to the highest level where information is consumed by individuals and corporations. Most importantly, the information fabric, I believe, will not limit itself to allow consumption and utilization of information by a single device or even a class of devices. Instead it will enable consumption by a whole range of devices leveraging the unique user experiences of each device.

The Ripples that Matter

It’s not difficult to see the key technologies that are driving this Shift. Of note are continued advances in virtualization and remoting where performance and user experience is improving rapidly. But also worth noting are storage technologies that are becoming common to different kinds of devices – specifically flash storage, whereas in the past application performance was somewhat dependent on type of storage used. The commonly understood technologies impacting bandwidth, throughput improvement, network capacity, data center optimization also continually push us towards device independence.



It’s All About Productivity

Ultimately the move towards device independence is about productivity resulting from the freedom to use the device that best suits the work environment at any given point is time (a smartphone, a PC, a Netbook or even a Kindle). A lot of pieces need to fall into place and getting to true device independence will take a long time but there is no doubt that the ripples that started this value shift are transforming into a Tsunami.

Abhijeet Rane
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