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What is The Cloud?
Everyone is talking about it, so what exactly is The Cloud?
Well, the cloud is the internet, so cloud computing is essentially internet-based computing. It works by providing shared resources, software, storage and information to computers and other devices on-demand, much in the same way as electricity. It allows users to access any of the services available on a particular “Internet cloud” without needing any previous know-how, or knowledge at an expert-level on managing the resources involved. In layman’s terms, it is, in many respects a cover for the building of virtual cities we could call “virtual cityscaping”. It is the bringing together of all the user required ingredients in such a seamlessly integrated two-way communication, that everything is in place for you to move your business, part of or in whole, into one of the rapidly growing virtual cities springing up.
What we are seeing is the birth of IBM city, Salesforce.com city, Amazon city and Microsoft city all competing amongst one another to promote their city, just like a tourist board would do. Companies in the next few years will need to consider where they should base their virtual headquarters or at least some of their offices to their virtual city with the hope that one day they will move over their whole operation and close down most of their IT back office.
Let’s take for example Amazon city. This is without argument the most powerful online retail empire in the world. Jeff Bezos (founder of Amazon) realised that he had invested billions in the most state-of-the-art infrastructure and technology and had tamed the user experience to a fine art. However, it appeared that he recognised he had both huge excess capacity and unleveraged technology that only he was using, and knowing that Amazon cannot continue to rapidly grow with its retail empire forever, looked again introvertly. He looked at what he had and decided that it was not really a virtual shop anymore but a virtual retail empire, sitting in the emptiest virtual city that he had built only for himself. He had the widest streets with millions of shoppers daily, it was open 24 hours a day with bright blue skies all the time, it had the best security manning the doors to the turnstiles into his business but as soon as the customer left his shop they disappeared into the virtual Ether (largely nestling around Google search where users refine their interest and intent).
So, what does he do? He goes into the second oldest profession in town and sells virtual real estate; real estate which is arguably infinite in size online. Here other companies can happily enjoy moving to his virtual city and benefiting from the scalability and reliability of what he has put in place.
You could write a book on the subject, as it appears many have already done, but once you consider the cloud computing revolution more akin to ‘cityscaping’ what can we draw from this and how will this affect business?
Well, business start-ups taking advantage of the cloud will be able to get to market a lot quicker. There is no longer a very important traditional barrier to entry because you needed to invest substantial amounts of money into infrastructure. In fact you can start with virtually no infrastructure commitment, just the knowledge that if your business does well then you can “pay as you grow” (another definition of cloud computing).
This has huge implications for online business in general as not only does it mean small businesses can compete more on an equal footing with large organisations, but with the global internet being as it is, anyone with an idea can build and launch a scalable product through the cloud. The 'freemium' business model is one that will remain and as for SaaS, this is now expected as standard. With the likes of IBM, salesforce.com and Microsoft all offering free trials to join their cloud, we have some of the largest companies in the world planting this model. This has changed the way companies are doing online business. Arguably selling to a global audience is hard to do if you are selling one at a time and ‘freemium’ becomes more of a necessity. The same is true of SaaS - companies expect to ensure that you ‘solve a problem’ and as long as the pain point is removed, companies are then willing to pay for this alleviation of pain in relation to the size of the pain.
With the benefits of global opportunities it is not so much a requirement to develop an end-to-end solution, rather it is more important to be able to talk with other complimentary products to provide the complete solution if need be. Salesforce.com recognised this early on and opened up the possibility for complimentary applications to bolt into their central proposition and up-sell. As a result Salesforce.com now have over 82,000 clients around the world with competition finding it hard to keep up with the pace.
So, which of the virtual ‘cityscapers’ will win? Given the very wide land-grab going on, with the likes of Google and Amazon offering free rent periods with all fixtures and fittings in place, you can see that gravity will pull certain types of business in one direction of joining a specific cloud. As consumers enjoy the benefits of the improved experience, more businesses will want to set-up business in their virtual city and so on.
From Cognesia’s perspective it will be interesting to see how we visualise the virtual people arriving in the virtual city? What do we know about them? Where have they come from? What are they doing? And, from a commercial viewpoint, what are these visitors interested in buying? These virtual cities need some ability to provide a unified view of these virtual people and this is one of the key ingredients to providing a better overall experience, without of course impeding on ones privacy but to work in tandem.
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