This entry was originally posted on the CloudSource blog in March 2012.
Up until now we talked about cloud as a new way to deliver existing functionality. We discussed how to choose which applications to position where. But is cloud just a new way of delivering IT functionality? I do not believe that it is. Yes, cloud can help the CIO cut costs by delivering services differently, but cloud can also serve as a basis for innovation, and that’s what I want to discuss here.
Fundamentally there are four key areas where cloud can help innovate. Let me highlight those quickly:
- Business process innovation: transforming business processes to improve operations and change the customer/partner/supplier/user experience and facilitate interactions.
- Product and Service integration: develop innovative product and service combinations to build a brand new user experience and increase product sales
- Eco-system integration: improving the flow of information and potentially products between the members of an eco-system delivering products and services to the end-user
- IT innovation: Take advantage of new technologies to deliver new types of services to the users
Obviously all four rely on technology innovation to achieve their objectives. Cloud is one of these innovations, social media is another, and mobility a third. I believe that the combination of these three gives us the opportunity to create new businesses, new business approaches and to provide companies the capability to grow their business cost effectively. I’d like to use three examples to demonstrate this. First, I want to dwell a little more in social media, then about product and service combinations and finally about eco-system integration. So let’s start.
Social media analytics
Whether you like it or not, your customers are talking about your enterprise. If they are happy or unhappy with your products and services they will tell you. In the old days, those discussions were taking place in the bar, but now on they are happening on Facebook and Twitter. That suddenly gives them a large geographical coverage. This is why it’s important to regularly analyze what is being said about you in social media. I remember a bed & breakfast place in southern France that saw its reservation dry out because an American couple had not liked their breakfast. It took the owner to contact the couple, discuss it with them and have them remove the bad referral for business to return. This demonstrates that it can happen to anyone. But the issue is how to find out and how to be warned about what is being said. This is where big data comes and plays. Social Media information is located in the cloud, so using cloud services to analyze it is a no brainer. But most of the data is non-structured information and we all know many nuances can be put in an English tweet. Sentiment analysis for example, reading the mood of the average tweet, is really important. This is where tools from companies such as Autonomy come in. They review what is being said and come up with reports allowing you to fully understand the current mood and what the attitude is of your customers and prospects.
Let me give you a brief example. HPLabs analyzed the comments of YouTube video trailers for new Hollywood films. This allowed them to predict the first weekend box office results with an accuracy of over 92 percent. Think what the film industry can do with such results.
Product and service combinations
One day I was in a train with a young developer of a GPS company and we had a discussion about the cloud. He told me his company was quite successful but that this became a problem. Indeed, when a traffic jam occurs all the cars receive a notice and calculate an alternate route. As all their GPS’s use the same algorithm, they obviously calculate the same route. This occasionally results in a GPS traffic jam on the alternate route.
Let’s now look at how the GPS company, mobility and cloud could work together to solve this issue. As soon as the traffic jam occurs a cloud based model is initiated. It first checks, using mobility, how many GPS’s are in the area of the traffic jam, calculates multiple alternate routes and instructs the GPS’s which route to choose. If there happens to be another traffic jam nearby, the cloud-based model can even avoid that area. Think about the difference in user experience obtained by integrating the product, mobility and cloud.
Let me give you another example. Ford Europe developed a new concept car, called the Ford Evos. This one is fully connected to the cloud, it’s the connected car. A short video on YouTube shows you a very different user experience. If we combine this with the move to sensors we currently see, the “internet of things,” the car can react to real-time road conditions, all because it’s integrated with the cloud.
Many products can be transformed by integrating a mobile information transfer. A camera retaining information on the place photographed, a fridge managing its replenishment, etc., are just the first examples of such trends. Cloud can really make a difference here. Innovative products help companies grow their business.
As you probably know, I spent many years looking at the manufacturing industry and my specialty was supply chain. The reason I got involved in cloud was because I saw it as a way to better manage the supply chain. This is one form of eco-system integration. If companies can share information with their suppliers and their channel, understand orders, forecasts, stock levels, manufacturing capacity and unexpected events, they can manage the supply chain better at a lower cost. Indeed they can reduce safety buffers and liberate cash because of earlier visibility into what is happening.
Why hasn’t this been done before? Well the discussion often turned around who would set up the collaboration platform, pay for it and host the information. With cloud, this can now be done by a neutral service provider, and all players can “pay-per-use.” This is a typical example of business process innovation.
Fiat Brazil did an interesting experiment over the last two years. They designed a brand new city car with more than 17,000 potential customers. Indeed, they established a social media site in the cloud, through which they had a dialogue with users. Those could post suggestions, vote on ideas, make comments, etc., using an ideation platform. It allowed them to create the Fiat MIO, a brand new concept car that should be produced in the near future. And guess what? They already have 17,000 potential customers, right?
All examples I gave here use cloud computing solutions to do things we don’t do today. There are plenty others. Each example gives companies the opportunity to grow their business and take market share away from their competitors. So, when discussing cloud, we should not limit ourselves to the “traditional” discussion of cloud as a vehicle to do the existing differently. Think about what else you can do with cloud to improve your business processes, change your products, integrate your eco-system or deliver IT innovation. And if you feel like it, don’t hesitate to share your ideas with me.