We are in the middle of a second major paradigm shift in IT (information technology). This is not about simply going from web1.0 to web2.0, but something that’s going to have a major impact on how we work. I am referring to the disruptive force of “cloud computing.
I’ve been focusing on brand strategies in the technology sector for quite some time now and I’ve seen some resemblance in cloud computing hype similar to that of social media on the web. Further investigation led me to identify some of the underlying implications and the cumulative impact of them on businesses.
Image courtesy of Wikipedia
Primary Characteristics
Cloud computing is basically a dynamic computing environment that’s delivered over the internet with on-demand resources that are scalable and flexible. In the old days businesses had to purchase hardware, software and then hire IT staff to manage them. With cloud computing, you simply pay for the service on a per usage model, as known as software-as-a-service (SaaS).
Benefits: Eliminate the risk of owning and maintaining software, hardware and hiring resources. It allows business to shift from capital expense to operating expense (think of it as leasing instead of buying) typically with little to no upfront costs.
Concerns: Still in the early stage of the hype cycle, unproven ROI, and slim margins. Market is not completely ready to accept this model, but few early adopters have incorporated cloud with existing infrastructure forming a hybrid hosting model.
Social Media is a dynamic publishing technology that’s highly accessible and scalable taking place on the internet. Traditionally, brands have mostly monologues with their customers via old media such as TV, newspaper, magazines and PR. With social media, you have real-time dialogues (such as Twitter) that encourage interactions allowing people to connect globally to form relationships.
Benefits: Potentially an inexpensive low barrier to entry marketing vehicle compare to traditional media channel. Allow businesses to expand their reach and own their channel of media distribution. Great for customer relationship management, reputation management, and has the ability to go viral.
Concerns: Also in the early stage of the hype cycle with indirect, difficult to measure ROI. Consumers aren’t all ready to use social media to communicate with brands, and there is a lack stickiness in user adoption (with the exception of Facebook maybe). Brands that had success leveraging social media use it in the hybrid marketing model in conjunction with traditional media.
There are some similar characteristics with both cloud computing and social media. Mainly both are fresh concepts that challenge the traditional mindsets. In addition, both adoptions are accelerated by the current economic downturn forcing companies to reduce financial and operational risks associated with technology (so going with cloud makes more economic sense) while evaluating new ways to market their products and services (more cost-effective brand strategies).
Frankly I find it interesting that one of the earliest form of cloud computing is ironically the first online social media tool – email.
When I created my very first email account on MSN Hotmail back in 1995, little did I know that’s the first form of cloud computing. Since then I’ve been socializing with family and friends sending emails back and forth, reading replies like comments on a blog post, or simply write short messages in the subject line without content similar to micro-blogging.
Today, email is mostly delivered via the cloud (over the internet) and is arguably the original online social media tool.
Relevance to Businesses
Even in these cost-conscious times, the moniker “trusted advisor” or “trusted brand” still holds value as customer relationship is the top priorities for many businesses. This is why social media became an attractive tool for companies now because it’s all about servicing the customers and optimizing client engagement. End users look to experts to guide them via the decision making process of purchasing branded products and services.
As the IT landscape continues to evolve, we need to rethink how we work, how we sell, the tools we use and the processes we implement.
Nobody wins competing on price alone, even private label brands are thriving by providing excellent value-for-money propositions against premium brands. We have entered into a new era of converged technologies where IT solutions are driven by business needs and management needs to focus on building meaningful trusted relations moving forward.
The secret is to stay relevant with IT and seek new ways to abstract value out of your business.
This is the time to strengthen your brand and focus on your brand strategy. Review your operational status and plan for future growth is the key to success when economy starts to rebound.
In business, commoditization arises from business process automation in an effort to reduce the steps required to do the same tasks. Less steps means less labor, less labor means less resources or people to do the same job. Technology accelerates this theory as described in “