Technology Paradigm Shifts How We Work

by Eric Tsai

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.

The Evolution of Media Content Distribution: Circulation 1.0 to 2.0

by Eric Tsai

I often get asked on the benefits of Social Media: “How should we leverage social media for advertising and marketing?” or “What do we need to consider when incorporating social media into our existing strategy?”

There are still a lot of questions surrounding social media.

The simple way to get a grasp on it is to first understand how information flows through social media.

Visualizing The Circulation Evolution

I like to visualize information so I’ve created the following graphics to describe how content travels through the traditional media channels.

circulation1_0

As you can see in the traditional model, content gets created (by few sources) then aggregated into the circulation 1.0 channel of print, radio, television, and the web.

These “read-only” materials get pushed out on a one-to-many process requiring users to retrieve them.

Take newspaper as an example: it all starts with the editor creating the content, then it goes through a review process before it gets printed on paper, and finally delivers to you so you can start reading the content.

This is a top-down approach for content distribution with maximum control

Now let’s looks at how social media elevates the content circulation in the 2.0 model.

circulation2_0

In this model, everyone is a content producer enabling user-generated content to scale efficiently.

When you have millions of people contributing content, it creates a many-to-many race to publish and distribute information.

As a result, the content now comes to you, pulling you to consume.

In addition, the nature of web 2.0 allows content to be syndicated and shared almost instantaneously.

Finally let’s incorporate circulation 2.0 as part of the circulation 1.0 and you get the “hybrid” model:

circulation1_5

I call this circulation 1.5 because it retains the traditional media’s channel of distribution while adding web 2.0 into the mix.

The concept is to leverage the best of both worlds from 1.0 and 2.0 to gain maximum impact for brand exposure and brand awareness.

Beyond Circulation 2.0

Most brands are still on circulation 1.0 networks and many are on the path to circulation 2.0 by adding social media to their traditional media channels.

The great thing about circulation 2.0 is that everyone is pulling your content creating a natural word-of-mouth marketing that’s pervasive.

However, as the speed of these dynamic conversation becomes even more instantaneous, in the case of Twitter, the content producer have less control.

Content can get interpreted out of context and then passed along down the line just like that telephone game we all played in kindergarten.

This is why many companies are using social media primary as a service function for reputation management and customer support.

That’s exactly what Zappos, PizzaHut, Intuit, and Dell have done by leveraging Twitter for those purposes.

This creates transparency and adds authenticity to the brand which is where social media has taken us to so far. Moving forward brands must rethink the intend of their products and services and manage expectations carefully through positioning and messaging.

After the financial meltdown last year there is a lack of trust for brands and a definitive shift on perceived value.

That’s why there is such an acceleration in social media because people demand to know the truth and in many ways social media allows us to get closer to what really is happening.

When Twitter was first launched in July 2006 (happy 3 year birthday!) it was intended to be a quick update for your groups of friends.

Today it has evolved to a social networking tool to report, react, and discuss anything from news to random thoughts.

It will probably continue to evolve because of the fluidness of the platform has allow users to take the service in completely unexpected directions.

Now that’s good for innovation, they just need to figure out a business model for monetization.

The fact is traditional media still reaches far more audience than social media as I write this post. I’m sure I’ll circle back in the future as things may change in unexpected ways too.

Let me know what you think.

Marketing Success: Strategic or Accidental?

by Eric Tsai

web20sf I just got a reminder email from O’Reilly Conferences to attend Web 2.0 event in San Francisco which I went last year while I was consulting for a web 2.0 product. I remember walking around the show, meeting people, and sitting in on the breakout sessions. The only thing I kept wondering is how are any of these people going to create a buzz for their product?

Here are some notes I took while at the expo:

The morning keynote sessions involves topics such as accessibilities, the web, browser and opening up a platform for developers to further the advancement of web2.0. Then I heard the conversation with Marc Andreessen, co-founder of Netscape Corp, co-author of Mosaic and Ning. He spoke about the internet experience specifically over the usability of browsers.

After that it was an interesting video of Jonathan Zittrain, who raised the question of security issues over the internet to developers on the web and mobile devices. Then Mozilla Firefox’s chairman spoke about one web and accessing the web via mobile should be the same as on PCs etc plus discussed their new browser for the mobile platform that will come with some of the newer smart devices.

Thus far, everyone emphasized on the importance of opening up their platform for further web 2.0 development since the evolution of the “web browser standardization” was the reason why we have this incredible growth post 2005 when the idea of web2.0 was introduced. Personally I believe everyone suddenly realized that’s how Google got so far so fast so good, even MySpace credited their users in building and driving their product (Google’s model – just launch it and let the market tell you what they want).

One things I found interesting is how much traction a company or a product gets when it’s tied to famous or powerful individuals. And that led to another article I’ve read last year about the effectiveness of influentials in marketing. In FastCompany’s Is the Tipping Point Toast?, author Clive Thompson presented an controversial debate on how trends work between theories from Malcolm Gladwell and Duncan Watts.

Long story short, Gladwell believes in Influentials theory – in the “two step” model of marketing, well-connected Influentials amplify a trend by relaying media messages out to the social periphery. Marketers can therefore focus on the few as a way of reaching the many. And Watts believes Accidental Influentials – Watts’s theory says the emergence of a trend depends not on Influentials, but on the susceptibility of the public to the “virus.” Social-network effects are so complex, he says, that trends are basically random.

While I like what Watts outlined in his research, ultimately it’s a combination of both random influence and key opinion leaders setting off some sort of buzz in an attempt to tip a trend into existence. However; will it last is another story since any big firm can hire celebrities as their spokesperson, purchase prime time advertising spot, or plaster posters all over town. Marketing has some unmeasurable randomness that often can not be precisely determined by sales figures or CRM systems. The key metrics to consider are time-to-benefit and the return on investment, when you pay someone like a Marc Andreessen it’s either an expensive shortcut or a cheap fast track with no gurantee in “trend setting” just a higher probability.