Category: cloud computing

The battle for big data

Customer information is now our biggest asset. Are you prepared to fight for it?

Information has always been a key part of doing business – having an intimate knowledge of customers and suppliers is one of the traits of a successful entrepreneur.

As Internet access becomes taken for granted and computer processing power becomes cheaper, the nature of how business data is used is changing.

Earlier this week the iStrategy digital marketing conference was held in Sydney. Much of the talk at the event was about how marketers can use the data being generated by the Web.

At the opening panel representatives from PwC, Google, Expedia and News Limited showed how Internet businesses are gathering data.

Nicholas Chu of Expedia went through the journey of a family to Disney Land, describing how they are integrating search and social tools into the experience of organising a holiday online and catching up with friends.

Lucinda Barlow of Google told the story of how a doting father’s baby photos were saved after he lost his phone, luckily it was all synched in the cloud with Google+ and Picasa services.

All this data is being collated, saved, mined and processed. Companies like Google and Expedia – not to mention Facebook or Apple – see this information as their businesses’ major asset.

One of the other panel members, Stuart Spiteri of News Limited, raised the problem with this when he asked if everybody in the room really understood the consequences of giving their data to intermediaries like Apple or Facebook.

For businesses this is a problem, we’ve become used to the free platforms given to us by Facebook and Google while the easy distribution systems like iTunes mean it’s easier to give Apple a 30% cut than sell products ourselves.

 

In the travel industry it means Expedia or any of the other dozens of travel planning sites like Tripadvisor or, again, Google know more about our customers and the patterns affecting our business than the local hotel, restaurant or tourist attraction does.

That easy booking service suddenly looks expensive when it becomes clear it could be offering different holiday or meal options to your customer whose likes and preferences it now intimately knows.

When the web first came along many of us, myself included, believed it would get rid of the middle man. We were wrong.

The web has affected the businesses of existing middlemen like department stores, newspapers or travel agents but in their place a whole new group including companies like Amazon, Google and Expedia have taken their place.

Whether these middlemen add more value than ones they replaced will be seen, but we can be certain the new breed are much better at collecting and analysing data about our customers.

One of the big battles for the next decade is going to be for customer data. Smaller businesses may find themselves marginalised as the big Internet companies fight to grab information about consumers.

It’s worthwhile treasuring what you know about your clients and considering exactly which of the online gatekeepers you’re sharing these vital assets with.

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Software’s mini revolutions

How the CIA are driving a business revolution

The CIA’s ‘revolutionary’ announcement of their changes to the way they buy software shows just how the relationship between software vendors and businesses is evolving as cloud computing methods become widely adopted.

For businesses it means more flexibility and efficiency while for software companies the new marketplace is requiring them to be more flexible and responsive. Those changes will challenge some vendors.

What’s driving these changes is ‘big data’ – the explosion of data being collected and stored – and the move to cloud based computer systems.

The CIA, like most businesses or home computer users, used to buy software by the license. For small businesses and homes this was by buying a box of disks from the local computer shop while for big organisations there were volume licenses where they bought the right to use tens of thousands of copies of the one program.

Box licensing was never satisfactory, it was difficult for users to know what exactly they bought and customers were always a year or more behind the trend.

Keeping up with Technology

One of the big pluses with cloud based systems is you don’t have to wait a year or two for a new release incorporating the latest technology. It’s rolled out as it becomes available without any work by the user.

With the old box software model you had to wait for the latest release and even then the features you were waiting for could still be missing.

As technology is moving fast online, organisations like the CIA can’t afford to wait.

Pay as you go

Another problem with the old software model was that big and small organisations found they were buying things they didn’t need.

This is particularly true with licensing agreements where a company might have 100,000 licenses when they only needed 15,000.

Pay as you go billing, which is the standard model for cloud computing services, means a lot more flexibility and a much more efficient way of managing software spend.

Closer relationships

In his speech describing the changes, the CIA’s top technology officer Ira Hunt said the agency is prepared to give vendors a “peek under the covers”.

This sort of closer relationship between suppliers and customers is one of the biggest attractions of the cloud computing model. It means both users and suppliers are more closely aligned.

For software vendors that close alignment is where the opportunities lie; the old days of flogging fat, expensive licenses are over and the successful sellers of computer programs will be quicker and nimbler.

The CIA has been accused of formenting many revolutions around the world, this is one most business owners should be happy about them leading.

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Knowledge and power

Can we use the data revolution effectively and well?

In the 16th Century English courtier Sir Francis Bacon declared “Knowledge is Power”, something certainly true during the conspiracy prone reign of Elizabeth I.

Today the data available about ourselves and our communities is exploding along with the computer power to process that information to turn it into knowledge.

We see that knowledge being used in interesting ways – US shopping chain Target recently described how they used data mining to determine, with 87% accuracy, to figure out if a shopper is pregnant.

That 87% is important, it says the algorithm isn’t perfect and bombarding a false positive with baby wear advertising could prove embarrassing, or in some families and societies even fatal.

A good example of data misuse are the two unfortunate Brummies (alright, one’s from Coventry) who were deported from the US for tweeting they were “going to destroy America and dig up Marilyn Monroe”

For the US immigration and homeland security agents, they ready the jokey tweets by the Birmingham bar manager through their own filter and came to the wrong conclusion, although it’s likely their performance indicators rewarded them for doing this.
This is the Achilles heel in big data – used selectively, information can be used to confirm our own prejudices, ideologies and biases.
In 2003 we saw this in the run up to the US invasion of Iraq with cherry picking of information used to build the false case that the ruling regime had weapons of mass destruction that could attack Europe in 45 minutes.
For businesses, we can be sure data showing the CEO is wrong or the big advisory firm has made the wrong recommendations will be overlooked in most cases.

Despite the Pollyanna view of a world of transparency and openness driven by social media and online publishing tools, the information is asymmetric; governments and big business know more about individuals or those without power than the other way round.

In a world where politicians, business people and journalists trade on their insider knowledge rather than competing in the open, free market we have to understand that filtering this data is essential to retaining  powers and privileges.

Usually when the data threatens the existing power structures it is repressed in the same way a dissenting taxpayer, citizen, employee or shareholder is discredited and isolated.

At present there’s lots of data threatening existing commercial duopolies, political parties and cosy ways of doing business.

The fact many of those in power don’t want to see what their own systems are telling them is where the real opportunities lie.

Entrepreneurs, community groups and activists have access to much of this data being ignored by incumbents, it will be interesting to see how it’s used.

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The Internet Kool-Aide Machine

Don’t buy the hype when you read about the hot new product

Every few months, the web lights up with hype about the latest technology or website. For a few weeks, every tech conversation mentions this hot new product.

Almost always this hype is driven by the company in question duchessing a few key “opinion leaders” in the tech, social media or other circles. These folk start writing up this product and, if they are lucky, the stories get picked up by the broader media and the product becomes “hot.”

The aim is to find the greater fools, for the investors and founders of these business they want to cash out by selling the operation to a bigger entity.

When you read the hype about the latest user generated, online sharing social media service that’s growing at a remarkable rate be aware you’re actually seeing a pitch to a big company being framed along the lines that “you can’t afford to miss out.”

By all means sign up to the service to have a look but don’t buy the hype and remember you’re not the customer – the gullible big business manager looking for the next big thing is.

Image courtesy of Blary54 through sxh.hu

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The death of sport

Sports groups have always felt threatened by new technology.

In the 1960s, sports administrators refused TV replays of games because it would affect their revenue.

Sports broadcasting rights were invented.

In the 1970s, sports administrators resisted live TV coverage of games because it would affect their revenue.

Sports broadcasting rights became lucrative.

In the 1980s, sports administrators claimed TV viewers using video recorders would affect their revenue.

Sports broadcasting rights became more lucrative.

In the 1990s, sports administrators worried cable and satellite TV would affect their revenue.

Sports broadcasting rights soared.

In the 2000s, sports administrators warned the Internet would affect their revenue.

Sports broadcasting rights soared further.

In 2012, sports administrators shout that cloud computing services will affect their revenue…….

Photo courtesy of mzacha on SXC.hu

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Confidence in the cloud

Cloud computing services need open data to succeed, vendor lock in will stunt the growth of online markets.

Will the cloud ‘hit the wall’ without good integration? asks Ross Mason in GigaOm – that question is a good one.

In many ways we’re no better than we were twenty years ago with some business – particularly big corporations like banks or telcos – plugging the same information into four or five different databases or software packages with all the subsequent mistakes, lost data and double handling.

The old business model for software companies was to lock customers into a proprietary format and and make it as difficult as possible to move the information to a competitor. Those days are now over.

Business – and increasingly consumers – expect their data to open, accessible and easily moved between different programs, if somebody wants to connect their customer database to their accounting package, or project management software to their word processor they don’t see why they shouldn’t be able to.

Confidence is also the greatest key to success in cloud computing; customers need to know that if a service fails or they decide to take their business elsewhere then their data will be able to move with them. The prospect of losing years of customer records or accounting records is untenable.

A few years back the early cloud based accounting programs tried to tie people onto their platforms by making data almost impossible to retrieve, those businesses failed badly.

One of the promises of business technology is that it will increase productivity and reduce errors; sharing one set of data across the organisation goes a long way towards delivering on that promise.

Today software has to compete on features, not vendor lock-in. Trying to trap customers into using your products is an old business model that no longer works.

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Megaupload, cloud computing and trust

Has Megaupload damage cloud computing’s reputation.

The closing down of file sharing site Megaupload has raised the question of trust in the cloud; “It has made cloud services look that much less legitimate” one daily paper quotes futurist Mark Pesce as saying.

For those of us advocating cloud services and advising businesses on using them, this trust issue isn’t anything new. All of us have to be careful about who we trust with our data and Kim Dotcom, the founder of Megaupload, doesn’t come to mind as someone who would stand a great deal of due diligence.

Like investments – another area where trust is essential – we have to spread our risk around. Saving copies of data to your own computer and making sure the information you save on the cloud is in a form easily read by different systems is important, as is not trusting any one service for critical services.

The taking down of Megaupload also raises other questions – as privacy advocate Lauren Weinstein points out;

“But the Megaupload case is more akin to the government seizing every safe deposit box in a bank because the bank owners (and possibly some percentage of the safe deposit box users) were simply accused — not yet convicted — of engaging in a crime.

What of the little old lady with her life savings in her box, or the person who needs to access important documents, all legitimate, all honest, no crimes of any sort involved.

They are — to use the vernacular — screwed.”

It’s this over-reaction by government agencies which is the real concern and the co-operation of large corporations in shutting down services – as we saw with the shutting down of Wikileaks – probably does more to damage trust in all online services, not just cloud computing.

Cloud services are no less trustworthy than our computer systems, all of which can breakdown, catch viruses or be compromised by staff making mistakes. We have to understand that all technologies carry some degree of risk.

For businesses and home users, we need to spread the risks around – don’t just trust one service or technology to deliver your products or services and have a fall back plan if things go wrong.

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