Who wins, and who loses, as mobile apps and services, especially cloud-based apps and services, gain more traction? The “obvious” answer is that device and app providers are “winning,” while service providers “lose.” Though obviously true in the case of over-the-top voice, messaging, videoconferencing and entertainment video realms, the larger reality is more complicated.
In many cases substantial and real competition now is occurring between firms in different ecosystems, not only within single ecosystems. And, as has been the case for a couple of decades, contestants have to balance effort between protecting existing businesses and growing new lines of business.
The difference now is that many of the new revenue streams and businesses actually cross ecosystems and redefine them.
For example, mobile payment systems offered by Square, Intuit and PayPal arguably represent incremental revenue within the credit card and debit card transaction business, rather than primarily a shift of transaction volume within the business. The reason is that such services are used primarily by businesses that would not have used merchant point of sale systems in the past.
Likewise, to some extent, services that turn smart phones and tablets into merchant point of sale systems will compete with supplier of traditional merchant terminals, as well.
Enterprise cloud services might compete with packaged software suppliers, data centers or server manufacturers, for example. That would mean some amount of competition between segments of one industry.
Small business cloud services might reduce the amount of revenue earned by value-added resellers or system integrators, for example. That also is a form of intra-ecosystem competition.
Consumer cloud services, especially those related to storage, will displace some of the need for local storage, and could reduce demand for external hard drive storage and some amount of PC sales. That might be more an example of competition between ecosystems
Cloud storage might reduce need for PCs and storage devices, for example, reducing some amount of device spending and shifting that spending into software and services. So some device manufacturers might lose, while others might gain (PCs, external storage lose; mobile devices win).
By the end of 2013, consumer cloud services for accessing content will be integrated into 90 percent of all connected consumer devices, according to Gartner.
The other dynamic is that, in the case of brand-new services, such as cloud storage, there could also be winners within and between ecosystems. App providers could win, as well as hosting facilities.
Traditional entertainment video suppliers such as cable companies hope to win, even as some amount of entertainment video shifts to cloud mechanisms, even as rivals think cloud delivery will eventually displace traditional distribution mechanisms.
Likewise, cloud services could help device manufacturers as much as app providers. Certain handsets and environments, such as iOS iTunes and Apple tablets and phones, or Google Drive and Android-based devices, provide early examples. That might be an example of value and revenue shifts within the mobile ecosystem.
In other cases, such as many parts of the mobile commerce business, competition might entail substantial amounts of competition between ecosystems. Services offered by the likes of Square, Intuit and PayPal that turn a smart phone into a merchant point of service terminal represent competition between those firms and other existing payment systems, merchant POS terminal providers and emerging application provider or mobile communications service provider payment systems.
“Inside the spending envelope, market dynamics will collapse some markets while creating others that expand the captured revenue,” says Gartner managing vice president Andrew Johnson.
Providers of consumer devices, services and content must anticipate the risk of sweeping changes to their business models,” said Johnson. “The personal cloud will force technology providers not only to rethink how they approach markets, but also, more importantly, how they define markets.”
Emerging and mature markets are no longer useful form of market segmentation, Johnson argues.
Monday, May 7, 2012
Cloud Winners and Losers Will Cross Ecosystems
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Subscribe to:
Post Comments (Atom)
Alphabet Sees Significant AI Revenue Boost in Search and Google Cloud
Google CEO Sundar Pichai said its investment in AI is paying off in two ways: fueling search engagement and spurring cloud computing revenu...
-
We have all repeatedly seen comparisons of equity value of hyperscale app providers compared to the value of connectivity providers, which s...
-
It really is surprising how often a Pareto distribution--the “80/20 rule--appears in business life, or in life, generally. Basically, the...
-
Is there a relationship between screen size and data consumption? One might think the answer clearly is “yes,” based on the difference bet...
No comments:
Post a Comment