Small Business Big on Tablets

Small business adoption of tablets has jumped from nine percent in 2010 to 34 percent in 2011, indicating that the iPad is the fastest growing technology among the U.S. small and medium-sized business market, a study by The Business Journals has found.

About 75 percent of small business owners report said they are "very or somewhat familiar" with the device.

Godfrey Phillips, vice president of research at The Business Journals, says the adoption is fueled by smaller business executives and managers needing access to their business information and data, anytime and anywhere.

But smart phones and cloud computing also are among the trends that also correspond to that need.

"The iPad, as well as smartphones and cloud computing, are all part of this new trend and are experiencing significant growth as a result of that need," he said.

The study found that iPad users in the small business community are tech-savvy and financially successful. They also are highly educated, with 72 percent having a college education. The segment's annual household incomes averaged $176,000. Their companies are also well-established, having existed for an average of 28 years and averaging $9.2 million in annual sales. 

Can Anybody Unseat iPad?

Google is rumored to be preparing to launch a branded tablet of its own. The new "Nexus" tablet reportedly will have a seven-inch form factor, and be released mid-year, with a formal announcement coming potentially as early as May 2012.

The device would sell for as little as $149 in a Wi-Fi-only version. At that price point, Google would seem to be aiming directly at the Kindle Fire, which has been selling in volumes that make the Kindle Fire the first non-iPad device to get traction.

Some will argue the device will debut with a content ecosystem less well developed. So the issue might be "why" users buy the device. People buying the Kindle Fire arguably have been doing so for access to Amazon's rather rich content offerings.

On the other hand, some users will note that the Kindle Fire has been designed as a convenient gateway to Amazon content, but arguably does not work as well as a general-purpose tablet for web content.

The issue, some might say, is whether any such Nexus tablet will take on the iPad or only the Kindle Fire.

Apple iPad penetration in the United States will nearly double from 2011 to 2013, from just over 12 percent of internet users to 22 percent. But other suppliers will whittle Apple's market share from 83 percent in 2011 to 68 percent at the end of 2014, eMarketer predicts.

There will be 54.8 million tablet users in the United States by the end of 2012, eMarketer predicts By the end of 2014, that number will nearly double to 89.5 million.

The adage that "there is no tablet market, only an iPad market" is no longer as true as it was a few years ago. But it still might be fair to say there is an iPad market, and then a tablet market. When one supplier has 70 percent market share, it is analogous to the MP3 player market, which wound up being an iPod market, with some other providers.

In 2011, for example, Apple continued to hold 78 percent of the music player market. That is what "terrifies" other competitors. Apple has more than once showed an ability to dominate a new consumer electronics category.

The mobile phone market is more complicated, as Apple does not compete in the feature phone category. In the smart phone category, Apple has about 30 percent share, globally.

But Apple has managed to achieve an important distinction. By itself, Apple earns 62 percent or so of all smart phone supplier operating profit, according to Strategy Analytics.

Apple in the fourth quarter of 2011 shipped 37 million smart phones worldwide, up 117 percent from 17 million in the second quarter. This represented the strongest sequential quarterly growth among the top-five smart phone brands, according to IHS ISuppli.

The “nightmare” for all the other competitors is that Apple seems quite able to create new markets others have difficulty entering.

Few U.S. Consumers Have Experience with Mobile Commerce, Yet

Only five percent of Americans say that they have scanned their phone for admission to a movie or as an airline ticket, and fewer say they have done so to pay for clothing or electronics (three percent), admission to a concert, live theater or performance (three percent), to pay for a convenience item such as coffee (three percent) or something else (seven percent).

About 40 percent say they have never done so, and  45 percent say they do not own a smart phone with this capability. The Harris Poll survey of 2,056 adults surveyed online between February 6 and 13, 2012 by Harris Interactive, is a problem, right? Wrong.

There is a long history of proponents, suppliers, academics, policy wonks and others who have fretted that U.S. consumers were not taking advantage of some new technology that people in Japan or Western Europe were doing.
That was said about mobile phone ownership, use of text messaging, sometimes of fiber to the home, often about broadband speeds or use of mobile commerce applications. In fact, with the exception of smart phone, tablet and mobile applications, the United States is normally accused of being “behind” other countries in adoption of new technologies.

Those fears have proven to be unnecessary. When consumers have become convinced of the value of such innovations, adoption has been robust and rapid.

In essence, critics have been “blaming the consumer for being dumb,” when in fact consumers were quite rational. They were waiting for a value proposition that made sense, and then adopted rapidly and robustly. If consumers have not adopted some new innovation, it is because the value is not there, or possibly not perceived.

Some of us would argue the former, not the latter, has been the case. It isn’t that people “do not understand,” it is that suppliers haven’t provided the right mix of value and price. Show the value and even the price is not necessarily an issue.

While few may be actively engaging with these functions, there is also a divide on the levels of comfort associated with these behaviors as well. Just under half of Americans (47%) say they are comfortable using a mobile scan as an admission ticket to movies, concerts or live theater performances, while 38% are not comfortable with it-with 25% not at all comfortable; 15% are not sure. About the same number of people are comfortable (41%) and not comfortable (43%) using a mobile scan as an airline, train or other transportation ticket; 15% are again, not sure.

Slightly fewer are comfortable using a mobile app that would allow them to make purchases at a retailer or company as they would with a gift card (39%) while 47% are not comfortable with this and 14% are not sure. The only item where a majority opinion is seen, is with using a mobile app that would store credit card information, allowing people to make purchases at a retailer or company as they would with a credit card; 63% are not comfortable with this with over two in five (45%) not at all comfortable. Only one quarter (24%) of Americans are comfortable with this, and 13% are not sure.

People Say They Object to Personalized Ads. Do They, Really?

A recent Pew Internet & American Life survey asked respondents their views of search engines and other websites collecting information about them and using it to either shape their search results or target advertising to them.

Overall, attitudes toward these practices are mixed, but the majority of Internet and search users express disapproval.

The study of 2,253 adults found that 73 per cent of search-engine users didn't want their search results to be tailored to them based on past searches, even when used only to personalize their future search results.

Over two thirds of respondents didn't want sites to do targeted advertising that uses their Internet history, and just over half said they had noticed targeted advertising that was clearly using such data.

Some 68 percent of respondents have an unfavorable view of the practice, saying they are not okay with targeted advertising because they do not like having their online behavior tracked and analyzed.

Some 28 percent said they are okay with targeted advertising because it means they see advertisements and get information about things they are really interested in.

That should come as no surprise. In the abstract, people also say they “hate” advertising. Only in context can actual user behavior be assessed. For example, though people dislike advertising, they are more than willing to accept it in return for something of value.

One suspects the same is true of attitudes about some specific cases of privacy versus personalization. In other words, a user with high privacy choices will not get personalized offers or relevant advertising. That isn’t to say users should be unconcerned about privacy breaches.

But the issue is that relevance, targeting and offers that are highly relevant to each particular person cannot be delivered without setting a lower bar for “privacy” settings. It’s always a trade off. So the issue is whether most users are willing to make trade offs of some privacy to get relevant, personalized offers and messages.

One suspects actual behavior would be different, when users understand they get something of value for sharing some information that might be objectionable in the abstract.

“I actually don’t think people are that concerned about security,” says John Basso, Amadeus Consulting CTO. “They want you to protect them.”

What Cloud Computing Might Mean for Service Providers

The clear direction of computing architecture over the past few decades has been in the direction of networked computing using public network facilities, with obvious ramifications for service providers in terms of broadband access and transport revenues.

With no exceptions, the next big development--cloud based computing--should push users even more firmly in the direction of computing using public networks. In fact, argues Gartner, by 2014, the personal cloud will replace the personal computer at the center of users' digital lives.

The other big trend is the increasing number of devices used by any single consumer to access and use computing resources.

"Major trends in client computing have shifted the market away from a focus on personal computers to a broader device perspective that includes smartphones, tablets and other consumer devices," says Steve Kleynhans, Gartner VP. "Emerging cloud services will become the glue that connects the web of devices that users choose to access during the different aspects of their daily life."

To be sure, there also are ramifications for enterprise users as well as consumers. And that explains the huge interest in cloud computing, on the part of service and application providers.

Still, most of the revenue upside appears likely to accrue to hardware and software suppliers, according to a Morgan Stanley analysis. In the telecom space, the analysts expect key winners to include Rackspace, Equinix and competitive local exchange carriers and metro bandwidth suppliers.

Also, pubic cloud computing is likely to reduce traditional telco enterprise service revenues. Morgan Stanley further suggests that among IT decision makers, the large telcos remain behind Amazon and others in terms of “cloud mindshare.”

How much overlap there is between hosting and cloud computing services is an important issue for service providers. At one level, hosting is about server real estate and amenities. But cloud computing is about some other things, namely rental of computing cycles and storage, rental of operating systems and platforms, and rental of actual business apps.

Though service providers have embraced the hosting business and content delivery networks as “valued added parts of the transport and business,” it remains unclear how far they might ultimately go in the core cloud computing business.

The increasing number of devices used by any single consumer to access and use cloud computing resources means more access revenue, to be sure.

Gartner predicts that, by 2014, the personal cloud will replace the personal computer at the center of users' digital lives. That implies heavy and growing need for broadband access.

What also is clear is that service providers now see content delivery networks and cloud computing as new business opportunities, with ramifications for enterprise users as well as consumers. And that explains the huge interest in cloud computing, on the part of service and application providers.

Still, most of the revenue upside appears likely to accrue to hardware and software suppliers, according to a Morgan Stanley analysis, even as enterprises start to shift workloads to cloud approaches.

According to the Morgan Stanley survey, 79 percent of information technology workloads are running at on-premise data centers today, but over the next few  years, respondents expect that only 64 percent of workloads will run at in-house data centers.

What’s more, 51% of respondents are running their entire infrastructure on premises today, but in three years some 70 percent of companies will have moved at least some workloads to managed hosting or public cloud environments, including infrastructure as a service, (IaaS), platform as a service, (Paas) or software as a service (SaaS).

That does not mean each of those ways of “doing cloud computing” represents the same amount of potential revenue for suppliers of the services. In the relatively near term, software as a service probably will represent most of the actual revenue for suppliers of cloud computing apps and services.

In fact, one might ask whether, on a global basis, cloud computing will be a significant revenue driver for anything but software as a service. According to Forrester Research, for example, by 2020 SaaS might represent $133 billion in annual revenue, while the other forms of cloud computing will register only in single-digit billions or low double digits.

 
In a similar way, some will argue that hosting and CDN services are more of a  “value add” for connectivity services, rather than big new revenue drivers for service providers, in their own right.

The issue is which cloud computing suppliers or even data centers will benefit, particularly since cloud computing services today are more logically provided by Amazon and other suppliers, not “data center” suppliers.

On the other hand, AT&T hopes to capitalize on its position as a “one-stop shop” for IT and connectivity needs. The company has said that it is already number two in hosting globally, with more than 2.5 million square feet of data center space (38 data centers, with 15 outside the US, primarily in Europe and Asia).

Verizon’s  purchase of Terremark likewise is expected to boost Verizon’s connectivity sales, not simply “hosting” revenue, especially with small and mid-sized businesses. Verizon operates 220 data centers in 23 countries, as well.

Metro fiber providers and independent hosting firms also will benefit, it is reasonable to conclude. What isn’t so clear at the moment is how much share telcos might gain in the IaaS, PaaS and SaaS business segments, which are less “real estate” plays and more “computing services” offers.

Cloud computing gets lots of attention these days in the service provider business. But it might be helpful to keep in mind that the actual amount of new revenue data center hosting or cloud computing actually will generate is likely to be modest, from a service provider perspective.

The more important angle is the “value add” for the other core connectivity solutions. Essentially, data center hosting services and content delivery networks "make the bits more valuable." And value is the antidote to commodity pricing.

Which Industry Isn't Commonly Mentioned as Potentially Leading Mobile Payments?

Mobile service providers, retailers, app providers, banks, mobile device manufacturers and payment clearing networks are among the industries always mentioned as having key interests in mobile payments. 


But the mobile "payments" business has broadened to include a distinct "mobile wallet" segment, a point of sale segment. Of those segments, the wallet segment now has taken a sharp turn towards marketing, advertising and loyalty as the revenue driver. 


In that regard, the one possible new segment that hasn't asserted influence, so far, is the consumer packaged goods industry, which provides the source of funds for much of the advertising, marketing and offers business.


Google Wallet’s Founding Engineer, Product Lead Already at Work on Next Startup, Tappmo | TechCrunch: 

Salesforce Identifies Key Software Eras

Most observers of the computing business are familiar with the "eras" of computing architecture, including mainframe, mini, PC and client-server periods. There is universal agreement we are heading for the next era, though there is not agreement on what to call it. Salesforce argues there are "lead application" eras as well.


In recent years, we arguably have seen the dominance of web apps, and now we are seeing mobile apps at the fore. The next app cycle will be built on social apps, Salesforce believes.