I have followed Mobile Cloud Computing from mid-2006 on the OpenGardens blog even before the phrase ‘Mobile Cloud Computing’ was common.
While it depends on how you define/count these subscribers, I agree to the basic proposition that Mobile Cloud computing will be very significant.
This article explores Cloud Computing from an Operator perspective and discusses the synergies and opportunities for Carriers. I will outline an initial view here and elaborate later in subsequent articles if needed.
Mobile Cloud computing has a silver lining for Operators for at least three reasons:
b) Data and
Firstly, a brief definition of Cloud Computing . Cloud computing entails the availability of software, processing power and storage on an ‘as needed’ basis. Cloud computing reduces CAPEX investment. It’s key characteristics include agility, reduced Cost, device independence, reliability (multiple redundant sites), scalability, security and reduced maintenance. Cloud computing applications can be broadly divided into:
Infrastructure-as-a-Service (IaaS) ex Amazon Web Services provides virtual servers with unique IP addresses and blocks of storage on demand;
Platform-as-a-Service (PaaS): Ex Google apps – A set of software and development tools hosted on the provider’s servers.
Software-as-a-Service (SaaS) : Ex web based email – in which the provider allows the customer only to use its applications.
Operator Mobile Cloud initiatives so far
Orange calls Cloud computing as ‘Flexible Computing’ and it allows businesses to outsource their IT infrastructures
Verizon calls it’s cloud computing service as ‘Computing as a Service’ and the service enables users to provision blocks of 50 to 100 servers from weeks to minutes. Pricing is on ‘per server’ basis, which it believes is easier for the end customer to understand
Vodafone has announced a strategic partnership with Decho to launch a range of cloud computing services starting with Vodafone PC Backup. The ‘backup’ offers a simple on-ramp for business and personal customers to Mobile Cloud services.
O2 has launched the O2 Bluebook, among others. T-mobile and BT also have cloud offerings.
The disruptive potential of Mobile Cloud Computing
According to the ABI report:
There are two primary reasons why ABI believes cloud computing will become a disruptive force in the mobile world. The first is simply the number of users the technology has the power to reach: far more than the number of smartphone users alone. The second reason has to do with how applications are distributed today. Currently, mobile applications are tied to a carrier. If you want an iPhone app, for example, you have to first have a relationship with the mobile operator who carries the iPhone. If you want a Blackberry app, the same rule applies. But with mobile clouding computing applications, as long as you have access to the web, you have access to the mobile application.
Let us consider first the ‘feature phone’ argument. It is far fetched to think that existing feature phones could gain the capabilities of Smart phones only from Mobile Cloud Computing. However, the boundaries between Smart phones and feature phones are blurring. So, this may well hold true for forthcoming ‘feature’ phones. Richer clients like Microsoft Azure, HTML5, SIM/SCWS, BONDI stack, One API etc could all help to enable Smart phone like features to feature phones.
The Access argument has two sides to it: Firstly, Access is becoming more lucrative and will be more so with Cloud computing applications.Secondly, the ‘apps’ opportunity is based on ‘Long tail’ applications and is of lower revenue potential for Carriers.
a) Access from a Cloud computing applications perspective: Cloud computing application s will need a separation of access and service to take off. This means that an app on ‘Orange’ can be accessed from ‘Vodafone’. As the ABI report says, if apps become access agnostic, then this trend benefits the customer and the developer. Currently, fragmentation hampers developers and the existence of an Open, cross-operator Mobile Cloud computing application benefits both customers and developers since the addressable market for apps increases. I believe that in the long run, Operators may forego the ‘apps’ opportunity (which is small from a relative standpoint) in favour of Cloud virtual server hosting, Security and Cloud services opportunity.
b) Access from a mobile ISP standpoint: There is however another side to access when compared to fixed line access. In the article Not every cloud has a silver lining, Cory Doctrow says that
Likewise, you can buy a no-name quad-core PC with the aforementioned terabyte disc for £348. This machine will compute all the spreadsheets you ever need to tot up without breaking a sweat.
Going into the hard-drive business or the computer business isn’t cheap by any means – even with a “cloud” of Chinese manufacturers who’ll build to your spec – but it’s vastly cheaper than it is to start an ISP. Running a wire into the cellar of every house in an entire nation is a big job, and that’s why you’re lucky if your local market sports two or three competing ISPs, and why you can buy 30 kinds of hard drive on Amazon. It’s inconceivable to me that network access will ever overtake CPU or hard-drive for cost, reliability and performance.
By extension, since Mobile broadband does not entail running a cable to every home, it has a unique advantage in future to provide access (which in turn benefits cloud computing)
Client for the Cloud, the Web OS and Security
Many of the initial ideas for Cloud computing were based on the proposition of complete platform/ device independence. However, if the Cloud needs a client, then we have some interesting implications. I have discussed this idea before SCWS SIM as the Cloud computing client for the Mobile Network Operator . It also indicates the need of a Web OS, again discussed in a previous blog
Thus, Ray Ozzie’s ‘Software plus services’ vision may be accurate. There are of-course many choices for the ‘client’: Microsoft Azure, HTML5, SIM/SCWS, WebOs(BONDI stack) etc.
But once we accept that the need for a client exists, then the need for end-to-end secure connectivity also arises. And therein lies the silver lining for the Operators – for instance using the client to authenticate services or for using the device in three factor authentication.
Here are some thoughts on the opportunities for Carriers in the Cloud computing space
a) Mobile Broadband: – broadband connectivity access. The fixed line cannot compete with mobile access for the reasons mentioned above
b) Cloud computing applications: will need a separation of access and service to take off. Operators may forego the ‘apps’ opportunity(which is low from a relative standpoint) in favour of the other options.
c) Providing security for an end to end connection will be an important role for the Operator. This includes authentication both for Web services and as a part of three factor authentication
d) Carriers currently have a lot of data about consumers including behavioural data. That data has limited usage currently. However, it can be used once the carriers ‘sign up’ new customers. Ex to reduce churn. Thus, once the carriers have the new virtual server hosted customers, the data acquired by the carrier from various sources can be used to serve these ‘new’ customers. This could be an interesting opportunity
e) Note that the phrase ‘Mobile Cloud Computing’ itself has meaning only from an access standpoint. For instance, the ‘backup’ could work for any server (fixed or mobile).
f) Virtual server hosting good starting point but it is just the beginning. Potentially other services are possible starting with the Cloud backup. However, if we consider the contra argument, web based backups are already possible for example from services like Mozy Pro. However, these services are not ‘value added’ in any way – for instance the Web backup service does not use the data to sell me personalized advertising
g) For device vendors, apps are critical. One could view apps strategy to have a cloud component ex: Apple (MobileMe), Nokia (Ovi), and Palm (webOS). I elaborated this trend in detail in my blog about BADA
h) LTE and ‘metering’ may also have a part to play if all these servers are backing up data
Comments welcome. I will try to elaborate more in subsequent sections.
Image source: educationerp