By now you have probably read or heard about the benefits of using business applications in the cloud. Factors such as cost savings, agility, flexibility and disaster recovery are usually top of mind when considering using cloud-based communications applications.
Despite the cloud’s popularity, there is still confusion as to how the cloud is different from previous information technology services. A common question is, “What’s the difference between the cloud, an application service provider (ASP) and software as a service (SaaS)?”
The answer in one simple word is: nothing. The cloud is a fairly recent term that encompasses the old ASP or SaaS business models. Many cloud applications, such as e-mail and www.Salesforce.com, have been around for over a decade. So the real question is, “Why has the cloud emerged so quickly and strongly as the latest IT buzzword?”
Smart Business spoke with Mark Swanson, CEO of cloud communications provider, Telovations Inc., headquartered in Tampa, Fla., about why the term “cloud” has become so popular.
What is your take on the rise of the term ‘cloud’?
I actually had a discussion with a colleague at a tradeshow recently about this very topic. We discussed the factors that are fundamentally driving the adoption of cloud technologies today. The one thing that absolutely stood out was the emergence of ‘ubiquitous broadband’ or the ability to access online applications and data anytime, anywhere. Ubiquitous broadband frees you from worrying about being stranded without access to your data and applications. As connectivity is everywhere, you can now retrieve data and use applications on all the various devices you have a smartphone, notebook computer, iPad, whatever.
Can you define the term ‘ubiquitous broadband’?
Ubiquitous broadband refers to the ability for anytime/anywhere access to data and applications across various types of platforms including the simultaneous access of fixed and mobile services. It is very useful in business. The Gartner Group maintains there is a high correlation between broadband penetration and GDP per capita. It is an interesting concept that estimates the economic impact of ubiquitous broadband. It demonstrates a huge payoff for the United States in general. Would it not make sense for it to have a big payoff for businesses that adopt it as well?
Isn’t this just providing more access to businesses and consumers?
It is, but the ability to access anywhere has led to a tipping point in adoption that is more than an evolutionary change it is truly revolutionary. It has fundamentally changed the way we interact with each other personally (i.e. replacing face-to-face interaction with online interaction), as well as how we operate as businesses. No longer are we tethered to an office or to our laptop computers. Ubiquitous broadband has led to ubiquitous data and applications, available anytime and anywhere. It has redefined the way we work. Just think about it for many people, employment used to mean driving to an office. Now it means connecting to a network where you get things done.
How fast is the change?
It is hard to imagine how much faster technology is being adopted now than just a few years ago. As an example, it took more than 20 years for the personal computer to reach 50 percent penetration of U.S. households (1982-2001), but less than 10 years for the Internet (1991-2001) to reach that level. Broadband Internet adoption has grown even faster growing from under 5 percent adoption in 2000 to more than 50 percent in 2007.
What are the ramifications of this change?
The fact that broadband Internet has been adopted so quickly has opened a window of opportunity that allows technologies that leverage ubiquitous broadband to also spread very quickly. In just the last decade, Wikipedia destroyed the entire encyclopedia industry, Facebook created $33 billion in value in less than six years, NetFlix buried industry giant Blockbuster, and the list goes on and on. Each of these companies leveraged broadband penetration to deliver applications through the cloud to create incredible value in a very short amount of time. Companies that can’t find ways to leverage this trend are being relegated to the dustbin of business history.
It almost seems that if you are not in the cloud, you might be late to the game. What emerging opportunities do you see today?
There’s still lots of opportunity. Buying SaaS versus owning it is a huge shift and is a transition that has just begun. Most of the big areas have players but there are lots of opportunities in other areas.
One big area of opportunity is leveraging wireless broadband. Look at the iPad, for example. Bernstein Research reported on Oct. 4, 2010, that the iPad was the fastest growing technology in history. I believe one of the biggest reasons is that it was the first successful tablet device to include both WiFi wireless and 3G wireless access.
What this has meant for me is that I no longer have to take my notebook computer on business trips. I can always tap into e-mail, have access to all my company’s information and retrieve files using my DropBox program, regardless of where I am using either the 3G or WiFi.
The rollout of 4G wireless this year means much higher bandwidth speeds, which will open the door for a plethora of new devices and applications that will enable business users to leverage this new technology. I am thinking about how we can use this new technology to help our customers. You should too!
Mark Swanson is the CEO of Telovations Inc. Reach him at email@example.com.