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Cloud Expo: Article

2014: Customers Rejoice in the Year of Service Personalization

In 2014, we will see more service providers resolve to add more personalization in enterprise technology

As we enter a new year, it is time to look back over the past year and resolve to improve upon it. In 2014, we will see more service providers resolve to add more personalization in enterprise technology. Below are seven predictions about what will drive this trend toward personalization.

The Internet of Things turns into the Internet of Agents. M2M connections and multi-agent systems will result in an increasing number of highly personalized, value-added branded services. The latest Gartner forecast for the Internet of Things (IoT) predicts that by 2020, there will be $309 billion in incremental revenue opportunity for IoT suppliers, mostly in services. Everything-as-a service (XaaS) will lead us toward more complex services, more bundles and more options. Individual users will use agents whose sole job is to create functional services for individuals, out of everything available in the connected service universe. As we move closer toward XaaS, we will become familiar with the concept of "agents" in the delivery of those everything services via SaaS, PaaS and IaaS. Agents can reside as modules within SaaS service offerings or they can be tools embedded in the service provider infrastructure or operating systems. Agents can exist in cloud-connected devices, or in the management software within the evolving smart device ecosystem. Any service delivery platform (SDP) can contain agents that add functionality to the supported services by collaborating with other agents on other platforms.

Everything-as-a service does not tolerate mediocrity. Services will increasingly be decomposed, repositioned and resold or bundled with other services. Many common products will transition to being sold as a service, resulting in creative combinations of services that have never been thought of previously. Services will become encapsulated within other services and service components extracted from one service will be built into multiple others. In 2014, the gap between products that support the evolution to completely new business models and those that deliver simple efficiency gains will increase, creating a new crop of leaders and leaving many others behind.

Incomplete projects and unfulfilled promises reveal that the emperor has no clothes for many SaaS vendors. It sounded too good be true, and after the last couple of years of hype, enterprises will demand to see results before handing the keys to the kingdom to companies that promise to deliver business transformation. The requirements of Internet merchants and simple commerce do not easily translate to the enterprise, unless you are willing to start walking the path to commoditization. Enterprises will demand to see transformation results for a single line of business, in addition to scalability and performance proof points, before they agree to enterprise-wide deployments.

Cloud-as-we'd-like-it-to-be is not your father's cloud. 2014 will usher in entirely new business models for a uniquely cloud world that goes beyond today's primary use as a cost-reduction tool. We will see the start of the transition from cloud-as-it-is to cloud-as-we'd-like-it-to-be. Not the same old commodity cloud of the past, this cloud makes it possible for service providers to mash up offerings with third-party applications to tap into new markets. In formulating a new strategy for cloud adoption, the question will no longer be, "Should we?" but rather, "How far should we go, and how fast?"

The new cloud world will, when we get there, be dominated by ubiquitous, easily accessible and globally connected computing power available on-demand as shared resources to support computing services for those who want to use them.

Three paradigm shifts will occur in the world of cloud computing:

  • Connectedness instead of insularity
  • On-demand services instead of products
  • Access to shared resources instead of individual ownership

The move to this new cloud means we will be more connected rather than less connected; we will consume more computer-driven services and buy fewer computer hardware and software products; and we will benefit from the economies of scale and improved utilization by sharing more computing resources instead of building out our own. The cloud will bring ubiquitous access to immense software choices for users, at prices held low by the twin drivers of visible competition and a base cost minimized by the effective shared use of infrastructure and platform resources.

Software-defined networks (SDN) and network functions virtualization (NFV) become mainstream. With companies such as Google and Facebook already taking advantage of SDN for their networks, it is not a question of if, but when service providers begin to transition costly, proprietary networks that inhibit new service rollouts and revenue streams. We will see a radical change to commodity hardware populated by different kinds of software. Software will be where the differentiation is, while hardware will earn its living by being inexpensive, reliable and plentiful.

SDN and NFV signal the end of bad vendor behavior. Decades-long mistreatment by vendors will lead to the removal of "strategic vendors" from the preferred vendor list and replacement with new vendors that put the customers' needs first. In 2013, the first steps were taken as service providers realized that promises would remain unfulfilled for re-architected platforms desperately needed to support new services and revenue streams. In 2014 the death wish will begin to be fulfilled for traditional OSS/BSS suppliers and proprietary hardware vendors.

Monetizing the new cloud means survival, but only for the prepared. If you are an individual or a company consuming cloud services, you will, of course, be charged, and you will pay your bills. But if you are a cloud service provider, then life is likely to become more complicated. Simplistic cloud services are easy to copy, and with ever-decreasing barriers to entry, increasingly commoditized. Providers will take advantage of interconnectedness to work with multiple other providers to create new and sometimes unique services consisting of bundles of other services and service components. To do this requires more sophisticated pricing, bundling and partner settlement capabilities to take advantage of the cloud opportunity. For those who are prepared, they might just take on the market leaders to reshape the market as we know it.

What trends do you expect for 2014?

More Stories By Esmeralda Swartz

Esmeralda Swartz is CMO of MetraTech. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda is responsible for go-to-market strategy and execution, product marketing, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. Esmeralda was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of OSS software, now part of Extreme Networks (Nasdaq:EXTR). At Avici Systems (Nasdaq:AVCI), Esmeralda was Vice President of Marketing for the networking pioneer from startup through its successful IPO. Early in her career, she was a Director at IDC, where she led the network consulting practice and worked with startup and leading software and hardware companies, and Wall Street clients on product and market strategies. Esmeralda holds a Bachelor of Science with a concentration in Marketing and International Business from Northeastern University.

You can view her other blogs at www.metratech.com/blog.

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