Consumer Cloud Infiltrating Business, Creating Opportunties?September 14, 2011
Cloud computing services have captured consumers. From commercials during Monday Night Football ordering viewers "to the cloud" to tech giants like Apple pulling the curtain off of its iCloud service, which is sure to be a massive consumer hit, consumers can’t escape the cloud.
And as the consumerization of IT continues to unfold, these consumer-focused cloud services will likely make their way into the business world — like it or not. Much like Apple (NSDQ:AAPL)’s iPhone and iPad infiltrate businesses, and the continuing onslaught of smartphones and tablets breaking through enterprise walls, cloud apps aren’t too far behind…
In fact, a recent survey by cloud sync solutions player Funambol found that 72 percent of users will leverage personal, or consumer, cloud services for both business and personal use, while only 26 percent said they would use cloud services only for their personal data.
"I think that the consumer invasion from a product standpoint started this," said Aric Bandy, CEO of Agosto, a Minneapolis-based cloud solution provider, citing the iPhone and iPad as the main offenders that acted as a catalyst for consumer cloud services to reach businesses. "Cloud solutions are riding in on their coattails."
This bleeding over of consumer cloud tools into business stems from many users and employees rebelling against their IT departments and getting the services and products they require on their own instead of waiting for the IT department to provide.
And for solution providers, this rebellious spirit could create a new set of opportunities around cloud offerings that were once aimed squarely at consumers.
Bandy pointed to a cloud backup utility called CrashPlan, which got its start as a strictly consumer play and made headway into the enterprise by providing a necessary service that people were using on their own and installing on their work machines. From there, it exploded, and CrashPlan launched a full-fledged enterprise edition to give businesses and solution providers the ability to control it and manage it in-house.
Salesforce.com is also credited with creating this sort of model, but in business, by going around IT departments and selling directly to sales teams to get its portfolio of SaaS and cloud offerings into the enterprise.
John Shaw, CEO of Nimbo, a New York-based cloud solution provider, said he’s not quite sold on consumer cloud services becoming viable business tools and solution providers benefiting from them. Instead, Shaw said an amalgamation of consumer and business cloud services could be the future of the cloud.
"The things that we see are hybrids of the consumer products," he said, adding that Yammer, a business-focused social networking play, takes Facebook-like elements but for business and gives enterprises control. Yammer, and Salesforce Chatter, each takes a cloud social networking model popularized by Facebook, but take the risk and lack of control of Facebook out of the equation. It’s a win-win, in that businesses get an enterprise-class tool with the familiarity of something they use at home.
Bandy took that idea one step further and said that many consumer cloud providers will soon be forced to create both a consumer and enterprise version of their product to satiate the appetite of businesses.
"We can no longer separate these products," he said. "There’s going to be a commercial version and a consumer version. They’ll revamp product sets to fit in business."
Another example of a consumer product turned enterprise offering is Google, which has made a massive business splash with Google Apps in recent years, after its free version of Apps and Google (NSDQ:GOOG) Docs won over consumers.
Shaw said he also sees enterprise application stores as an up-and-coming area where the consumer model will influence business. Where Apple (NSDQ:AAPL) and other players have made major waves with their app stores, enterprise-focused app stores will help cloud apps better cross the chasm into business.
Bandy said this ongoing consumer cloud infiltration will create new opportunities for solution providers from a strategic planning and consulting aspect as VARs and providers help customers understand what cloud solutions to use and what to plan for.
Still, not every solution provider sees opportunities with consumer-focused cloud products, especially as the cloud price war creates a race to the lowest cost. John Stewart, president and CEO of Saber Solutions, a Charlotte, N.C.-based solution provider, said that low-priced, low-margin consumer cloud services could circumvent the channel.
"It’s all about developing and marketing your own IP to wrap around those offerings. It’s not enough to be just a VAR anymore," Stewart said. "The cloud products are too low priced, with bad margins. To make money, and build a business, you need something that belongs to you. That distinguishes you. That makes you valuable."
Centennial, Colo.-based AccuCode, a Google (NSDQ:GOOG) partner and long-time mobility cloud provider, is doing just that. It’s adding its own spin to cloud services and creating new markets. And in some instances, AccuCode is seeing products that were once consumer-focused making their way into the enterprise.
"We’re betting big on Google and on Android," said AccuCode CEO Kevin Price, noting that via its AO Communications cloud-based unified communications offering AccuCode plans to break down the enterprise walls with Android, which has essentially been a consumer-only play since its launch.
"Today, Android hasn’t been packaged for the enterprise," he said, mainly because Android is fragmented by various devices and OS versions, where Apple (NSDQ:AAPL) is streamlined a single OS and limited device options. But AccuCode is looking to package Android for the enterprise market. And that’s something clients want.
"Absolutely we see a demand, and we’ve been seeing it for a long time," Price said.
The question of consumer products and services making their way into the enterprise comes down mostly to security and reliability. Price said if a solution provider can wrap reliable and secure services around these offerings, it should be accepted into the enterprise with open arms. Android, once AccuCode secures and supports it, will be a shining example of that.
"Android’s openness is means it’s going to win in the enterprise," he said.
Elsewhere, Price said, he sees cloud storage making the jump from consumer to business. And more enterprise-focused vendors will add consumer-styled cloud storage offerings as a free feature in their products, he predicted.
"You’re going to continue to see that take off," he said. "Cloud-based storage will be a free feature."
Price said SMBs have already started to leverage consumer cloud storage offerings for backup and archiving, replacing older systems.
"The storage demand is going to increase as it becomes an extension of larger cloud systems," Price said.
That’s where tools like Google Apps come in, which add cloud storage to the per-user cost of the cloud applications, while maintaining centralized control.
As for Apple’s iCloud, which many have said will have a business use, Price said it likely won’t make the same waves that other consumer-focused cloud products have in the enterprise.
"I don’t believe long term that Apple will be in businesses," he said. "They don’t really put any effort into making their products business ready or business friendly."