Cloud responsible for 'The revenge of the customer' era: IBM

Cloud responsible for 'The revenge of the customer' era: IBM

Summary: Forget all the promises of cloud bringing cost savings — it's developed a monster generation of consumers that want services yesterday, and tailored specifically for them.

TOPICS: Cloud, E-Commerce, IBM

Consumers have caught up with what cloud services are capable of, and instead of it being a cost saving for the business, organisations are expected to spend big or lose customers.

At the IBM SmartCloud Live 2013 event in Sydney on Thursday, IBM consulting services leader Will Duckworth said that many consumers are becoming used to having specialised treatment, and are expecting more from organisations.

"[They want us] to respond quicker, to deliver new products to the market quicker, and treat me as an individual when I interact with the enterprise."

Duckworth said that to improve their agility, organisations should flatten their organisational structures and use more data analytics to inform themselves of decisions faster.

While those are changes that enterprises will have to make, they are no longer cost-cutting ones. IBM last week revealed that the cost savings is not the main driver for cloud adoption, and Duckworth expanded on that.

"I call this the revenge of the consumer. At the first wave of the internet, the enterprise focused on 'How can we save money? I can take my cost to serve from $1.25 to 1.25 cents.' They didn't think about how to engage the consumer."

He said that consumers want to be engaged as individuals rather than being mass marketed to.

"They expect ongoing beneficial relationships. They understand that it's not transactional, and they don't want to be transactional," he said.

"They want the seamless experience across channels. They want to experience your brand, not have a fractured experience across mobile and commerce."

Part of accommodating for the new behaviours of customers also means that those back-end legacy systems that haven't been moved to cloud services need to be examined sooner rather than later.

Duckworth used the example of a retail store, where if there is an issue in the company's supply chain or warehouse management system that prevents it from responding to periods of high demand, the business stands to make a loss.

"I can sell it, but I can't ship it. I don't even know if it's in stock. Having a back end that can respond in the cloud, that can scale to meet demand, that can change quickly is paramount."

"We've got to enable all the legacy systems that you've spent years developing and managing. How do we get them to be more responsive, agile, and automated to respond to this, so we're not just creating demand for consumers that you can't fulfil?"

Topics: Cloud, E-Commerce, IBM

Michael Lee

About Michael Lee

A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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  • Technically naive executives

    are less common than they used to be (except in Dilbert comics), but I remember a story my boss told me during a break back in the 1970's. A few years earlier, he and HIS boss at the time, whose company had a small mainframe computer for their accounts, were at a trade show, and saw a demonstration of what was then the latest thing, a Teletype printer dialing in to a time sharing service and doing some BASIC computing (actually in BASIC). The boss turned to the story teller and said "We ought to replace the computer with that little machine." He had to take it slowly and explain to his boss that there was a BIG computer at the other end of the phone line actually doing the work! And that their business had to read and write punch cards and print large reports as well, which 110 bps (10 cps) would not begin to handle.

    The "cloud" is today's updated version of the time sharing service of the 1970's. You are responsible, in the end, for the safety and privacy of your personal data and that of your business, or your employer's business. Keeping the "working" image of your data in the cloud makes it impossible to do business when the cloud is down. Keeping a BACKUP in the cloud is a good idea, provided YOU control the encryption of the data so that the cloud provider has no way to see it, and provided you have at least ONE cloud and ONE locally produced backup (possibly transported offsite) maintained on the same schedule. As for computing that can "only" be done in the cloud, i.e. on someone else's machine, not so good for critical applications, only for non-critical window dressing ones.
    • Cloud for the Enterprise ... resilient, secure and real

      @jallan32 you make some very good points - data custodianship is a significant challenge for any enterprise. Many business do not want their valued customer data residing outside their premises for competitive, security and privacy reasons. In addition many industries have legislation that makes this challenging particularly in Banking and particularly when cloud platforms are not phsyically located in Australia.

      The notion that cloud platforms are not appropriate for production workloads is not correct. Many large enterprise business are using cloud for mission-critical applications. Their solutions are engineered in an appropriate manner, just as you would with non-cloud infrastructure platforms, to meet appropriate non-functional requirements for performance, availability, security, etc, through careful selection of cloud platforms. At the SmartCloud event we heard how NAB are doing exactly that. Commonwealth Bank also use cloud for critical workloads used by millions of customers.

      As with any IT solution, it's all about appropriate strategy, architecture, design, implementation and operations, whether on cloud or on your old System 360.
      Will Duckworth