Non-IT companies to enter cloud service fray

The cloud computing arena will get increasingly crowded as Gartner analyst predicts 20 percent of non-IT Global 500 will externalize their business processes and monetize them as software-as-a-service by 2015.

SINGAPORE--As companies enhance their business processes and, over time, become specialists in specific niches, they will repackage these processes into software-as-a-service (SaaS) offerings to their competitors and become cloud service providers, an analyst said.

Brian Prentice, research vice president at Gartner, said that regardless of the verticals they are in, non-IT Global 500 companies that have an "interesting" business process would be able to monetize it by making available the service through cloud computing, specifically through SaaS.

By 2015, about 20 percent of these non-IT companies will enter the cloud fray as service providers, he forecasted during Gartner's Predict 2011 conference held here on Tuesday. He cited automaker Volvo, which had earlier made available its service maintenance process to rival BMW, as an example.

"Previously, I would ask these companies that want to monetize their business processes if they are ready to become a software company, and many would say 'no'. Today, with cloud computing, these companies can sell interesting business processes via the cloud without having to dilute their core competencies," the analyst noted.

Fellow Gartner vice president, Andrew Rosell-Jones, added that this development is part of the shift from a cloud environment for "mass consumption" and plagued with security challenges, to a more "hygienic, capabilities-based" cloud space.

During his presentation, Rosell-Jones likened the cloud computing arena now to the car industry of Detroit in the 1970s. Automobiles then were churned out in mass volumes, similar to today's SaaS- or infrastructure-as-a-service-based offerings.

However, as the security issues and challenges are gradually mitigated, there will be more non-conventional service providers entering the space to offer "capabilities on-demand", complementing products introduced by pure-play cloud service vendors, he said.

Web sales from social engagements
Prentice also observed that social media and mobile computing trends will play an increasing role in spurring companies' Web sales. He predicted that about 50 percent of companies' Internet-based income will be generated by their social presence and mobile apps by 2015.

Enterprises, however, have not figured out how to make use of social media to drive sales, he added. "The social space is a tricky one where there will be more failures than successes," the analyst pointed out.

Prentice added the "advent of social bots" is emerging as an outlet to drive consumer engagement and provide value-add in business-to-consumer (B2C) relationships.

Social bots, he explained, are simply automated ways of "crawling" information on the Web and social networking sites such as Twitter for commonalities among Internet users. By making sense of these patterns, companies can better understand what their target customer base's needs and wants are.

Travel guide company Lonely Planet, for instance, has taken up the role of a "trusted arbiter" of good travel content for its followers, Prentice said. The company will source for informative travel information, articles and tips and "push" the content to its followers. The next step would be to automate the process, which is where social bots come into the picture, he explained.

As a result of tools such as social bots, the analyst predicted that about 10 percent of one's online "friends" will be non-human by 2015.