The Path to 4G: A Walk Through The Cloud25/07/2011 08:56 by Ryan Garner and Rob Barrish
Consumers are now using various connected devices to socialize, communicate and access a plethora of content and services. Smartphones have accelerated this trend and allow consumers to manage more of their personal and work lives without being restricted by location or time. Cloud based services are the next step in liberating consumers’ most loved content and service as the device is removed as a barrier to access. Network infrastructure is central to this shift to the cloud. 4G networks are the catalyst needed and security the hurdle to overcome. However, with learnings from the enterprise sector, security is not only an obstacle but can also serve as a driver for adoption.
The term “cloud” computing is used to describe applications and services hosted and run on servers connected to the internet that end users do not have to maintain or support. A number of big name technology providers are evolving their service offerings to ensure consumers can access software and media content anytime and on any device. Apple recently announced iCloud while Microsoft announced Office 365 to better compete with Google’s increasingly popular cloud based ‘Documents’ service. Data from a recent study by GfK in the US and the UK  shows these developments are very timely. When asked about their next home PC/laptop upgrade, 1 in 2 consumers (53% in the US and 44% in the UK) revealed that computers that are bundled with cloud based services would become instantly attractive propositions.
The PC is only a small part of the growing number of connected devices used by consumers, which is expected to reach 22 billion within the next decade . More than 60% of all internet enabled devices sold worldwide are mobile devices like smartphones, laptops or tablets . With greater access to the internet and more devices being used, content stored locally will become increasingly rare. As a result, there will be a greater need for consumers to move their data to cloud-based services. This is very much in line with what we have found in the enterprise sector for companies, the main benefit for using cloud services is access to their data from everywhere (see our main story).
A device agnostic cloud based ecosystem
A key area for this kind of development is media content and a great example is the industry group, Digital Entertainment Content Ecosystem’s (DECE) Ultraviolet Digital Locker. This collaborative effort across several content providers, hardware manufacturers, and software developers provides more open access to video content. The DECE includes Warner Brothers, Paramount, NBC Universal, and Lionsgate, along with Microsoft, Intel, HP, Samsung, Sony, Panasonic, Netflix and Comcast. The concept is to create a digital locker that stores tokens that are proofs of purchase of DVDs, Blu-ray discs and video downloads. When a consumer buys a video online or at a store, he/she can watch it anywhere else, including on any mobile device or TV set without the hassle of copying his/her personal fi les. This kind of accessibility will only increase in importance as consumers diversify their device ownership across multiple form factors. GfK’s research among US consumers shows the types of content consumers are most interested in storing in the cloud are photos (50%), email (49%), full length movies (49%), TV shows (47%) and work/school documents (45%). Figure one shows that the shift to the cloud is being driven by younger consumers, with older age groups showing significantly less interest in moving their data to the cloud. While cloud based services are being developed to satisfy this kind of consumer demand, there are two key barriers to full adoption; slow or congested mobile networks and security fears.
The path to 4G network infrastructure
For this utopian vision of seamlessly integrated content across a diverse range of networked devices to be fully realized, mobile network infrastructure needs to be upgraded. The impact of the data strain on networks is huge – in the UK and the US 3G utilization rates are fast-approaching threshold levels and threatening user experiences, particularly in areas with a high smartphone density. The migration to 4G networks is expected to provide a new platform designed to cope with the increasing demand for data and cloud based services. Network carriers in the US are well under way to bringing faster 4G services to the market but in the UK and other European countries this transition will be much slower.
Long Term Evolution (LTE) 4G networks that are being rolled out by AT&T and Verizon in the US can deliver download speeds ten times faster than 3G networks. With those kinds of speeds, streaming HD movies on your smartphone would be an uninterrupted jitter-free experience. This will improve user experiences and open up new ways of consuming content while on the move. Without this kind of infrastructure, adoption of cloud based services will be slow and limited to data services that are less intensive.
Security of data within the cloud is the biggest concern across all age groups. Marketers need to address these concerns openly when communicating the benefits of using cloud-based apps and services. There’s also an overall need for greater education about the cloud – only 9% of US internet users completely understand what is meant by the cloud – in order to move consumers from general understanding to active utilization. Consumers want to know that the content they’re storing in the cloud will still be there in the future. As consumers are giving up a level of control, they need some form of guarantee and want to align themselves with companies they trust. GfK’s research shows that 61% of consumers surveyed said that they are concerned about the security of their content if they were to store it in the cloud. However, this fear could easily be turned on its head and become a key USP for cloud computing vendors.
Looking into the more advanced enterprise world, when it comes to cloud based services; “security” offers opportunities for adoption. Business decision makers realise that security systems run by large cloud services vendors are likely to be much more robust than their internally managed systems. Similarly, once consumers understand that the security of their content stored at home can never meet the security standards of the cloud, then security can evolve into a driver of adoption very quickly.
But security is not the only hurdle, cloud based services need to be easy to use as well. GfK’s research showed that 47% of consumers said they would never use the cloud unless they have a simple and easy way to store their content, while 39% say they are concerned about the ability to play content on different devices from the cloud. As a result, greater compatibility and accessibility to content across devices is essential and the user experience will be key to whether consumers persist with this method of storing and accessing their content. A critical area to get right for service providers is the purchase process and ensuring that the same content purchased for one device can be accessed across multiple devices.
The content and software ecosystems have developed rapidly over the last three to four years. They are now one of the biggest drivers of smartphone choice and more recently tablet PC adoption. Consumers, particularly the young digital natives, expect their content and preferred software and services to be ‘always-on’ regardless of location or device. Those brands that can allay consumer fears around security and deliver a fast, reliable and integrated service will win the hearts and wallets of tomorrow’s consumer.
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1) A representative study of adult internet users in in the UK and US. 1000 interviews in both the UK and US were collected in May 2011
2) IMS Research http://goo.gl/G2aGY
3) GfK Retail and Technology, 2010 (Data collected from over 500,000 retailers around the world)
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