Verizon: Enterprise cloud use reaches tipping point
New York – The use of cloud-based enterprise storage and production applications, as well as enterprise spending on cloud technology, has increased in the past year to a tipping point. According to the Verizon 2013 State of the Enterprise Cloud Report, between January 2012 and June 2013 the use of cloud-based storage grew 90% and use of cloud-based memory increased 100%, mostly due to the shift of business-critical applications to the cloud.
Other findings of the report include:
- Increased cloud capacity led to a slower growth rate of virtual machines (35%) during the report period.
- Enterprises increased their average cloud spend by 45%.
- Rated in order of importance, the four most critical cloud components are uptime, performance, user interface, and API.
- Sixty percent of cloud applications are web-based and Internet-facing. Another 23% are internal-facing production applications.
Of particular interest to retailers, the report predicts that enabling retail services will be one of three key factors driving future enterprise cloud growth. Verizon research indicates that online retailers are spending more on cloud services to implement Internet-facing, POS, and online purchasing applications. The other two key enterprise cloud growth drivers are increasing worker productivity and leveraging Big Data. Verizon cautions that cloud technology must deliver enterprise-grade security and consistent performance to reach its full potential as a business IT platform.
One more thing to worry about this Christmas
As if competing against Target, Best Buy and Amazon.com isn’t challenging enough, nationwidethe fast-food “strike” which took place Thursday offered a glimpse of the type of headline-grabbing, disruptive activities Walmart can expect from its opponents this holiday season.
Organized labor attempted to orchestrate worker protests at Walmart stores last year on Black Friday and encouraged workers to walk off the job at select locations. The actual number of workers who left their posts was miniscule, but the effort garnered considerable publicity, further disparaged Walmart’s reputation, but was said to have no impact on sales.
On Thursday, in a prelude to what Walmart may expect from the United Food and Commercial Worker (UFCW) come November, the Service Employees International Union (SEIU) took on the entire fast food industry with a series of walk-off-the-job events. The events were carefully communicated to the media to ensure maximum exposure and highlight the rate of pay the typical worker at a McDonald’s or Taco Bell receives. SEIU said the strikes took place in 60 cities, a view Rob Green, executive director of the National Council of Chain Restaurants took exception to.
“A few scattered protests organized by outside labor groups hardly amounts to a nationwide ‘strike’ or movement,” Green said. “The vast majority of fast-food workers across the country are committed to their jobs and realize that the restaurant industry provides an important first step into the world of work as well as long-term career opportunities. Beyond teen-agers and some part-timers, most restaurant workers make more than minimum wage, and can work their way up to management-level and corporate-level positions that provide rewarding career paths.”
Those comments sound remarkably similar to points made by Walmart executives who often rebut criticism of the company’s wages by pointing to the opportunity the jobs offer. At the company’s shareholders’ meeting back in June, Walmart president and CEO Mike Duke characterized the jobs the company offers as a “path forward and a ladder up.”
He was referring to the opportunity that exists in an organization with 2.2 million employees where talent and hard work is said to allow workers to go as far as they want.
Even so, opportunity doesn’t pay the bills, something organized labor is sure to remind shoppers of again this holiday season as it looks to recruit disgruntled employees to stage protests.
Holidays heating up, head in digital direction
Retailers will be promoting early and often during the upcoming holiday season, especially with six fewer days between Thanksgiving and Christmas, and mobile is sure to play an even greater role this year than it did in 2012.
Walmart has already announced the official start of the holiday season begins on Friday, Sept. 13, with a no-fee layaway program on categories such as electronics, toys, jewelry, small appliances and sporting goods. Those who follow the company on Facebook can open a layaway account two days earlier, in a sign of increasing multichannel integration that promises to make this the most digital Christmas ever.
Another indicator to that effect is the accelerating momentum of mobile commerce. Total m-commerce spending is poised to exceed $25 billion this year following a 24% surge in second quarter smartphone and tablet enabled sales that pushed estimated spending to $4.7 billion, according to digital measurement provider comScore. The firm said m-commerce spending in the first half of the year totaled $10.6 billion, representing 10% of total digital commerce during that time. With the expected seasonal surge coming in the fourth quarter, m-commerce spending could surpass $25 billion for the full year, according to comScore’s estimates.
“While mobile devices are already extremely influential in the overall buying process, they are also beginning to drive a meaningful percentage of digital commerce,” said comScore chairman Gian Fulgoni. “One out of every ten consumer e-commerce dollars is now spent using either a smartphone or a tablet, and growth in this segment of the market is outpacing that of traditional e-commerce by a factor of 2x, which itself is growing at rates in the mid-teens. Any channel shift has the potential to be disruptive to established revenue streams, and it would appear that m-commerce spending has reached enough of a critical mass that key stakeholders must begin to address this new market dynamic today or risk losing competitive advantage.”
According to the firm’s data, the product categories with the highest m-commerce penetration rates were apparel and accessories (9.7%), consumer electronics (5.5%) computer hardware (5.4%), consumer packaged goods (4.3%).
ComScore’s data indicates smartphones drove a considerably higher share (6%) of total digital commerce than tablets (3.5%. While smartphone users outnumber tablet users by a factor greater than 2x, the average spending per device owner is actually 20% higher on tablets. This is likely a function of the platform’s higher income demographics and its greater similarity to the desktop experience due to its larger screen size, according to comScore.