Reader Forum: 2010: The Year of the Mobile Cloud

According to the Chinese calendar, 2010 is the year of the tiger (apologies to Tiger Woods). Some people in the mobile industry believe that 2010 will be the year of 4G, Android or other smartphones. But in my book, 2010 will be the year of the mobile cloud.
The mobile industry today is changing rapidly: revenue from device sales has plateaued while demand for data services has exploded. The big players in mobile must quickly adapt their business models for the changing times. As we head into 2010, many mobile providers and device manufacturers are planning new cloud services for customers. For prospective cloud service providers, there are many obstacles to overcome: wireless network compatibility, device fragmentation, and implementation costs. Yet, despite these challenges, providing cloud services is a smart move for these companies and may be their best bet for survival in the new mobile arena.
With the growing popularity of smartphones, customers are carrying more data and content on their devices than ever before. They are increasingly expecting the ability to automatically sync this data across all of their devices, desktops and the cloud. Yet, most of today’s clouds are not equipped to handle the billions of mobile devices in use. Provider networks, which were underutilized just a few years ago, are today straining under the load of too much data. Mobile providers are rushing to build 4G networks, which they hope will relieve the congestion of dropped calls and slow data connections plaguing many 3G customers.
However, 4G networks will introduce their own challenges. Although 4G networks promise fatter wireless pipes, they can also be more susceptible to signal distortion and interruptions, such as from glass buildings or elevators. If a user is streaming a video on his phone over a 4G network and loses the signal halfway through, the video may need to start over. Obviously, this is an annoyance to the user, and it contributes to additional load on the network. The answer to this problem is cloud services, which can sync and push data and content to devices. Sync and push will be just as instrumental to mobile data and content, as push has become to email. As 4G becomes mainstream, cloud sync services will become essential.
To provide wireless cloud sync, mobile companies must address the overwhelming number and variety of devices in the market—not just today, but also those that are coming tomorrow. Device fragmentation is a huge problem: with thousands of different models and platforms, developers must choose which to support with their limited resources. In addition to devices, there are countless applications on desktops and the Internet, as well as social networks. Supporting all of these platforms is prohibitively expensive and time-consuming. To overcome this, many are choosing to adopt white-label solutions from mobile cloud sync companies. In particular, open source solutions are a good choice because they support the broadest number of platforms and provide the most flexibility and customizability to quickly support new devices.
For device manufacturers and mobile providers that overcome these challenges and implement mobile cloud services, the potential rewards are great. Consider the address book, which is perhaps the most important element in mobile cloud services. The mobile cloud address book syncs a user’s contacts from a wide range of systems and social networks to provide a single, comprehensive reference at one’s fingertips. In exchange for this convenience, the customer is essentially giving the company ownership over his contacts. Of course, the customer is free to change providers at any time, but the company will likely make it difficult, if not impossible, to transfer this data. The customer would have no choice but to manually re-enter the data in a new address book—a dreadfully tedious task. Thus, the customer is effectively locked in; the wireless provider can rest assured its customers will not jump ship to a competitor.
Some of the early movers have figured this out. Best Buy, for example, sees the potential for locking in customers who buy wireless devices from them by supporting those devices with backup services hosted in their cloud. They are borrowing a page from Apple, which has also locked in iPhone customers through the App Store and MobileMe sync service. Generally speaking, mobile providers are laggards when it comes to cloud services, and they now run the risk of being turned into nothing more than dumb pipes—conduits for customer data over which they have no control and no opportunities to monetize.
But, don’t carve those tombstones just yet. There is still time for mobile providers to join the cloud services game and regain control over their subscribers. It will be interesting to see who succeeds and who becomes a casualty in the coming battle for user mobile data. In this war, mobile cloud services are the weapon of choice.