After months of collaborative works with a team of seasoned analysts, our special report on cloud computing entitled Clouds in 2010: Vendor Optimism Meets Enterprise Realities finally came to a completion. Our interviews with 25 cloud computing thought leaders about technology milestones and their metrics to measure success were inspirational and thought provoking.

On the agenda of the business executives we interviewed, cloud computing is an act for action. From enabling the use of cloud computing services to deploying enterprise-specific cloud computing models, business leaders are full of excitement. Their optimism is not without reason.

First, the new economic reality is driving enterprise customers to look for innovative IT solutions to keep their businesses afloat, if not prospering as they used to be. Also, technology barriers to move workloads into the cloud continue to fall as more vendors are taking an active role in addressing pertinent problems associated with service reliability, security, and interoperability. It could be in the form of strategic partnerships such as the technology coalition between Cisco, VMware, and EMC to boost the deployment of enterprise-class private clouds; and goal-oriented investments such as the acquisition of Cassatt by CA to expand its expertise in meeting the changing requirements of today’s data centers.

I agree that these are good signs of a potentially innovative market development. But healthy market dynamism should be based on a fine balance between an optimistic supply and a realistic demand. With growing pressure to control costs without compromising performance, one can only guess today’s corporations’ next moves. How do enterprise customers approach cloud computing in these days? Are they approaching the cloud with greatest ease?

The recent history of IT transformation in the business world should be a good indicator. On the demand side, business transformation initiatives are far from ending. From bandwidth utilization, IT automation, to cloud service management, the power of cloud computing has whetted corporate appetite for productivity at low cost. The growing availability of IT as a service will essentially shift IT’s role from managing hardware and software to managing services and providers.

Will 2010 be a banner year for cloud computing? Let’s prepare to review the special report with multiple lenses.

When researching my new book, ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business, I was fortunate to interview more than 50 thought leaders in connectivity. Their input was invaluable and their ideas, advice and examples provide very rich context for the Anywhere vision. I’m sharing selected book interviews through the blog.

In this excerpt from my interview with Axel Haentjens, senior vice president Marketing, Brand and External Communications for Orange Business Services, Haentjens provides his take on how the upcoming ubiquitous connectivity revolution will change how enterprises do business, both internally and with their customers.

What do changes like pervasive connectivity and embedded IP in broader devices mean for enterprises?
I have been in the communications business for 15 years at France Telecom [FT]. In 1995, it was very clear that the desktop had to be connected. Now we’re at the point where we have laptops, BlackBerrys, PDAs, and more. So in the last two to three years, you could access documents and e-mail through a PDA from everywhere — from a train, on holiday, etc. For Orange [FT’s key brand], that translated into a huge success for our Business Everywhere tool. We have more than 1.3 million users.

But this year, we see something else. We’re now at the point of pervasive reachability, where you need to talk to people using various means that are all integrated. We ought to be able to start one way, and then move to another.

And it’s not only human connectivity.

Right. There will be five times more objects to connect than people, at the very least. There are mature applications today in tele-monitoring, fleet management and tracking goods. Orange operates mobile networks in 28 countries, including 15 countries in Europe today: 15 percent of our mobile B2B revenue is already M2M. It comes from SIM cards embedded into devices either for fleet management or remote monitoring, and it’s growing at a rate of about 20 percent per year.

Clearly tele-metering is ready. You’ll find security companies doing it, utilities also, and energy companies doing tele-measuring for gas and electricity. We see a lot of apps in vehicles, helping to manage thousands of trucks via geo-location and route optimization.

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Just over 10 days ago, America Movil (AMX) announced a reverse takeover of parent company Grupo Carso Telecom and the consequent purchase of sister-company, the fixed line and cable TV operator Telmex.

The press was rife with speculation what this might mean. Grupo Carso majority owner Carlos Slim was quoted about convergence so the telecom press mostly went off in search of the Holy Grail of converged triple and quad everything. (Grupo Carso is the holding company for all of Slim’s investments from retailers like Sanborn’s and Sears Mexico to bank Inbursa to Grupo Carso Telecom.) The popular press – especially in Mexico – tended to focus on the consolidation of major players and wondered out loud if this was a good thing for customers or not.

Predictably – given the very high market share of both Telmex and Telcel (America Movil’s flagship) – the Mexican competitors cried for government intervention to prevent further monopolization and the Mexican government said they would study the matter.

Frankly, I thought from the beginning that this was more about financial engineering than re-engineering. Complicated transactions like this one (reverse takeover, partial or complete buyout of minority investors) are usually trying to solve some technical financial problem like weak ratios in some part of the group, inconsistent bond ratings or elimination of a holding company discount. In particular, Grupo Carso Telecom, as a holding company with no direct operating activities, could trade at a discount of up to 10% to the expected “sum of parts” valuation. It really has no “raison d’être” and so some sort of reverse takeover was inevitable. The surprise perhaps was that it took so long to happen.

More importantly Slim’s overall management style leverages very focused units with clear mandates and clear performance measurement. As I have written on other occasions, America Movil and Telmex seem blissfully unaware or unconcerned about competitors’ efforts to bundle and package fixed, mobile, broadband and TV. Telmex sells triple play offers aggressively outside of Mexico (and would in Mexico if permitted to offer TV) but so far mobile has never entered the equation even where permitted by regulation. The two companies have shown little interest in network synergies although likewise they never strike deals with strangers. Finally, merging Telmex and America Movil’s quite different corporate cultures – despite their common roots – would have been a strategic flip and probably a management distraction with little positive to show for it.

But this is just my theory and I wanted some empirical evidence. What was the “smart money” saying?

The bond rating agencies were generally delighted putting America Movil on “credit watch with positive indications” a backhanded way of saying “we think this is probably a good thing”. Bond holders are worried about cash flow. Bring together companies with significant cash flow on their own to create a single huge cash generator and they are generally happy. Bigger cash flow means less volatility and more sources to cover loan payments and bond coupons.

Equity investors were decidedly negative. It’s a rule of thumb on Wall Steet that one should “buy on rumor and sell on news”. As the chart below shows, that certainly happened: America Movil stock rose from about New Years until the announcement and then dropped like a stone: from US$50 the day before the announcement to just under US$44 today. (The red line is America Movil’s stock price indexed to its value on January 4th, 2010. The black vertical line marks the peak on January 13, 2010.)

Usually investors punish the buyer and reward the seller. In this case all three participants in the deal, America Movil (AMX), Telmex (TMX) and Grupo Carso Telecom (TELECOMA1.MX), are all affected. This shows that investors have little faith either in cost synergies or upside from convergence. All they know is that buyers – especially those attempting to restructure, especially those trying to take out minority shareholders – usually wind up overpaying.

Admittedly this has been a rough month for Telecom stocks: AT&T, Verizon and Vodafone are all down and Telefonica has received a series of bad news of the kind that makes investors decidedly nervous (steep devaluation in Venezuela, rumors of squabbles among the Telecom Italia ownership group of which Telefonica is the leading shareholder, orders for Telecom Italia to divest Telecom Argentina).

The final nail in the coffin of convergence at America Movil / Telmex came recently when Slim told reporters that they would NOT be bundling fixed and mobile in Mexico anytime soon. Clearly he was thinking about the difficult regulatory and political situation for his companies in that country, although he seemed to dismiss the bundling idea generally even in countries where he legally can offer all four services either alone or in bundles.

For all the excitement created in the press – aided and abetted by the analyst community – this was a strategy devised by lawyers and finance types. Convergence was just a bit of spin-doctoring that eventually backfired.

Star Walk iPhone app on iPad

Based on all the details Wednesday, I’ve written an iPad analysis report that clients should be able to dive into later today. The bottom line: no matter how much you may think Apple ran its hype machine this week, the iPad will be a force to be reckoned with. Why? Because Apple has a unique vision for Anywhere devices and the marketing muscle to back it up. If you have comments or disagreements after reading it, please send them.

Meanwhile, a number of questions and objections to the iPad have popped up online, and given that I’m one of only about 500 people who has used an iPad for a half-hour or so, I thought I’d repond to them here. So without further ado:

Isn’t iPad just a big iPod touch?

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I’ll be publishing a detailed analysis for clients about the Apple iPad and its effect on connected devices (i.e., it’s a big deal) in the next day or so. I have also posted photos that I took of the press, VIPs, and tablets we saw today for those who are interested.

However, I also had some takeaways from the event that fell somewhere between the immediacy of my tweets and the detailed analysis mentioned above. As I look toward the iPad shipping in late March/early April, I see some changes coming. Specifically:

• iPad will knee-cap the netbook market. Despite the millions of units sold, netbooks deliver a lousy user experience; in fact, some netbooks have return rates of 33% or more simply because of that poor consumer experience (see the October 2009 Yankee Group report, Little Netbooks Can Sink Big Brands for details). Unless you’re an analyst or other traveler who has to spend much of your time writing, iPad will be a better investment. Oh, netbooks will survive, but they’ll be in the traditional race to the bottom of the price ladder, while Apple scoops up all the profits from the segment. Said another way, if you know that a device like the iPad will be available, why would you ever buy a netbook?
• Consumers will struggle with whether to buy the 3G iPad. iPad is the archtype Anywhere device: its broadband connection and its links to networked apps and content are what make it special. But given that adding a 3G connection adds more than 26 percent to the iPad’s purchase price, consumers will have trouble deciding whether it is worth it, even before the prepaid broadband connection.
• Prepaid iPad broadband will win over consumers. Apple’s announcement of AT&T’s mobile broadband pricing for iPad just told the consumer world that they are paying too much for mobile broadband on postpay plans. Most of the rest of the world already has some sort of prepaid mobile broadband; it’s just a matter of time before the U.S. gets with the program.
• iPad represents the beginning of the end for the PC desktop metaphor. Windows, mice, title bars, and open-save dialogs have been mainstays of PCs for more than 25 years; in fact, the introduction of the original 1984 Macintosh made them cool. Yet the iPhone and iPad use none of the software elements of these 1980s, opting instead for a full-screen multi-touch experience that makes smarter use of screen real estate. Once someone figures out how to integrate multitasking with multi-touch (10/GUI perhaps?) without dramatically increasing the consumer’s cognitive load, consumers may well decide that these graphical elements no longer serve any useful purpose and finally let them die a natural death. At the very least, they are unlikely to ever be cool again.

"Last time there was this much excitement about a tablet, it had some commandments written on it." -- the Wall Street Journal

Here are my quick reactions to today’s Apple Special Event; expect some more thoughtful analysis in a few hours. But the highlights of the last few hours were:

• A new Anywhere tablet device called the iPad. The $499 iPad lets consumers listen to music, watch video, read books and periodicals, and view TV shows, all from a 10-millimeter-thick multi-touch LCD tablet. The iPad is designed to be a media device, not a PC; the major software packages available will not be suites such as Microsoft Office, but media-oriented software such as Apple’s own iWords, which Apple is releasing in touch-enabled form for the iPad. That said, the iPad will run all iPhone apps, and additional packages from independent developers for iPad will be sold through the iTunes App Store. 
• High speed wireless connectivity via 3G and WiFi. iPad boasts more than 100 Mbps wireless Ethernet connection using the 802.11n standard for connecting to content in the home. Versions sold through and AT&T will also feature 3G mobile broadband connections, which will be offered on a prepaid basis. Up to 250 Mbytes per month will cost $14.99; Unlimited monthly broadband will cost $29.99.
• A new iBooks book reader application. Apple decided to attack the Kindle market by offering an eBook reader on the iPad and added online purchasing via a new iBook Store. The iBook store has 5 publishers signed on to deliver content already; more are in the works. 

Will it catch on? Based on a few minutes of hands-on playing with one, absolutely. The iPad bears the same relationship to a netbook that the original Mac did to DOS PCs: it’s a complete rethinking of the reading and media consuming experience. Apple’s full-color, full motion device makes not only netbooks, but any product with an E Ink display look tired and dated. And if you’re a publisher who lives and dies by what your content looks like, you want to be talking to Apple now; any other digital distribution is going to look very last decade.

Stay tuned for more details and a deeper analysis for clients over the next day or two.

When researching my new book, ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business, I was fortunate to interview more than 50 thought leaders in connectivity. Their input was invaluable, and their ideas, advice and examples provide very rich context for the Anywhere vision.

I wish we’d had room to incorporate more of our interviews in the book — but with the infinite capacity of the Web, I’m sharing some of them here.

In this excerpt from my interview with Dr. Robert Metcalfe, co-inventor of Ethernet, founder of 3Com and general partner of Polaris Venture Partners, we discuss the path to ubiquitous connectivity, obstacles to its growth, and how connectivity is accelerating human evolution.

Bob Metcalfe (c) Marcin Wichary

Universal, ubiquitous connectivity—yes or no?

Of course it will become universal. The only exception is the normal one.

What’s that?

Well, if you look at that famous picture of the Earth at night, you’ll see huge swaths of black—for instance, most of Africa.

That’s a pretty big exception.

Right. So it’s a question of time. Impatient people say the digital divide is a condemnation of technology—that it’s nothing short of criminal that we haven’t reached everyone yet. I say, ‘Au contraire. Don’t blame me for not getting them connectivity yet when you haven’t gotten them electricity, roads and clean water.’

You sound like you take it personally.

Sure. You can’t talk about connectivity without talking about Metcalfe’s Law, so how much more personal can it get? It’s not my fault there will be tribes that don’t get connected.

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ANYWHERE the book talks a lot about a future with many more connected devices than those we know and love today. So when I signed our book deal at the beginning of last year, I said it would be a terrible irony if we couldn’t ensure that the book would come out both in hardback and e-book versions simultaneously.

And that was the plan… but e-book publishing is still a bit new and a few technical hiccups stood in the way.

No surprise that I had to withstand a few gentle gibes during our webinar last week, when a few of you pointed out immediately that the Kindle version wasn’t on offer yet.

But as of this weekend, the Kindle version is now available from Amazon. Kudos to McGraw-Hill for pushing this through. We had a quick look at it Tuesday; while you sacrifice a few of the chapter opening graphics, it’s all there and quite readable.  How very Anywhere.

Just in time for Yankee Group’s e-reader forecast, coming out later today!  More ANYWHERE e-book developments are in the works; I’ll post more on this later.

Now that CES is a week behind us and I’ve had some time to put my thoughts together and recover from the dreaded CES flu, I’ll be writing a few blog posts on three big CE products/trends that garnered considerable attention during the show:

1. Connected Cars
2. eReaders
3. 3D-TVs

 I’ll start with a short post on connected cars, as this is really the first year where they received standout coverage: Over 380 in-vehicle technology exhibitors graced CES’ floors this year, Ford CEO Alan Mulally delivered a keynote, and a CEA press release issued before the show claimed that sales of in-vehicle technology topped $9.3 billion in 2009. Yes, you heard correctly, $9.3 billion.

A number of players will profit when more technology finds its way into our cars. Some statistics presented during the show highlight just how much network operators, automotive companies and legislators stand to win. Take a look:

• Network Operators: Demand for voice and data carriage in connected cars will open up a new market for network operators. On average, over 26 million hands-free calling minutes are purchased each month by OnStar subscribers. Alcatel-Lucent’s ngConnect Program prototype also demonstrated what LTE data plans will do for in-car streaming media.
• Automotive Companies: In-vehicle technologies are driving automobile purchases more than many analysts had anticipated. 32% of Ford buyers indicated that Sync was critical or important in their purchase decision when buying a car. What’s more, 70% of customers who participated in Sync demos across the country indicated that they are more likely to buy a Ford vehicle.
• Legislators: Legislators concerned with driver safety will be pleased with some statistics from Nuance, a speech recognition solution provider. Analysis of driver eye movements shows us that drivers keep their eyes on the road 200 to 300 percent more when using speech rather than manual input for tasks like music selection.

Given the diverse set of players in this emerging market, Yankee Group is including a number of questions on connected cars in its updated Consumer Survey. As data begins to come in, expect to see a publication on the subject in the near future.

I got a rude awakening early this morning: the ice and snowstorm that blew through Massachusetts last night knocked out our power. That meant we had no lights, no heat, and no running water (darn those electric well pumps!).

But, like in Emerging Anywhere countries, even though we didn’t have power, we did have Internet access via our mobile phones. And that strange disparity—the ability to call people and access information from the rest of the world when we didn’t have basic infrastructure services—provided personal emphasis to stories I’d recently read in the news over the weekend.

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