Ubiquitous Computing - Developing the new generation of Metasystem and Metadata Visualization for Economic Monetization

We are entering a next phase of the cloud enabled era where the level of interaction led by four mega trends will shape our industry and many others.

Devices ubiquity
New capabilities to use anywhere on any device from table, smartphone

Information Context Aware
The ability to collect, metricize , monitor and platform machine to machine M2M, machine to human M2H telemetry across a wide range of structured, semi-structured and unstructured data

Situation Context Aware
The ability to create new physical and virtual environments with intelligence information an process context from the level large to the very small.

Internet of Things 
The ability to multiplex and multiplicity of entities, assets and services spacing beyond the computing sphere into many other metasystems in social, commercial, organizational, biological and sustainability system

The ramifications of these trends are only becoming apparent. While ubiquitous computing has been a theme for a number of years , the convergence of multiplatform technologies and experiences is only begun to be felt across commercial and social networks; accelerated by the growth of huge public cloud communities and rapid scaling of national level data center and computing infrastructures. Cloud enabled ubiquitous systems is not just a software application centric view of the world riding on the back of greater infrastructure investments and connected space. It's a fundamental shift on hoe economics and monetization works in micro and macro economic marketplaces and user interactions.

Its nothing short of a revolution in the way devices and machine enabled business and social networks can interact to create new business models and added value propositions. The very fabric of infrastructure is becoming interwoven with new ubiquitous ecosystem science that is trans-social, trans-border, trans-global in nature.

Synthesis and model 
How metadata , edge networks and metasystems need to connect across technical, social-societal, economic, socio-political and biological spheres of influence and

Simulate &amp
Test How "live" systems and feedback have enabled a step change in the immediacy and indirectly collection and creation a large data set footprints in the scale of Petabytes and exobyte magnitudes.

Interact 
 Ubiquitous methods and devices to span individuals, groups, networks and domains of interaction : Places, Spaces, Pads, Boards, Tabs, embedded devices and micro and nano technology creating new experience visualization, metrics and feedback awareness.

Economic Strategies for Cloud enabled Ubiquitous Systems 

Understanding ecosystem dynamics and their potential for monetization requires a focus on micro and macro economic factors.

Macro-economic Drivers 

Monetization Strategy is capabilities that generate revenue in a market (internal market, external market to the enterprise)

These monetization strategies are more focused on macro behaviors and scale of monopolies between participants and geographic locations.

These exist in physical and virtual spaces in digital networks.

Micro Economic Drivers 

These monetization strategies are levers that you can pull or push inside your own company as ways to generate revenue and profitability.

There are also other monetization strategies that consider the environment and ecosystems that you are operating in.

These strategies recognize the behaviors and influences of networks and connected spaces

Differentiators and competitiveness of on-demand offers need to consider both micro and macro economic strategies. Defining sustainable pricing and market channels needs to be aware of how the macro environment works in on-line digital domains and digital markets.

CIEL – Cloud Interactive Ecosystem Language – New Visualization and Monetization approaches 

This session examine the rise of ecosystems in the large and the small scale and their impact on business models and monetization strategies. Central to this will also be the ability to visualize and enable construction of effective ecosystems that take advantage of these new levels of distributed integration and automation.

At the macro level we see different regional entities such as Europe, Asia, Americas and Africa continental markets. How these markets are structures include the convergence of smart cities and smart environments.

 

This leads to the design of cloud enabled ubiquitous ecosystems

• Common infrastructure 
• Core services for cities, organizations, communities, groups, individuals 
• Dedicated specialist services for task, niche and contextual aware systems. This spans cross-border design and integration issues. 

CIEL enabled constructed Ubiquitous systems 

This enables structures systems design and visualization across multiple ubiquitous environments

CIEL – Cloud enabled Ubiquitous Ecosystems 

Ubiquitous ecosystems involve systems of systems thinking and multiple “smart” systems viewpoints and interactions.

Cloud enabled systems are design and delivered as ecosystems context require a new kind of approach to understanding and visualizing systems design.

• Technological systems: Devices, networks, compute, systems  
• Economic and commercial systems – Markets, business processes, demand and supply chains and value networks 
• Social and societal systems – persona's, connections, citizens, governments, policies 
• Biological and environmental systems – resources, sustainability, energy , consumption

Takeaways from the Session 

• Definitions of ecosystems and the role of ubiquitous computing 
• Different patterns in Cloud enabled Ubiquitous Ecosystem design 
• Understand how Economics and monetization are affected in ecosystems and the decision processes that come with planning effective use of ubiquitous systems. 

Mark Skilton
 June 2012

What are the risks of misreading the new Social Processes that develop social enterprise ecosystems ?

The emerging new social media and social networks is a constant reminder of the new internet socialization that invades many aspects of personal and business life. The numbers speak for themselves in connected communities, smart phone “switch-on” rates and app store growth.
However these new social systems are also changing many traditional business processes that otherwise have remained largely the same for many years but are now breaking down into new inside and outside the enterprise communities of services, devices and interconnections.
Received wisdom speaks of, Social Network Optimization SNO in search engines and new portal-like enabled services that are becoming defacto methods to “like” and collect feedback and behavior analysis.
These trends are changing key business processes into a more general event-driven response to the use and communication channeled through online sites, mobile devices and services.
What is clear is that identifying strategies to build these into main stream business and operating models is a matter of urgency to address very real, near and present competitive changes and size of the addressable market opportunities. These trends are disrupting traditional markets that focus on content ownership rather than extending the service to leveraging and targeting how the content, be it photos, news alerts, or other services are be discovered and used.
The risk of miss-reading these trends is significant to the economic wellbeing of the enterprise
• The cultural impact of products and services that have “moved” outside the enterprise into new business models of discovery and delivery
• The changing perception of value from consumers and partners who have a different “view of the customer” which includes other on-line service providers that can
• Moving “goal posts” of addressable markets as online boundaries, communities and behaviors shift and combine in new ways
• Brand miss-alignment and changing expectations and service requirements to underpin security and quality of service
• Missed opportunities to leverage Joint Ventures, service bundles and other monetization strategies that can better address customer and provider needs
The connected spaces of online communities enable content to be augmented and bundled to build “loops” that drive behaviors to use more content or different services and content.
These strategic priorities include
• Establishing core content propositions such as “knowledge”, “photos”, “messaging”, ”lifestyle”, “Entertainment”, “Time saver aggregation and alerts”, “games” that build value-worth in individuals and group community associations. The product or service feature set has to recognize “group” value and behaviors , not just its intrinsic value to individuals.
• Defining platform strategies that include 3rd party and your own platforms and knowledge. This extends to Joint Ventures and partners as it’s no longer just ownership but also connected relationships that matter. This enables a wider context and recognition of a sense of community place and breadth beyond a traditional enterprise own portfolio viewpoint.
• Identifying new business operating metrics that recognize time based usages and community behaviors that measure and drive the assessment and augmentation of “loops” of discover, inquiry, brand reinforcement, community recognition and economies of scale leverage.
• Building service bundles that leverage, cross-sell and respond to time-based trends and events as they occur. This means that the metrics and feedback mechanism need to be much more strategically sensitive to how the community and usage patterns are evolving and being captured effectively.
• Creating referential integrity and security in the content and service is more a prerequisite in making the products and service more understandable, consumer friendly and recognizable. While platform integration will be both open and closed as different alternative ways to build secure and viable market share, the underpinning quality of service and sustainability in the longer term will be a key factor is maintaining community engagement and service value. Focus on the value of the experiential processes will be increasingly necessary as much as the dynamic nature of the hard costs and quality of operations to deliver the desired consumer experience.

What’s important is that while monetization can be from direct content or service sales, there is also further addressable revenue from augmenting and understanding how platforms and services are engaging and added value to consumers and community behavior feedback.
Gaming is just one of the “loops” of driving behavior patterns that consume and reinforce information and content usage. The more critical point is that the domains and boundaries of content, platforms and services is much less ridge in the sense of new markets of communities. But it is also much more the emergence of new competitive forces that are driving a new era of ecosystem oriented products and services. These are challenging and driving away for the old Porter five forces model of competition, suppliers, customers and substitutes to a combination of new drivers and lever.
The new five forces model for the next ten years might be:
• Community evolution drivers
• Platform discovery and usage drivers
• Market Boundary interoperability and portability semantic drivers
• Device capabilities drivers
• Informatics and ecosystem science visualization, sustainability and delivery drivers

The risk is to think that “it’s just new services in the same business strategy and portfolio” may dismiss some significant behavioral awareness change that may be necessary to understand these drivers. The issue may infact be the game itself has changed in the way products, services and industries actually work.

Mark Skilton
Jan 2012

Multi-tenancy design choices

As a general observation , many if not all of the telecoms standards and to a large extent service management and cloud computing reference standards do not address multiplexing and multiplicity of architecture abstraction very well. In short, they don’t recognize multi-tenancy architectures as a strong pattern in deployment design or operation. This is symptomatic of using earlier ontologies that restrict the design to business process and service information payload examples that abstract message and interaction tiers but not the underlying architecture instantiations. These matters are often abstracted as schema taxonomies for multiple entity users, but this obfuscates the underlying source and target architectures which may be single tenant. This is a challenge to existing architectures where multi-tenant architectures have been developed.
• Configuration control is multi-tenant
• Resource allocation and balancing is multi-tenancy
• Scalable extensions is based on a multi-tenancy usage model
• Service management is recognizing multi-tenancy version states
• Abstraction of service management and service control from tenant using the service
• Security policy management at individual , group and entity level may support multi-tenancy service abstraction
• Ability to extend or remove new or existing tenants that are new or existing legal contract entities (enable growth or change market service)
Avoiding these design states may be difficult if the underlying operating system and architecture prevents shared service tenancy between BSS and OSS. An example of this maybe iOS5 which though m=not held as a example of multiple tenancy can be described as a OS design that abstracted the common resource management functions over those that are resource consumers or providers of the services that operating in the environment. In this case environment management has been abstracted to enable cross tenancy support.
Going forward, multi-tenancy choices may be necessary to prevent restrictions in growth and agility of platform, OS and the wider adoption and phenomenon of smart apps, devices and services to meet the new customer and communities demands of the future.

Making money as a Cloud Provider

The percentage of IT budgets allocated to Cloud services continues to increase as the use of as a Service" becomes a mainstream strategy for enabling the full spectrum of business activities.
The now famous "Capacity-utilization" cloud business model adopted by Amazon (http://aws.amazon.com/economics/ ) highlights the revenue potential of moving consumers from a fixed to variable usage-based cost model. However, though Cloud revenues are increasing, the profit margins for lower value-add services such as commodity cloud storage are shrinking. Fortunately for new market entrants selling commodity capacity is just one way to make money as a provider of Cloud services or as a supplier to those providers.
Providers who consciously and deliberately identify which combination of business model elements to adopt in support of their Cloud service offerings, and who have a clear strategy for making the necessary business model transformations, have a much higher probability of successfully exploiting the potential of cloud. {"reaping the benefits" is an option; you had "exploiting the benefits"} However, this transition to cloud, an on-demand business model, can be very rough for a provider used to selling custom, high-end services to established large enterprises, or for a hardware or software vendor used to getting paid up front (one-time charges). Taking on cloud characteristics means learning to support a one-to-many paradigm; changing cost allocations from an engagement to a service offering (product) basis; and getting used to an annuity revenue stream.
In this session we will present the following cloud business model elements that cloud computing and service providers can adopt to build greater ROI.
* Seek buyers with complementary consumption profiles to drive higher asset utilization (yield curves)
* Over-provision and commoditize resources to drive higher returns
* Develop operational efficiencies to improve price and/or service level objectives
* Enable better access to market choices to optimize license costs
* Offer aggregation and integration solutions (which help customers build customer market share and maintain coherent IT architectures) to expand the revenue opportunities
* Shift to "Appstores" and self-service (sales) channels to reduce sales costs and to expand the addressable market
* Build services for adjacent markets and/or build service options and add-ons (service variations) to expand the market opportunity horizontally and/or vertically
* Manage risk to increase outcome revenue and margin
* Use creative pricing and charging mechanisms to increase outcome return

Why insight and intelligence will matter to you and your business

While business and technology environments shape events, developments also shape what these environments mean and change seems to be faster then ever. So insight and knowledge of the environment and behaviours will be essential in being able to better understand how best to respond and position you and your business.

The word "transformation" is a description of the alteration in a state of a system. But while transformations have been going on for as long as recorded history, transformation of the developments and behaviours have become more intertwined.

Lessons learnt from AI and the computer gaming industry

The development of artificial intelligence AI has long been a goal since the 1950s and the developing of computer programs for chess gaming. Not until the 1980s did computing seriously start to challenge and beat human Grandmasters. But these are arguably not real world problems as the conditions and game play are within strict rules and simple predefined pieces.

The lessons learnt are very similar to the current challenges and emerging changes that we see in the business world.

One may well ask why should this be relevant to cloud computing when the story of services and implementation may follow traditional lines of infrastructure and services. The answer is that positioning the right cloud solutions as a cloud provider or seller is affected by the level of understanding and insight of the industry and value propositions. But more importantly, from the consumer and buyers side; the level if information and insight to needs and buying behaviour is becoming increasingly more digital across a range of online channels, devices and services.

Events, data and transactions are more than ever interactive and follow patterns of choice and relationships in a marketplace. Understanding these will bring new competitive advantage and new emergent opportunities.

Note on Risk Management and the Cloud

Think of it as a quadrant of conscious and unconscious competence and incompetence.

- Unconscious incompetence

- Conscious incompetence

- Unconscious competence

- Conscious competence.

We move from unawareness to awareness of problems, from unconscious incompetence, to conscious competence. It makes me laugh that unconscious competence exists because you are doing the right thing but you don't know it (!). We can see a lion in a room and know it’s a risk. It we are looking the other way it is still in the room but we are unaware of it.

The assertion of some risk experts is that there is no such thing as an unmanageable risk - we just need to plan contingency for this. Arguably the Oil leak in the gulf could have been planned and resolved but the risk threshold and the nature of risk changed over time. (Risk status is not static it can change over time - another lion enters the room which may either fight the first Lion or you have two Lions coming for you. One lowers the risk outcome the other increasing it.) It’s about risk tradeoffs. If you have a gun to mitigate the lion then you have lowered the risk. A Crash helmet is a risk mitigating device but it you travel too fast it can still not protect you and kill you etc...

In risk management there are planned risks and unplanned risks which you can atribute risk factors and weighting to. Unplanned risks can still be conscious events unplanned or worse unplanned events that you were not expecting (the oil rig issue)

In cloud computing there are known risks but there can also be unknown risks as it’s a new technology and we simply don’t have a priori knowledge of the risk or the technology to know everything.

Just moving the risk to a 3rd party does not change the existence of the threat or risk - it’s still there but it’s someone else’s problem - but we assume they ca consciously plan for it. We have examples of cloud vendors not doing this- they fail and the knock on effect is that their tenants are affected too - a classic example of devolved risk but not resolved - it’s still there.

Hope this makes sense - it’s all just risk management theory - Warwick Business School, that I have some associations with in the UK have this covered very well and as you can imagine it’s a big topic particularly with the recent finance industry failures - like Goldman Sachs - they had some serious issues of course in this area of perceived and managed risk - they arguable had institutional denial - the halo effect of assuming the best etc.

I advocate that it’s a matter of weighing up different risk scenarios - private or public or other and to get one group of people to see that it’s a lower risk better option than the other - life is rarely that straight forward but I think many technology adoption curves and transformation programs is in effective moving people across different risk weighting - consciously or subconsciously, cooperatively or coersively...

The importance of a Business Perspective on Cloud Computing

The following is a working extract a soon to be published paper for The Open Group for the CBA Project team.

The extract here covers the business value and the financial metrics of cloud. This and other aspects are planned to be in the Cloud ROI white paper to be published in The Open Group Rome in April 2010 Conference.

The importance of a Business Perspective of the Cloud

From a business perspective, the way an organization operates critical business processes and their quality of service QoS is key to business operating success. Identifying competitive business processes as well as standard commodity operations will improve the focus of innovative market growth and cost of service optimization activities made possible by cloud opportunities.

Just focusing on infrastructure improvements may result in cost rationalization but may miss the impact and value of applications and business processes to the end customer. Quality of Service QoS is an essential ingredient in evaluating the business effectiveness. The elements of QoS are made up of infrastructure, resources, activities and services spanning the whole life cycle of business.

In cloud computing the operating challenges experienced from one customer can be proactively fixed for all the other customers of the cloud service through using a shared platform. So value can be leveraged from amortizing economic economies of scale across the collective membership potential of a service ecosystem created by the cloud.

Just looking at cloud computing from a technical infrastructure point of view is potentially missing the wider picture of the impact of technology on the business.

Overall what matters is defining the Value to business. Value can be defined in many ways, not just financial value of the total cost of ownership and return on investment but can also mean customer value, seller provider value, broker value, market brand value, corporate value as well as technical value of the investment.

What is important is to take a portfolio management viewpoint such that all these value factors consider the impact and value to business.

The work of the CBA Project in The Open Group is seeking to identify the key cloud buyer questions and a Meta data lexicon that is in a language business can understand and use to target solutions to meet real business requirements.

In search of Cloud Business Value : Moving from Capex to Opex and Pay-as-you-go, a financial viewpoint

Software as a Service SaaS, utility computing and cloud computing are recent themes in information technology that seek to change the provisioning and utilization of IT.

Key to this is the change in cashflow and cost of capital investment.

Moving to a pay-as-you-go model means the cashflow of your business is changing. Sources of revenue and outgoing cash expenditure are on a usage basis. Cash flow (Cash Flow after Taxes CFAT) is a financial measure of a business ability to generate cash flow through its operations. Moving to an Opex model drives revenue increases, cash and working capital changes. Adopting the cloud computing paradigm seeks to make more money (increase revenues) while driving capital costs down through greater efficiencies of working capital. Net present value (NPV) of investments often need to consider the discounted cash flows of the cost of capital to assess the value of the investment return.

Moving from Capex to Opex is a change in the basis of capital investment usage as upfront and ongoing costs are changed by the cloud computing business model. The focus is on the ability to maximize the leverage of that capital while minimizing the risk to the business in Capital used for initial investment and ongoing maintenance charges. Using an Opex model can potentially remove and release capital that would otherwise be used for initial investment and ownership of IT assets. Alternatively investment in a cloud computing platform may require capital investment and changes to the payment and funding of the service as it is amortized over a wider shared service model for economies of scale. The cost of capital from sources of equity and cost of debt point of view can change for private and public federal companies sources of funding. The overall goal is to maximize the use of capital by best use of the debt and equity funds. In cloud computing the use of Opex moves the funding towards a an Opex model for leverage and risk management.

This white paper examines some of the metrics and performance indicators that drive business towards the cloud computing value model.

A finance viewpoint

What matters is defining Value

Weighted Average Cost of Capital WACC

The issue between the use of capital investment and the weighted average cost of capital (WACC) outlines the issue around debt and equity funding in private companies(. Public federal companies also have sources of funding that are from government sources of funding.

WACC describes the company cost of capital from a equity and debt view point. The cost of equity and the cost of the debt to the organization can be examined through the weighting of how the financing of equity and financing the debt are managed over time.

Ref: http://www.investopedia.com/terms/w/wacc.asp

Cash flow after Taxes CFAT

Focusing on the uses of the investment funds is the flows of inbound and outbound cash.

Cash flow (Cash Flow after Taxes CFAT) is a financial measure of a business ability to generate cash flow through its operations.

Net present value (NPV) of investments often need to consider the discounted cash flows of the cost of capital to assess the value of the investment return.

Ref: http://www.investopedia.com/terms/c/cfat.asp