I spent a couple of days at the big annual event for bankers last week in Boston hosted by BAI.  They also had some high quality speakers, two of whom, Jack Welch and Al Gore,  I’ve had the brief honor of meeting previously. The third was Ram Charan, noted author and educator, and as this is the first time I heard him in person, I must say that he was excellent. All of them are plugging their books and writings including AL Gore’s latest, Our Choice: A Plan to Solve the Climate Crisis. But that is expected and I look forward to reading VP Gore’s latest.

What I thought was to a degree absent was a session on how cloud computing can assist banks, especially those that fall in the below $10B in asset range. These could be represented by banks, Savings and Loan’s (S&L) or Credit Unions (CU).

Here is what I thought was there and what was missing:

Some banks are using cloud computing for the traditional Software as a Service (SaaS) capabilities including sales such as Salesforce.com.

Some are using it to augment some of their infrastructure needs including data storage.

A few are using it to augment website capabilities.

What I didn’t hear was a bank or other financial or lending institution that started its core operations around cloud computing. And I think there are still a lot of valid concerns why this is not happening as rapidly as in some other areas of business. Let are my thoughts:

First, banking is highly regulated and likely to get more so, not less. Consumer and depositor data is closely monitored as part of the Gramm Leach Bliley Act. Cloud computing opens some doors to loss of data security.

Second, the OCC and OTS have considerable oversight in regular audits of large and small banks. Getting caught in a bad audit is not something anyone wants.Cloud computing may not lend itself well to an intense audit.

On the other hand banks, new, upcoming and traditional all can benefit from this approach. Traditional banks get to employ new services faster and quicker, while new banks don’t have to invest in a lot of Information Technology (IT) assets to get moving.

I would hope that next year we’ll hear more concrete stories of how banks are employing and deploying greater and wider services through cloud computing providers such as Amazon, IBM, Google, Oracle and Microsoft, as well as some of the outsourcers, Independent Software Vendors (ISV’s) and bank services providers including FIS, Metavante, Harland and Jack Henry.

If you would like further information on this topic, please feel free to contact me at ralphs@rgsmanagement.com 

As most of you probably know, Microsoft, up until a few days ago, had been using its Live Search engine with MSN. However, Live Search from Microsoft has been in a bit of classic web branding quandary as livesearch.com is owned by Tyler Tullock (not Microsoft) who is trying to retire on the ownership of that domain name by either selling it to Microsoft or getting compensated by driving traffic to Google (and to be fair, he did own the domain first).  On the enterprise search side, Microsoft leads with FAST, the engine they also purchased about 18 months ago – but FAST doesn’t appear to play a major role in their consumer oriented approach – at least at this time.

The big money and market share play is around consumer search and Live Search at least had little or no brand or market control compared to Google or Yahoo. So Microsoft, in its quest to gain a share of search player status, has been investing in their latest incarnation of search which we know is branded as Bing. Bing now has its own website, name and look and feel.

Accordingly Microsoft has been investing heavily in promoting Bing, I believe to the tune of nearly 9 figures – a hefty sum these days for advertising and promotion.  But what’s the alternative? According to their Q3, March 30, 2009 financials, overall revenue was down 6% and online advertising revenues took a double digit drop of 13%. So it makes sense that Microsoft needs to know if they can build a competitive market in search in the near future and the timing is hopefully propitious for them as they enter their new fiscal year.

How will Microsoft know if Bing is successful? That question was posed last week to Scott Howe, Microsoft Corporate Vice President, Advertiser and Publisher Solutions Group, during Federated Media’s Conversational Marketing (CM) Summit in NY. His company, aQuantive Inc., was bought in 2007 for something like $6B, so it was no surprise that he had his own Mercedes limo driver parked out in front of the Hudson Theater in NY waiting for him (on 44th Street in the theater district, that is usually reserved for real entertainers).

In any case, he was asked how much he thought it was worth to Microsoft for a percentage point gain in market share (paraphrasing of course). Obviously, and as he replied, Microsoft is not looking for incremental gains, but something that elevates them into the high teens and beyond. Anything else in the big picture is probably a failure (my comment – not his).

So if Bing booms, then Microsoft scores big time. It will likely eat into Yahoo and Google’s market share, causing at least for Yahoo a further decline in value –something that they can ill afford. And what a great way for Microsoft to start the New Year. On the other hand if Bing bombs, then Yahoo’s stock possibly increases making it both more expensive and probably more imperative to get back into negotiations with Yahoo. In either scenario, Microsoft should know by the end of their Q1 which direction the market wind is blowing.

Bing already seems to be picking up some early momentum (several percentage point increase in market share) and the search engine and its interface have some pretty nice features. The question is whether it’s enough to get people to migrate and stay migrated.

In this blog, I’d like to explore a few thoughts on internet search, enterprise search and content management, since last week I attended, for the second time, the Enterprise Search Summit conference in New York City.

Since I also attended the Search Engine Strategies Conference (SES) in March, it’s difficult not comparing the two conferences. The attendance and sheer size of SES is an order of magnitude greater than the Enterprise Search conference (2000 attendees vs. 200) and the mega-companies such as Google and Microsoft have a much larger showing at the SES conference.

It is commonly presumed that enterprise search is meant to manage the search for content inside the business firewall, while internet and web search is geared to find content for the general public. In general that is true, although companies such as Microsoft and their FAST and Sharepoint offerings as well as Google and their business search division have blurred some of these distinctions. Since I don’t want to spend an entire blog on differentiating how enterprise search differs from internet search, a decent summary of some of the distinctions can be found from New Idea Engineering (an enterprise search company).

Since I’ve spent time in all 3 areas, in some of my ensuing blogs I will attempt to look more closely at each area separately. But to begin with, and without trying to sound like a Gartner or Forrester analyst, I’d like to offer my 10 predictions and observations:

·  Google and Microsoft will largely control search both from an internet search, as well as to a large degree enterprise search as well.

·  Google will have to purchase or invest in a larger business-side search organization to further penetrate the enterprise area. Its skills, as evident from the Enterprise Search Conference, are clearly quite thin on the business end.

·  Google and Microsoft will buy, invest in or invest organically in more social networking companies and capabilities (Twitter, Facebook, etc) to broaden their offerings and public reach.

·  Microsoft, to maintain a player status, will buy Yahoo to replace MSN and its Live Search search engine which have too little market share. Google still commands 65% +/- marketshare. Microsoft will then have to determine whether they can embed some of the capabilities of FAST into Yahoo.

·  Enterprise search and content management will be constructed on a Microsoft model including Sharepoint and FAST, further marginalizing companies such as IBM, EMC and Open Text

·  Microsoft, through its Sharepoint offering, may eventually own the entire new content management space. Google Apps potentially have a play in this space, but for the present at least is not ready for enterprise prime time at a major corporate level quite yet. I don’t see anything dramatically new from EMC or IBM and I hope Open Text can keep pace to keep everyone honest so to speak. But today’s software industry is based on revenue and market share, and this industry is moving so quickly, only those with the deepest resolve and pockets can keep with it.

·  Business intelligence and analytical ability will become further embedded in the internet search engines (not just enterprise search). As evidence, FAST, originally a focused internet search engine that morphed into an enterprise search platform, has some significant capabilities in the business analytics area (guided navigation for example).

·  Companies such as SAP and SAS who are attempting to move into the search side with their analytical engine will have to form alliances, build API’s or license their technologies via an OEM agreement, or they will be wasting their time.

·  Other enterprise search vendors such as Autonomy, Endeca, Vivisimo and Exalead may to have to focus on certain vertical industries to be a viable play (eDiscovery is an example), or be bought.

·  Finally, search (internet and enterprise) and content management will further converge technologies and provide capabilities to the end user that can locate content – whether structured or unstructured – either in a dimensional way (folders and files) or in a more search friendly way.

In the blogs coming up, I plan on discussing more on these relevant topics as well as share some related work I’m doing in the healthcare and medical area around search, marketing and social networking.

I’ll begin by providing some evidence of how important this is to both the vendors and buyers of cloud computing technologies.  As an example, I recently attended (May 5-6) the Microsoft Developers Conference in NY City. While I don’t put myself into the core developer space, I certainly try to listen to and learn from the developers of technology. This years conference was in fact MC’ed by a couple of Microsoft executives that come from their Cloud Computing Platform Group, Doug Hauser and Mike Werner.  Both of them talked about the committment that Microsoft is making in terms of material, equipment and people resources to their internal and customer-focused use of cloud computing. 

Companies such as Microsoft, as well as Amazon and Google, each have their own strategies around cloud computing, including Microsoft’s Azure, Amazon’s S3 and Google’s AppEngine. They are also buying up massive amounts of computing power to fuel their expansion and provide a new layer of centralization for software and internet services. Some estimate that these companies are buying upwards of 20% of the world’s output of servers. Even one of my daily reads, the Financial Times of London, stepped in on March 26th and did a one-page review in their daily Analysis page titled, Cloud Control.

Cloud computing is essentially architected around a stack of services and applications that can be accessed from inside or outside the firewall (corporate or personal). What that boils down to is that the end-user can gain access to a variety of software programs and services that no longer have to reside locally (on your laptop, desktop or local server). For instance, I not only use Microsoft Outlook on my local system but I have also been expanding or complementing those capabilities with services from Google, such as Gmail and their web calendaring system. And companies such as Salesforce.com have been delivering powerful internet services applications for quite some time.

What’s new here is that businesses are redesigning some of their traditional IT centers to become more nimble to take advantage of these cloud services while architecting their internal portfolio of applications to mimic the way cloud computing is being delivered externally, but controlled within their corporate firewall.

So how are vendors marketing cloud computing?  Here’s some of the benefits that I have captured in my own words:

• Free – OK not everything is free, but for many businesses you can’t get much cheaper than this – such as Gmail, Google’s calendar and contact. Essentially this is a pay as you use service over the long term.
• Fast – you can get access to application and services quickly, without investment in software, time and people resources.
• Functional - you can try different versions of similar services (CRM, etc) and compare their capabilities and functions, side-by-side, to determine which services meet your needs and situation best.
• Failure-proof - this is a win-win for IT and Lines of Business. The IT department isn’t saddled with software that requires mounds of technical expertise and the business lines are free to experiment a little.
• Fun – with all the above, hopefully cloud computing opens up some of the latest capabilities of delivering and trialing software and internet services in a benign, safe and unobtrusive way.

I’ll conclude by focusing in on one of those last words, safe.  To market and sell services, vendors and providers of cloud computing services must guarantee the safety and security of any data that we entrust to them, whether it is our email or business content.  This key precept will be one of the important building blocks and of course marketing fundamentals for a succssful cloud computing service.

Keep my data safe and provide me with a service that I can’t get inexpensively, quickly or easily on my own, and you’ll always have my attention and wallet.