Theory versus Reality: Automotive Product Specialists

I have long supported the idea that the traditional  role of the automotive salesperson is under siege and will soon be replaced; first by a legion of hourly, retail refugees and then by whatever online, kiosk, or other platform that finally cracks the car transaction as a service secret code.

I will admit I was wrong, at least about the first evolution.

Automotive retail giants have tried the product specialist position, someone that is not a salesperson, with limited success and failure. I thought that this shift would be successful because that is what customers wanted. Customers want salespeople, many times they need a salesperson to help guide them to a decision in a way no hourly product specialist could do.

The problem with the specialist is that because of increasingly complex rebate and finance structures and the burden of state and federal regulations a vehicle sale is a very complicated process. Just like a real estate purchase a vehicle purchase takes professional representation in most cases. 

What people do want and deserve is a more professional sales experience which can only be provided by skilled and trained salespeople, not product specialists.

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Are you Ready to Sell?

Salespeople are typically an easy group to distract is a statement I debated about writing at all. The point of the post started out being that small things that you, as an owner or manager, never questioned were working with processes in place may be the reason you aren’t as successful as you want to be. 

That seems like a great place to start a post, especially after discovering that in our organization people that should be able to process credit cards can’t always because they don’t always have access to the terminal. Crazy, right? Wait, this is the crazy part and why I say salespeople are easily distracted. The way I discovered our logistical issue was by walking in and discovering a salesperson with a string tied to a broom handle trying to open the door to reach the credit card terminal. He had a sale and was not going to let a locked door stop him.

So when I say salespeople are easily distracted I say it to emphasize the importance of removing every obstacle between your people and the sale otherwise your sales team may spend there day with broom handles and strings. 

Culture Cultivation

Talk about corporate culture all you want, if the owner doesnt start the culture it doesnt start at all #trainingfor2020

I have a plan to write this entire blog one Linkedin post at a time.

I dont know the technical definition but in my mind the culture of a business equates to a body’s DNA because it is the core of what we are, with the exception that culture can be changed, but that change usually comes with casualties #trainingfor2020

We Make It Harder: Your Company’s New Motto

Everyone says it, regardless of the industry, “we make things harder then they have to be.” In the automotive industry we feel like the process should be simple: buy cars, get customers, sell cars. In the restaurant business we map out the process: buy food, prepare food, get customers, sell food. Every industry has basic goals that can be boiled down to simple statements. So why do we produce so many documents and flowcharts, why do we write so many mission statements and revised organizational plans? The answer is as simple as business should be: people are involved.

I visited a restaurant last weekend, the name of which includes the word wings, as in chicken wings. I was there for that reason, it was time to enjoy wings. Guess what the wing restaurant had run out of? Yep, no wings to be had. I am quite sure that when the founder of this restaurant started out his plan was simple: buy wings, cook wings, get customers, sell wings. Do you think that he ever thought that anyone that bought one of his franchises would need to be told not to run out of wings? No, and in reality the franchisee probably understood the concept but the store manager or assistant manager did not. That may not be accurate, they may have understood the concept but because they were dealing with the minute by minute problems that come up when managing anything they just forgot or miscalculated; hard to know why but the lesson is there for us all.

Never make the process harder than it has to be. When the business begins to add employees and grows there have to be processes created to ensure the necessary functions are done. A process is a clearly defined, measurable, repeatable and written guide on how to do something. Once a process is in place it has to become ingrained into the culture of the organization and every employee involved must know, understand and follow the process.

When an owner or manager of a company says in exasperation, “Why do we make this so hard?” the answer is usually because someone does not know or is not following the process (assuming there is a process). What happens next may determine the fate of the business because if the exasperated owner or manager simply makes the statement and does not take the necessary steps to teach and enforce the process that manager or owner has failed. Every failure creates complications and soon creates a culture that may never be fixed.

Business may not be quite as simple as buy wings, cook wings, get customers, sell wings but with simple processes strictly enforced it is possible to have a business that feels as simple as it should.

Coca-Cola Marketing

Coca-Cola is the greatest iconic brand that the world has ever known.  Coca-Cola has name recognition in every country and its products are sold worldwide under various kinds of political environments.  Although the coca-cola company is considered a success by most in recent years sales have flattened and the corporate culture has been characterized as being “dysfunctional” (Foust & Byrnes, 2004, p. 76).  There are several issues that continue to plague the corporate giant and that must be addressed before the company can increase growth that will match its past history including product lines, corporate culture, and marketing.

The Coca-Cola brand is successful which leads to the fact of why it is not able to sustain the explosive growth of profits and expansion that was enjoyed during the last century.  One of the issues that has been a factor in the leadership of Coca-Cola is the worry that any major changes that are made would spoil the overall success of the company.  The Board of Directors has many members that are not proponents of change and so this has been reflected in the choices and tenure of recent CEO’s.  In the years from 1998 to 2005 the board had “installed one CEO, ousted him, and installed another so inexperienced that he needed constant shoring up, and finally, after a very public search that found no outside takers, named a third—a retired Coke executive who had been passed over for the top job [before]” (Hess, 2010, n.p.).  Even those that were known for being able to make sweeping changes in parts of the Coca-Cola system seem to wilt when faced with the powerful Board of Directors. 

Former Chief Executive Officer, E. Neville Isdell, made his name with Coca-Cola by helping to expand into new markets in Asia, Africa, and Eastern Europe.  During his time with Coca-Cola previous to being named C.E.O., Isdell was known as someone that took gambles and was open to new products and mergers (Foust & Byrnes, 2004, p. 80).  Once Isdell was named C.E.O. and was faced with the reality of changing the culture and the board he became less of a vocal agent of change, being quoted as saying the way back to the growth of the previous decades is simply a perfection of the process, not a new process.

The turmoil in the corporate offices is a major roadblock to an effective marketing campaign.  When a plan is in place to market a new product or go after a new market there must be a commitment by the company to support the effort.  When an executive creates a new campaign or is targeting the launch of a new product the support of that campaign or product may erode if there is a change in management.  Strategies that have been laid out and executed may fall by the wayside during a change in management which can lead to a workforce that feels unsure of the direction the company is taking.

Coca-Cola faces a declining market for their core product as more people are seeking products that are viewed as healthier. The opportunity that Coca-Cola has before it is in the expanding market for water and fruit drinks.  Coca-Cola has seen this change on the horizon for many years as was seen in an article in 2006, where it was noted that, “In response to concerns about healthier lifestyle choices and seeing a drop in consumption of their colas, the major beverage giants-Coke and Pepsi-are quickly switching gears and products” (Harden & Fletcher, 2006, p. 18).  Coca-Cola also has opportunity for expansion into geographical areas that it has little or no market penetration.

Coca-Cola’s marketing strategy suffers from having great concepts that are introduced and then abandoned.  A product that has been advertised as a healthier cola product, Coca-Cola Zero, has battled through advertising changes that seem to take the product in different directions.  A visit to the website devoted to Coca-Cola Zero shows a very well designed, social media friendly site with content that has not been updated in three months.  The Coca-Cola Zero website is focused on a theme built around winter sports and sweaters even though it is the middle of summer.

Although the marketing surrounding Coca-Cola Zero has been inconsistent the product itself has been a sales success story for the company.  Although sales of carbonated soft drinks “fell 3% in 2013, according to Beverage Digest. That marks the ninth straight drop. Coca-Cola Enterprises, one of the world’s biggest bottlers of Coca-Cola products, has seen strength in Coke Zero and energy drinks. Sales of Coke Zero, which has no carbohydrates and no calories, grew by double digits in three of the past four quarters” (Demand Strong, 2014, n.p.).  The idea behind the product is to appeal to young male adults that feel diet products like Diet Coke are less masculine and so a product such as Coca-Cola Zero is a superior choice.

Coca-Cola has felt the necessity during the past two decades to consider creating new innovations and new advertising methods to attract new customers and retain old customers.  It has come to the point where new innovations will change the cola industry and become the basis for new advertising.  The idea of finding new ways to deliver customers a carbonated soda but with new “formulations could potentially serve as the basis for future advertising efforts for both companies, while providing shelter from health critics and politicians who blame soda for the nation’s obesity epidemic. The negative attention has hurt sales: Soda consumption continues to fall. Last year it declined 1.2%, which brought the category to 1996 levels, according to Beverage Digest” (Schultz, 2013, p.12).  The formulations have to have some natural basis in order for them to aid in the company attracting those that are looking for healthier drink alternatives.

Coca-Cola understands that in order to meet the demands of new consumers they must find ways to eliminate the things that are being used as a basis to reduce cola consumption.  Coca-Cola’s competitor, PepsiCo “is in the late stages of developing a “taste modifier” that would essentially fool taste buds into thinking they are getting more sugar than delivered. The ingredient, which is called “S617” and still requires regulatory approval, would theoretically allow for PepsiCo to lower the amount of sugar and high-fructose corn syrup in full-calorie beverages such as regular Pepsi, while keeping the same sweet cola taste. Coca-Cola, meanwhile, continues to experiment with steviol glycosides, which are the sweet, calorie-free extracts from South American stevia plants” (Schultz, 2013, p. 12).

During Coca-Cola’s search for an overall marketing identity they have turned to many different agencies and executives to provide direction.  One of the line of experienced executives that faced the fire of running the marketing side of Coca-Cola was Mary Minnick.  Minnick was appointed in March 2005 as Executive Vice President of Marketing, Strategy, and Innovation.  Minnick served at her post until February of 2007 when she left the company after being passed over for the position of Chief Operating Officer (Mary Minnick, 2007, n.p.).  When she came to power in 2005, Minnick was known for sending chills down the spines of the genteel company’s marketing ranks, challenging long-held convention at the Atlanta beverage giant and sending back to the drawing board agency work designed to revive the brand’s iconic status.  Her no-nonsense, risk-taking approach is already winning over investors. ‘Feathers need to be ruffled at Coca-Cola,’ said Bonnie Herzog, beverage analyst for Citigroup’s Smith Barney. ‘It has desperately needed shakeup for a very long time’ “(Macarthur, 2004, p. 34). Minnick was determined to steer Coca-Cola into a new creative direction and also to move towards the production and marketing of non carbonated beverages.

Minnick attempted to move the company in a direction that was not anywhere it had gone before.  She championed considering the reasons that people would buy Coca-Cola’s beverages instead of classifying them simply as cola and other types of drinks.  According to Minnick, if a company could anticipate the needs and desires of customers then that company would be the beverage company that would be the leader in the industry.  People want to consume beverages that satisfy thirst but also address issues like mental renewal and health and beauty (Cravens & Piercy, 2009, p. 567).  A company that understood those reasons could introduce products that addressed those needs without having to search for the right products.

Although there have been issue in the company, according to the reported financial statements of Coca-Cola the company still is profitable and growing.  From 2009 to 2013 the company actually increased their overall equity by eight billion dollars (Coca-Cola, 2014, n.p.).  There has been an increase in debt, however the overall ratios of the company seem strong.  The other major player in the beverage business, PepsiCo, Inc., has also experienced growth over the same period according to their financial reports.  PepsiCo has nearly doubled its overall assets over the period from 2009 to 2013 and has experienced profit and growth during that period (PepsiCo, 2014, n.p.).

Coca-Cola is one of the most successful brands and corporations in history.  There is no question that the strength of the brand will continue to support sales volume and will provide a basis for any future decisions to be made.  There are certain decisions that must be made by the company in order to continue the recent growth of the company.  Much like PepsiCo, Coca-Cola needs to understand the importance of diversification, simply relying on carbonated soda is not enough to ensure continued growth.  Developing new products that focus on less sugar and emphasize health benefits that can be used to attract new customers is absolutely necessary.  Finally, there must be a cohesive marketing plan that is agreed to by management and then completely carried out and only modified when absolutely necessary, not simply when there is a change in management. These issues must be addressed if Coca-Cola is to continue as the leader in the beverage industry and continue to experience growth and profits.

 

 

 

 

 

 

 

 

 

 

References

Coca-Cola Company. (2014) Mergent Online Database, Company Financials retrieved online http://www.mergentonline.com.proxy-library.ashford.edu/companyfinancials.php?compnumber=1832

Cravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). Boston: McGraw-Hill

Dean FoustWith Nanette Byrnes in New York and,bureau reports. (2004, Dec 20). Gone flat. Business Week, , 76-82. Retrieved from http://search.proquest.com/docview/236742695?accountid=32521

Demand strong for Coke Zero, energy drinks. (2014). NASDAQ.com. Retrieved online http://www.nasdaq.com/article/demand-strong-for-coke-zero-energy-drinks-cm343827#ixzz37V11YptV

Harden, A., & Fletcher, K. (2006, Winter). Bottled water: The industry, the marketing and the ruse awareness to action kit].Education Forum, 32, 17-19. Retrieved from http://search.proquest.com/docview/205036582?accountid=32521

Hess, Edward D. (2010). Columbia Business School Publishing : Smart Growth : Building an Enduring Business by Managing the Risks of Growth. New York, NY, USA: Columbia University Press. ProQuest ebrary. Web. 13 July 2014.

Macarthur, K. (2005). `Scary Mary’ chills Atlanta; Hard-hitting Minnick ready to shake things up. Are Coke and its agencies ready for change?. Advertising Age, (34).

Mary Minnick to leave Coke in March. (2007). Ad Age. Retrieved online http://adage.com/article/news/mary-minnick-leave-coke-march/114386/

PepsiCo, Inc. (2014) Mergent Online Database, Company Financials retrieved online http://www.mergentonline.com.proxy-library.ashford.edu/companyfinancials.php?compnumber=6581

Schultz, E. J. (2013). How PepsiCo and Coca-Cola are creating the cola of the future. Advertising Age, 84(42), 12.

Financial Ratio Analysis

Using financial ratios to view a company’s health is a useful tool used by investors and shareholders.  Taking information off of the company’s financial reports such as the balance sheet and income statement and comparing key numbers from those forms has been proven to be a good barometer of where the company is going and if the company would be a good investment.  It is important to realize however that while financial ratios are helpful they do have some possible shortcomings.

One ratio that many view as important when considering a company’s financial health is called the current ratio.  The current ratio is very simply the company’s current assets divided by the company’s current liabilities.  This simple ratio should be a good indicator of a company’s short term liquidity, however the effectiveness of this ratio is questioned because “current liabilities are never wholly discharged, and current assets are never entirely available to meet current maturing obligations by analogous reasoning” (Zeller, Stanko & Cleverly, 1997, p. 62-6).

Another failure of using ratios to calculate a company’s health is the complexity of calculating and interpreting the ratios.  Overanalyzing the data gained from ratios can cause a company or investors to delay action because there is simply too much data.  In one study of ratios it was found that in reality “the majority of the information in the original 28 ratios can be provided by six ratios” (Zeller, Stanko & Cleverly, 1997, p. 62-6).

One of the benefits of using ratios is it can often identify an issue in the company’s financial data and suggest a solution.  Years ago Home Depot was experiencing rapid growth and expansion and was suffering problems with cash flow due to the growth.  Ratio analysis indicated that the best way from the company to continue growing was to maintain the same sales amount per transaction and increase the number of transactions per store.  A marketing plan was devised to increase traffic in existing stores which helped the company (Financial ratio, 2003, p. 1-1).

Another benefit to using financial ratio analysis is that since it is an accepted practice when investors are comparing companies it can create a common ground for comparison.  Although there may be differences in markets and regions most financial ratios can be compared across several companies and a basis can be seen.

Financial ratio analysis helps home depot nail growth targets. (2003). IOMA’s Report on Financial Analysis, Planning & Reporting, 03(12), 1-1,11+. Retrieved from http://search.proquest.com/docview/203152343?accountid=32521

Zeller, T. L., Stanko, B. B., & Cleverly, W. O. (1997). A new perspective on hospital financial ratio analysis. Healthcare Financial Management, 51(11), 62-6. Retrieved from http://search.proquest.com/docview/196373520?accountid=32521

Advertising and Ethics

Open the website Yahoo.com and there are many types of advertisements that appear, some for car manufacturers, television shows, and prescription drugs. Today the first advertisement that displayed on Yahoo.com was for a drug called Vyvanse from a manufacturer called Shire, LLC. The advertisement states that Vyvanse helps control ADHD and shows a picture of a smiling young girl who is supposed to be a happy user of the drug. Is it possible that the drug is indeed a help for some people with ADHD but not for all? How many does it have to help in order for the manufacturer to be able to claim that it helps control ADHD? How does Shire advertise other medicines? A visit to http://www.shire.com shows more smiling happy people that are helped through many diseases by medications produced by Shire (Shire, 2013, n.p.).

Another advertisement that seems very similar but has been challenged is when Zales jewelry store advertised their diamonds as the most brilliant in the world. “Akron-based Sterling Jewelers Inc., a retailer that operates more than 1,300 stores under several brands that include Kay Jewelers and J.B. Robinson Jewelers, has sued rival Zale Corp., which operates about 1,870 stores under the Zales brand and others. Sterling says Zale’s claim that its Celebration Fire diamond is “the most brilliant diamond in the world” is false and misleading. “Fire diamonds are not the most brilliant in the world, and the research claimed to prove that Fire diamonds are the most brilliant in the world does not and cannot so prove,” Sterling alleges in the lawsuit, which was filed last Tuesday, Nov. 13, in U.S. District Court in Cleveland” (Park, 2012, p. 0003).

There is no way to react to advertising puffery or deceptive advertising since there is hardly an item that is advertised today that does not use one or the other kind of advertising. People do not react in any sort of way to advertising today. Most people see an advertisement for something and then check out reviews and comments online, so if there is some exaggeration in an advertisement but most people are still happy with the product or service that is OK, and if people are not happy with the product or service new customers will read the comments and reviews and not be duped. The discussion about ethics and advertising and how vulnerable consumers are reflects an outdated view of how consumers react to advertisements.

PARK, M. (2012). Sterling Jewelers goes to court over rival’s ‘most brilliant diamond’ claim. Crain’s Cleveland Business, 33(45), 0003.
Shire, llc. (2013). Retrieved online at: http://www.shire.com/shireplc/en/home

Ethics Training

Ethics is the study of ideal behavior.  Although there are many definitions of ethics many refer to the definition put forth by Will Durant, the historian and writer.  “Durant’s definition of ethics as the study of ideal conduct has meaning because it teaches that ethics has two elements. First, knowledge of ethics is not something with which we are born; it is acquired by study. Second, ethics is not common behavior, it is the ideal conduct we hope to find in the best of us” (Christensen, 1995, p. 32).  Ethics is not something that people are born with, ethics are learned.  Comparing cultures shows that while one culture may find an activity acceptable and ethical other societies may condemn the same behavior.  An organization that is concerned with ethical behavior by its members must teach what is an acceptable and ethical behavior.

Corporations must teach ethics to its employees.  The guidelines that the company sets in place must be made known to every employee and upheld.  It is a huge task to make sure the company is covering ethics in its training program.  Large organizations have to make a serious commitment to training, take for example the fact that in 2011, Accenture spent more than “370,000 hours of ethics and compliance training, and the company has a zero-tolerance policy for corruption or serious violations of its Code of Business Ethics” (“Ethics”, 2012, p. 74).  The training procedure for ethics should involve clear notice of what is considered ethical behavior along with examples of people acting appropriately as well as examples of employees not acting in an ethical manner.  The goal of the ethics training is to make sure employees know that if they act in an unethical manner there will be consequences.

Christensen, B. A. (1995). Ethics by definition. Journal of the American Society of CLU & ChFC, 49(5), 32. Retrieved from http://search.proquest.com/docview/209609074?accountid=32521

Ethics; accenture releases 2010-2011 corporate citizenship report. (2012). Information Technology Newsweekly, , 74. Retrieved from http://search.proquest.com/docview/993132242?accountid=32521

Cloud Computing: History and Future

Andrew McLaughlin, who heads public policy and government affairs for Google, described the use of cloud computing as “one of the most important transformations the federal government will go through in the next decade,” noting the cost advantages of cloud infrastructure (Miller, 2009).  Cloud computing is a concept that involves distributing computer power across remote computers and doing computations outside of the local area of a user.  Cloud computing is a concept that will revolutionize human interaction in both the world of computing as well as the normal interactions of people, industry and governments; the cost savings, ease of implementation, interactivity and overall mobility afforded users outweigh any possible drawbacks.  The fact that there is support across the computer industry and that there is new focus on Web 2.0, which encourages user interaction and ease of use will push cloud computing to the forefront of computer systems.

Cloud computing is a very popular term that describes several types of shared distributed or grid computing.  The book Tomorrow’s Technology and You describes “grid computing isn’t about sharing files; it’s about sharing processing power” (Beekman & Beekman, 2009, p. 306). In the early days of internet usage it was used as a connection between private networks.  It was common for the connected networks to be quite large networks run by institutions, schools, governments, and research centers.  Each network had network engineers that were responsible for the configuration and maintenance of the private network; which included creating graphical representations of the network.  Many network engineers of the day did not understand how to accurately depict the journey of a packet across the internet so it became common practice to use a cloud as the internet.  As the use of the cloud became accepted as a representation of an unknown network outside of the private network people were working with it came to be known as the cloud, or computing in the cloud, or cloud computing.  Cloud computing therefore can refer to any computing that occurs outside of a private local network.

 As more people became comfortable with the data changes that occur in the cloud there occurred a fundamental shift in the way people viewed the internet.  The internet was no longer just a connection between large institutional intranets but it became a direct connection between individuals.  Cloud computing now means that instead of data simply being transferred through the cloud data is being created and changed inside of the cloud.  This paradigm shift will serve as the basis of the next evolution of both computers and mankind it will create one of the most significant market opportunities since the explosive growth of the Internet itself. While writing about cloud computing James Urquhart stated in an article for CNET that “I’m not dealing in hyperbole here; I honestly believe that there is a clear evolutionary step to the cloud occurring well after stand-alone self-service clouds are mainstream (which they arguably are today) that will inspire massive innovation.” (Urquhart, 2008).

There are several differences between computing of the past and the way cloud computing is structured:

1.    Users of cloud computing generally do not have to own many of the hardware components required of conventional computing.

2.    Software in cloud computing resides in the clouds with shared programs not installed on users computers but maintained on central servers.

3.    Software in cloud computing is usually provided on a subscription basis with users paying a monthly fee instead of an larger one time fee.

4.    Resources in cloud computing are delivered over the web instead of being contained on local computers.

5.    Users of cloud computing interact with other users in two way conversations as opposed to traditional software which usually limited users to strict rules of one way interaction.

The benefits of cloud computing are wide reaching and are the reason that the shift to distributed computing ideologies such as cloud computing.  Cloud computing offers users a highly automated platform for software updates, always giving users the most up to date software.  Flexibility of access is another benefit of distributed cloud computing; allowing users to access files and data from different types of devices such as laptops, home computers and mobile devices.  Mobility is one of the greatest advantages of cloud computing services since services are not tied to a local network users can be in almost any situation and participate in the computing process.  Cloud computing also helps corporate and individual users reduce costs.  Computing in the clouds tends to be much more interactive for users as opposed to more traditional software.

There are many reasons that cloud computing has not become the defacto standard for all computing.  One issue that faces distributing computing is the question of how to enforce privacy guidelines on the remote service.  For many users the challenge of finding sufficient bandwidth to successfully implement computing in the clouds is a major hurdle.  Depending on the application and type of data being manipulated cloud computing can have performance issues such as lagging and lack of responsiveness.  A common issue raised regarding cloud computing that can be used as both a positive and a negative is that a local support team is not needed which can reduce overall cost but also means any repairs or programming must be outsourced.

Commercial implementation of cloud computing is being developed by most major computer companies such as International Business Machines, Intel, Sun Microsystems, Microsoft and others as shown in Figure 1.  The other players in the growth of cloud computing come from not only traditional software and operating software companies but also from hardware providers and companies that are new to the private computing market.  An investigation of the concepts being offered as well as those that are being planned in the future will show that cloud computing is the direction that personal, industrial, and governmental computing is being driven.

Figure 1 www.boston.com illustration of providers of cloud computing resources.

 

One of the most aggressive providers of cloud computing is salesforce.com which provides sales and contact management based entirely in the cloud.  Founded in 1999 by Marc Benioff who was formerly with Oracle Corporation, salesforce.com was created with a “vision to create an on-demand information management service that would replace traditional enterprise software technology. Benioff is regarded as the leader of what he has termed “The End of Software,” the now-proven belief that multitenant, cloud computing applications democratize information by delivering immediate benefits at reduced risks and costs” (Salesforce: Leadership, n.d.).  Salesforce.com helped popularize the concept of software as a service or SaaS.  Salesforce.com allows salespeople in multiple locations to access real time customer and product information allowing them to react instantly to changes.

Amazon is another player on the cloud computing field.  Calling their entry into the service EC2, which stands for Elastic Compute Cloud, Amazon offers scalable web services for companies.  Amazon’s EC2 website proclaims “Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable compute capacity in the cloud. It is designed to make web-scale computing easier for developers Amazon EC2 reduces the time required to obtain and boot new server instances to minutes, allowing you to quickly scale capacity, both up and down, as your computing requirements change by allowing you to pay only for capacity that you actually use” ( Amazon: products and services, n.d.).  Amazon also offers products for cloud storage that gives users scalable and elastic room for growth as needed.

Microsoft has been pushing the cloud computer market with its version of what it describe as “a flexible cloud–computing platform that lets you focus on solving business problems and addressing customer needs. No need to invest upfront on expensive infrastructure. Pay only for what you use, scale up when you need capacity and pull it back when you don’t” (Microsoft Windows Azure, n.d.).  The newest release of Microsoft’s cloud computing is called Azure.

Even companies that traditionally have provided hardware solutions are poised to enter the cloud computing arena.  For instance, Dell computers has recently announced that they will be providing cloud solutions. “ This web application platform as a service (PaaS) solution is designed to address the key issues around web application development and deployment: unpredictable traffic, the fear of under-provisioning and migration from development to production. The solution will combine Dell cloud-optimized servers and services with fully-integrated Web application cloud software from Joyent, a leader in cloud computing” (Dell Press Releases, 2010).  Dell is positioning itself to be the leader in cloud computing hardware solutions with its PowerEdge C servers that are optimized for Web 2.0, social networking, and gaming.

Apple has announced its newest plans for cloud computing based on its iWork program. The me.com site that Apple has been using in cooperation with iWork allows access to data, contacts and programs all based in the cloud. Although Apple is not launching a platform on its own they are focusing on the personal side of the cloud.  By enabling the new iPhone to use multiple applications and with the extensive applications available for the platform Apple will remain a dominant player in the personal cloud computing industry.

Is the change to cloud computing the future of the computing industry?  Information technology professionals were asked by survey takers at KPMG Netherlands if they though cloud computing was a technology that was here to stay or something that was simply being promoted by vested interests.  As figure 1 shows over fifty nine percent of those asked either agreed or strongly agreed that cloud computing was the way computing was going to evolve.  The importance of how users can interact with each other is driving companies to make the vision of cloud computing a reality (Hermans & Chung, 2010, p. 16).

Figure 2 KPMG survey of IT professionals regarding cloud computing being the future of IT.

 The concept of cloud computing is gaining popularity because of the failure of the current software and internet in connecting people with people and information.  Consider that most computer software in the early days of the internet was written in computer languages and by programmers used to communicate with large institutional networks.  Computers such as UNIVAC or any of the myriad of other first generation computers were not made to be personal or interactive. Figure 3 shows an image from the Computer Desktop Encyclopedia of one of the early computers and just from the numbers of switches, buttons, and gauges it is apparent that interactivity and simplicity was impossible to achieve at that time.  As computers and software have become more adaptable and interactive new ways of connecting were required, which is why cloud computing and Web 2.0 have become so important.


Figure 3 EDSAC computer.


One of the main forces that will continue to drive the move to computing in the clouds is the redefining of the internet and how users make use of web resources.  The new implementation of the web has been called Web 2.0.  Applications that make up the new web are interactive in nature; popular websites such as Facebook which allows users to receive constant interactive updates from other users and YouTube which encourages users to watch and comment on other users’ videos have exceeded the original intent of the programmers. There are many definitions of Web 2.0 however it can be summed up by saying “anyone can create an online publication, photo gallery, movie, music video, radio show, or video podcast” (Beekman & Beekman, 2009, p.242).

Cloud computing will use the advantages that Web 2.0 will provide which are the interaction of users and the contributions of not only programmers but also users that will reshape software.  Cloud computing will shift the power of computing from being centralized in institutional and governmental centers to all of the users of the internet.  Cloud computing is a concept that will revolutionize human interaction in both the world of computing as well as the normal interactions of people, industry and governments; the cost savings, ease of implementation, interactivity and overall mobility afforded users outweigh any possible drawbacks.  The fact that there is support across the computer industry and that there is new focus on Web 2.0, which encourages user interaction and ease of use will push cloud computing to the forefront of computer systems.  The future is going to belong to those that can adapt to the computing power of cloud computing.

References

Amazon: Products and services. (n.d.). Retrieved from http://aws.amazon.com/‌ec2/

Beekman, G., & Ben, B. (2009). Tomorrow’s technology and you (9th ed.). Upper Saddle River, New Jersey: Pearson Education.

Company leadership. (n.d.). Salesforce: Leadership. Retrieved June 22, 2010, from http://www.salesforce.comhttp://www.salesforce.com/‌company/‌leadership/‌executive-team/‌#benioff

Dell press releases. (2010, March 24). Retrieved June 28, 2010, from http://content.dell.com/‌us/‌en/‌corp/‌d/‌press-releases/‌2010-3-24-cloudedge-launch.aspx

Hermans, J., & Chung, M. (Eds.). (2010). KPMG From Hype to Future 2010 Cloud Computer Survey.

Microsoft windows azure. (n.d.). Retrieved June 28, 2010, from http://www.microsoft.com/‌windowsazure/

Miller, R. (2009, January 20). Obama tech team envisions federal cloud [Tech article]. Retrieved June 20, 2010, from http://www.datacenterknowledge.com/‌archives/‌2009/‌01/‌20/‌obama-tech-team-envisions-federal-cloud/

Urquhart, J. (2008, December 22). The great paradigm shift of cloud computing is not self-service… In CNET news. Retrieved June 22, 2010, from http://news.cnet.com/‌8301-19413_3-10127654-240.html

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