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90% of Internet Users Now Use Cloud-Based Apps

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Perhaps 3.6 billion global consumers now use cloud computing, in the form of the apps and sites they use regularly. If there are a total four billion internet users globally, that suggests 90 percent of world internet users use cloud-based  applications and services.
That has obvious implications for the computing industry.
source: wearesocial
In 2017, Amazon Web Services generated about $18 billion of revenue for Amazon. Microsoft, which includes its cloud apps in its cloud revenue segment, booked perhaps $27.4 billion in cloud revenue.
From 2016 to 2017, AWS revenues grew 42 percent from $12 billion to $17 billion, while Microsoft's cloud revenue contributions grew about nine percent.
Looking just at customers of cloud computing services (and not including applications), AWS has perhaps 34 percent installed base; Google 20 percent; IBM 15 percent; Microsoft about 15 percent. source:Credit Suisse
In 2017, enterprises spent about as much on cloud infrastructure services as they did bu…

"Winning" is Not What It Used to Be

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What does “winning” look like for telco internet access? In the monopoly era, this was no question at all. In the competitive era, maximum feasible market share is something else, entirely.
And that underpins nearly all business models. In the monopoly era, a network could be built on the safe assumption that upwards of 95 percent of locations passed would generate revenue.
In the competitive era, it is doubtful whether maximum possible success ever leads to market share more than 45 percent. In other words, no matter how good a service provider is, or how powerful its value proposition, more than half of all locations will not generate any revenue.
Rough implication: the cost of building a network, “per customer,” doubles.
source: Speeda

In Singapore, SingTel, the leader, had 44 percent market share in 2014. source: Alpha Economics
In Nigeria, MTN, the market share leader in 2017, had 39 percent share.
source: Pulse The clear implication is that no service provider, anymore, can build a …

What Does "Winning" Look Like for Telco Fixed Internet Access?

What does “winning” look like for telco internet access? Many tier-one U.S. telcos, for example, have about 40 percent market share. Is that winning? It depends on one’s perspective.
Share of 40 percent means one thing if share previously was 35 percent. It means something else if share formerly was 50 percent.
Many independent telcos other than AT&T and Verizon have been losing market share to cable operators for some years, and might well have less than 40 percent share. Cincinnati Bell seems to have been in that category, and seems to find that its fiber to premises program is allowing it to regain market share.
“Our results demonstrate that we continue to compete and win against cable with fiber,” said Leigh Fox, Cincinnati Bell CEO. The caveat is that Charter Communications has not yet launched its DOCSIS 3.1 gigabit service in Cincinnati. That will be the test of whether Cincinnati Bell can continue taking share from Charter.
“Competing” in this case means having 40 percent m…

Will Mobile Users Still Rely on Wi-Fi in the Future?

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You might not be surprised to learn that U.S. Android users consume most of their mobile data using Wi-Fi. But you might be surprised that customers on unlimited usage plans also rely mostly on Wi-Fi for data access. But that is what happened in January 2018, according to Strategy Analytics.
Android customers buying unlimited usage plans consumed only about 28 percent of total mobile device data using the mobile network, 72 percent on Wi-Fi.
That seems counterintuitive, if most users also are on 4G networks offering performance often better than Wi-Fi  (especially on public hotspots). In fact, behavior should already be changing.
“Customers are rational,” says Craig Moffett, MoffettNathanson analyst. “When pricing incentives favor Wi-Fi, customers use more Wi-Fi. When pricing incentives shift, so does behavior.”
In fact, some studies suggest that nearly 40 percent of U.S. “at home” access uses the mobile internet, not a fixed connection. In part, that might be because most internet ses…

Look to Google, Apple for Emergency Location Innovation

Here are two examples of innovation in the telecom industry that come from “outside” the industry. First, Amazon’s Alexa and the line of Amazon voice appliances has created a new platform for consumer voice. Basically, Alexa is becoming a voice-activated “home phone.”
The other example is emergency calling, where it is Google that is innovating in location services. In recent tests, Google tested emergency call location at 911 call centers with West Corp. and RapidSOS.
RapidSOS said its portion of the trial involved about 50 911 centers covering some 2.4 million people in Texas, Tennessee and Florida.
Location data in more than 80 percent of the 911 calls using Google’s technology were more accurate than the carrier data in the first 30 seconds of a call, according to RapidSOS.
Google’s data provided an average location estimate radius of 121 feet, RapidSOS said, while carrier data averaged 522 feet. Carrier data also took longer to reach 911 centers, RapidSOS said.
Google has said it h…

Is Telecom Like Airlines, or Autos?

Analogies sometimes are helpful when trying to understand the underlying dynamics of the “telecom” industry. In past centuries, telecom might reasonably have been likened to roads, pipelines, electrical or water utilities. They were considered “natural monopolies” not amenable to competition, with state ownership quite common.
In the competitive era, beginning nascently about 1985, new analogies were more apt. Some have likened competitive telecom to the airline industry . Both were highly regulated in the past, were then deregulated, are capital intensive, subject to scale economics, with global and local business models.
Both industries now rely on multiple revenue streams, where in the past revenue was generated only from customers buying tickets or making phone calls. Airlines now generate revenue by selling miles to affinity and reward program providers, while telcos are moving into advertising-- where business partners, not subscribers--are the revenue model.
Consultant Martin G…

Are Happy Customers Really Loyal? Are Loyal Customers More Profitable?

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Loyal customers are “good” because they do not churn, conventional wisdom suggests. There are other ideas we tend to take for granted: Satisfied customers are loyal; customers who give a firm high “net promoter scores” are satisfied and loyal; loyal customers have longer “customer relationship lifetimes;” and are “more profitable.”
Sometimes those assertions are correct; often not. Customer satisfaction might not translate into customer loyalty, defined as unwillingness to desert a current provider for another supplier.
“What we’ve found is that the relationship between loyalty and profitability is much weaker—and subtler—than the proponents of loyalty programs claim,” say Werner Reinartz, Professor of Marketing at the University of Cologne, and V. Kumar,  executive director of the Center for Excellence in Brand and Customer Management at Georgia State University’s J. Mack Robinson College of Business.
source: Harvard Business Review
“Specifically, we discovered little or no evidence to…