The IT world is aflutter with discussions about cloud computing.  This amorphous concept has become the IT buzzword of the year.  But cloud computing should not be the domain of the geeks.  In fact, cloud computing should really be exciting marketing departments and product designers.   It has the power to change how organizations conduct marketing and how they design products.  What is Cloud Computing in Marketing Terms?

According to Wikipedia, Cloud computing “is the provision of dynamically scalable and often virtualized resources as a service over the Internet on a utility basis.”  In layman’s terms, this means that a whole bunch of applications are becoming available as services on the internet.  You can access them as an application (think salesforce.com) or better yet as an API where you can build the interface and use the service.

A few examples:
Varian, a manufacturer of electronic measurement devices, decided to forgo the annual industry conference and instead create an immersive web experience entitled The Varian Experience.   This is just the type of web application that IT departments hate.  Unpredictable volume with high spikes that needs to be deployed globally and immediately.  This is why so many of these applications end up on underpowered agency servers.  But instead, we hosted the application on Amazon’s EC2 cloud.  For a fee starting at $50 a month, we got more stability and scalability than most Fortune 500 web sites today.  Check out The Varian Experience later this month.

Nystrom, the industry leader in classroom maps, knew that they needed an electronic map offering to compete in the digital age.  The first reaction was to create their own mapping interface.  But after assessing the time and effort to create even a basic offering, we looked for a better way.  We ended up creating a application that sits on top of Google Earth utilizing their open API.  We use Google Earth for basic mapping functions and we have created an overlay application which displays Nystrom’s educational maps and content.  We brought the product to market in less than 6 months and Nystrom now focuses on content creation versus basic mapping.  Check out StrataLogica.

When Tesla Motors reinvented the automobile with the world’s first commercial electric car, they wanted to do more than just reinvent the engine and drive train.  They wanted to change how cars are conceived, designed and built.  Franz von Holzhausen, famed designer from VW, GM and Mazda has an ambitious vision to recreate the in-car experience as well.  In the Model S, Tesla’s breakthrough sedan, there are two LED screens where the instrument panel and center console are in most cars.  The center console itself is a 17-inch multi-touch display.  Sitting in the car, you immediately get the sense of how these screens define your experience, and that is exactly what Franz intends.  Whereas electronics in today’s automobiles are proprietary and out of date before they even leave the showroom, the Tesla experience will be constantly updated, heavily leveraging the cloud, and will be completely personalized.  To take one example,  in the current prototype we were able to add GPS navigation leveraging a $40 USB drive and Google maps.  We had the working application up in less than a week.  Ditto for internet radio.  Ditto again for HD radio.  Try that on your BMW iDrive.  Franz can redefine your driving experience constantly and by doing so keep the Tesla brand fresh in the eyes of its customers.  Check out the Tesla Model S .

If you are a marketer or a product designer, you should really consider how the cloud can help to accelerate, change or even redefine what you are trying to do.  And do it quick.  The IT community is already starting the backlash against the cloud.  In a recent Gartner conference, the IT dialogue has moved from the possibilities of the cloud to the risks.  Many of the risks are real but all are manageable but talk of risks will carry the day if marketers and products designers aren’t more imaginative in how they use the cloud to advance their causes.

Even the most basic marketing textbook espouses the importance of being the first to market with new concepts, but most of these books were not written in the internet age. The internet has an incredible amplifying effect on being first. Jim Lecinski, Managing Director at Google, gives a great presentation on speed to market in the internet age. Without stealing Jim’s thunder, ponder two facts:

• YouTube and Facebook went from zero to millions of users in 18 months

• Betty Crocker launches its recipe of the day in June of 2007. Kraft launches a much nicer recipe of the day in December of the same year. Betty Crocker has 10x the number of users

For Roundarch, we have seen this front and center with our development of the iPhone application for Avis. A year ago we were discussing an iPhone application with Avis, but they were coming off of an expensive redesign of Avis.com and looking into the teeth of a nasty recession. But in the end, we both felt it had to be done.

The application has been a success in terms of incremental reservations, but its largest benefit may end up being the free advertising it has garnered Avis from Apple. In a single week, the application was featured in full page ads in the New York Times, Time, Newsweek and National Geographic Traveler. We are trying to calculate the dollar benefit of the brand impressions generated from this exposure, but we don’t need the calculations to know that being first has yielded huge benefits.

But even with all this success, being first is not without risks.  The ratings on iTunes for the application are relatively low. Most of the low ratings are due to complaints that the application does not have all the functionality the user would like. We are working on expanding the application, but would we have been as successful if we had waited until we had 100% of the desired functionality? I don’t think so. Working in the digital age means that you have to move quickly and take more risk than in the past.

These are certainly interesting times. And if you make a living driving innovative web projects like Roundarch, then things just got a whole lot tougher. In the past week, three of my most senior clients cited the Sequoia presentation as an indication of their bearish outlook for the future. Everyone seems to be preparing for the nuclear winter which in many companies will include spending and hiring freezes, layoffs, and a tendency to play it safe rather than make bold strategic moves. At Roundarch, we have believed for quite some time in the transformational nature of rich internet applications, and our clients who have deployed them across the enterprise have achieved outsized gains vis a vis their competitors. Is it still possible to create competitive differentiation using rich internet applications in these difficult times? We think so. Two quick facts: the iPod was launched shortly after 9/11 and Fortune Magazine was launched in 1932. We believe that turbulent economic times are the perfect time to launch transformational technologies. Several of our clients are using this time to build rich applications that should revolutionize their marketplaces. But even if you can’t convince your management to make bold moves, there are many ways to keep innovating using the rich internet as a tool of differentiation. Uris and I are looking forward to discussing how AVIS, A&E, Motorola and others are doing just that in our talk on Tuesday (Nov. 18, 9:00 am – 10:00 am). For example, AVIS and Roundarch have created transactional banner ads (in Adobe Flex) that allow AVIS customers to complete a full reservation without even visiting AVIS.com. This innovation completely changes the traditional strategy of pushing everyone to your URL. They also have a full page version that they are deploying on affiliate sites. In both cases, AVIS is using rich technologies to completely challenge the status quo and doing it without breaking the bank.

The title of the talk is “Building Successful RIAs for the Enterprise in a Climate of Financial Uncertainty.” It is a mouthful. Perhaps a better title should have been “Thrive vs. Survive” which is core to our message. We strongly believe that those companies that use this economic downturn to push even more innovation will take significant share from those who just try to survive.

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