The cloud computing will be the buzzword in 2012 as it would spread to mobile devices, mobile advertising, and wireless equipment.
Apple has already launched its iCloud service and would be followed by other rivals. In other words, the cloud could be the new operating system.
Following are Jefferies top 10 cloud computing predictions and implications:
Any platform without integrated cloud services will be commoditized
In order to be a platform, an OS will need to have a cloud directly tied into it. This means that firms that do not have a cloud strategy will invariably be faced with longer term differentiation and ultimately margin issues as a non-differentiated platform will face commoditization pressures.
Deluge of cloud functions, apps, and content will require a simple user interface
Much of the value of the cloud will be lost if it is not easy to navigate. The brokerage believes usability will be a deciding differentiator and as important as the list of available functions.
Future applications will automatically optimize based on platform, device, location, and usage habits
Apps will need to be written and architected to support auto-recognition and auto-optimization features. Especially in a mobile context, the ability to intelligently turn features on and off while optimizing for screen or use case will be critical.
Devices will become more mobile and more powerful
In contrast to visions of weakly-powered thin clients with the heavy processing power in the cloud, Jefferies believe that user interface and offline capabilities will require mobile devices to contain a significant amount of processing power. The brokerage sees the main usage and value add for the cloud will be mobile.
Content library will be very important, especially early on
Jefferies believe that at this early stage pulling together the largest and/or most diversified library will be a key means by which platform competitors hope to build critical mass.
Developers will be critical
Having apps natively built for platforms, with releases either exclusive or staged could be a major differentiator. Platform builders like Apple will not be able to think of all the potential new possibilities and will need to open up their cloud platform by providing a cloud SDK (software developer kit).
Fragmentation will be a major risk
The brokerage expects 3-4 major ecosystems, but increased fragmentation of OS versions will lead to a poorer user experience, unhappy developers, and advantages for the vertically integrated platforms.
Mobile advertising will be one of the revenue pillars
Advertisements that add value for the consumer and that reach a critical mass of people (especially via TV/video) will both be required for the ecosystem to prevail. A 24/7, 360 degree perspective should enable better ad tailoring. In addition to Google-Admob and Apple-Quattro, the brokerage sees mobile marketer Velti as a key beneficiary of this trend.
Proprietary survey: spectrum, towers, and backhaul are the main network bottlenecks
Jefferies believe beneficiaries will include microwave backhaul suppliers Dragonwave and Ceragon Networks, DPI vendor Allot, app delivery controller vendor F5, WAN optimization vendor Riverbed, Juniper/Cisco, and semiconductor companies Avago, Broadcom, Inphi, PMC-Sierra, and Lattice.
Carriers will shoulder the bandwidth burden with some benefit
To the extent cloud-based offerings require more bandwidth, the carriers could benefit depending on actual customer usage patterns. While carriers have talked of their own cloud-based services (as with apps), they will likely be relegated to the role of delivery vehicle.