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Cloud Call Centers: Big Businesses Play Catch Up with Small Businesses

Rocky — Sat, 05 Jun 2010 20:04:57 +0000

When I was in eighth grade, I played point guard on the girls’ basketball team. During one of our games, an opponent’s Mom was sitting next to my Mom. I was the shortest player on the court, and the other Mom’s daughter was the tallest. At one point in the game, I stole the ball and starting weaving through the players towards our basket. The other Mom exclaimed, “You know, your daughter (me) really has an advantage, because she’s so short that she can just run past the players without them being able to catch her.” What a boost of confidence! I had always thought that height advantage worked the opposite way!

TMCnet’s article, Cloud-Based Call Center Solutions: ‘Not Just For the Little Guys’, drives home the same point when it comes to cloud-based call centers. The article expands on a recent study by DMG Consulting, which dispels the misconception that cloud-based systems are geared towards smaller businesses with smaller call centers.

Patrick Barnard says it best, in the end of his TMCnet article:

There is some irony in the fact that, when it comes to cloud-based call center solutions, larger organizations are now ‘catching up’ with smaller organizations which have been using cloud-based applications for years. It used to be the case that larger organizations always had the more expensive ‘Cadillac’ versions of the software running on-premises — and the smaller companies always dreamed of having access to those advanced features and capabilities, but simply couldn’t afford it. But smaller companies have been rapidly migrating to cloud-based solutions for the past two years now – due to the fact that they are so fast and affordable to deploy – while larger businesses have largely ignored the many advantages the cloud-model can bring to their organizations. Now, that is starting to change.

Smaller call centers first adopted virtual call centers as a way to compete with larger call centers. Small businesses implemented hosted IVR to give themselves a big business voice. Now the big businesses are starting to play catch up with the smaller ones, by realizing the advantages of cloud call centers.

In the recent stresses of our economic times, one can see a similar pattern emerge with regard to marketing in general. Smaller businesses started adopting DIY (Do-it-yourself) marketing campaigns, WOM, social media marketing and more low cost marketing strategies in an effort to maximize their reach within a tight budget, but now larger businesses are starting to follow suit.

Is the concept of “height advantage” now leveling out in the world of marketing and advertising?

Do Cloud Solutions Always Pay? A Mathematical View

Rocky — Mon, 25 Jan 2010 18:45:58 +0000

Yesterday morning I looked at the weather channel in dismay when I saw the image of rainy clouds throughout the day. But when I glanced below at the numbers, which predicted a 30% chance of precipitation, I breathed a sigh of relief. An hour later I arrived at my destination, stepped outside my car, and began to enjoy the sunny clear skies.

My personal experience reinforced, once again, a core value in business. While theory, vision, and strategy are important, you need to be able to back up strategies and decisions with real numbers.

The availability of pay-per-use business solutions appeals to this need to make decisions based on financials. If the cost of a pay-per-use solution not only decreases upfront costs, but even saves money in the long-run, then for many SMBs the decision of adoption follows naturally. However, despite my realization of the simple financial attraction of on-demand payments, I did not understand the nuances involved until I read CloudTweak’s “Mathematical Proof of the Inevitability of Cloud Computing.”

Even if you do not want to read through the entire mathematical proof, the following key points can be enlightening in your next evaluation of when to adopt a cloud solution, whether it be cloud computing or cloud telephony.

The following statement reflects my understanding prior to reading the article.

To jump right to the punchline(s), a pay-per-use solution obviously makes sense if the unit cost of cloud services is lower than dedicated, owned capacity. And, in many cases, clouds provide this cost advantage.

Idea #1: Consider the peak-to-average ratio of the demand curve.

Counterintuitively, though, a pure cloud solution also makes sense even if its unit cost is higher, as long as the peak-to-average ratio of the demand curve is higher than the cost differential between on-demand and dedicated capacity. In other words, even if cloud services cost, say, twice as much, a pure cloud solution makes sense for those demand curves where the peak-to-average ratio is two-to-one or higher. This is very often the case across a variety of industries. The reason for this is that the fixed capacity dedicated solution must be built to peak, whereas the cost of the on-demand pay-per-use solution is proportional to the average.

Idea #2: Consider the length of the peak’s duration.

Also important and not obvious, leveraging pay-per-use pricing, either in a wholly on-demand solution or a hybrid with dedicated capacity turns out to make sense any time there is a peak of “short enough” duration. Specifically, if the percentage of time spent at peak is less than the inverse of the utility premium, using a cloud or other pay-per-use utility for at least part of the solution makes sense. For example, even if the cost of cloud services were, say, four times as much as owned capacity, they still make sense as part of the solution if peak demand only occurs one-quarter of the time or less.

For readers with a real mathematical mind, you will love reading CloudTweak’s entire article.

Image: Michelle Meiklejohn / FreeDigitalPhotos.net

Cloud Services – Framing the Question of Trust

Rocky — Mon, 25 Jan 2010 10:05:48 +0000

Trust plays a central role in a company’s willingness to migrate services to the cloud – despite the cloud’s financial benefits. The traditional question usually expresses the tension as follows: how much control is your company relinquishing by allowing a service to manage your most valuable information in hosted data centers, as opposed to in hardware or servers on premise? But Josh Bernoff takes a new angle on this issue in Groundswell’s marketing blog.

Bernoff begins by extending the question of cloud services to a broader application. For example, in one’s personal household management, the acceptance of eliminating paper bills in favor of the more eco-friendly online payments is widespread. In fact, Bernoff brings in this case to demonstrate the advantage of billing online over housing all of one’s paperwork in file cabinets. Whereas all of his online bills are easily available on citibank’s website, the paper bills are much harder to keep track of. And, despite Bernoff’s trust that citi was keeping careful records of his paper bills as well, this in fact was not the case beyond a six month history. Bernoff’s example drives home the point for me, albeit a little too convincingly for my own confidence, but I would imagine that in this instance I am not alone among household managers.

The blog’s last point repositions the responsibility of trustworthiness on the companies providing the Internet based services. If cloud services want businesses to migrate their services to the cloud, then they must back up the offers with completely trustworthy options.

Google has taken this call to action pretty seriously. In an article on eweek.com on Dec. 30, 2009, Google’s VP of Product Management, Bradley Horowitz, comments on the steps that Google Voice is taking in their efforts to cultivate user trust, and business users in particular. The steps include “unveiling the Data Liberation Front to let users export the data created within users’ Google Apps to apps outside Google’s purview” and having “launched the Google Dashboard to let users see exactly how much data they were creating within Google to host.”

A cnet Q&A with Eric Schmidt, Google’s CEO, from the end of Oct. 2009, also sheds an interesting perspective on this discussion:

You are big advocates of cloud computing. I’ve run into a lot of skepticism here at the show chiefly because of trust issues. What do you need to do to make your cloud-based services trustworthy enough and secure enough that a lot of big businesses will embrace them?
Schmidt: There are some businesses that will never embrace them. For purposes of argument that will be 1 percent. They’ll conclude they want absolute control and are willing to pay a premium for that. What is that? Their own data centers, their own security architecture, their own risk management, and so forth. The vast majority, for purposes of argument 99 percent, will conclude that the analogy about the ATM machine is correct. Eventually the convenience of using ATM machines and the bank outweighs carrying the money around with you. Initially you think, “How do I trust the bank?” You work out the problems and (eventually) people have enough experience to know even if there is a problem it will be fixed.

In our case, the uptime of our servers and services appears to be higher than that of corporate services. When you study the reliability, we’re trying to get to four nines (99.99 percent availability). Most corporate IT departments are not at that level.

Josh Bernoff and Eric Schmidt are really saying the same thing. When framing the question of reliability in cloud computing, cloud telephony, or any cloud service for that matter, the dilemma should not solely describe a tradeoff between cost/speed/accessibility and trust. The tradeoff is also between the trust of two different parties. Does the on-premise hosting of a service or application really provide more trust than a cloud based alternative?

[Image: FreeDigitalPhotos.net]