Google Archives

Aug 27

How Google is Driving Mobile Video Market Growth

Google’s top advertising customers are pushing for convergence of mobile and video quickly, which is turning into a strong catalyst of growth of the global mobile video market. With their largest advertising customers wanting greater flexibility in bringing video to mobile devices, Google will make significant strides this year to make that happen.

During their latest earnings call, Google execs said that Android, Chrome and YouTube are the highest priority areas of their business. I’ve been following the last year of earnings calls closely, and it’s clear that Google’s largest advertising customers are pushing the company to bring video to mobile at a level of performance and usability not accomplished yet. The Q2, 2012 earnings call transcript makes this point clear which can be accessed here Google’s Management Discusses Q2 2012 Results – Earnings Call Transcript.

Mobile and Video: Transforming Convergence Into Cash

Over the last year, Google executives have mentioned the growth of YouTube and its quick evolution from a content management system to a profitable advertising platform. During the Q1, 2012 earnings call held on April 12, 2012 the following points were made:

Google reported they had over 800 million monthly users uploading over an hour of video per second

U.K. mobile operator O2 used YouTube as the foundation of a brand launch that year with support for 100 new original channels completed and launched

Global product launch plans from GM, Toyota and Unilever and several other large advertising accounts are also underway

During the Q2, 2012 earnings call, Nikesh Arora, Senior Vice President and Chief Business Officer started his comments regarding the YouTube business with the statement “I think in 2007 it was when newspapers frequently said YouTube is groping for an effective business model. I think we can declare we found our model.” Immediately after making this statement, Mr. Arora mentioned that yearly account signups have doubled year-over-year and users are uploading over 72 hours of video every minute. He also mentioned that “thousands of partners are making six figures and we’re proud to work with major record labels in Hollywood studios on this platform.”

The call continued with the points made of Danish advertisers shifting their television advertising dollars to YouTube and other Google branding solutions. Additional companies mentioned on the call using YouTube-based advertising include Denon, Shire, and Intel. Clearly these companies have major product introductions coming up and see mobile video as perfect for reaching more potential customers than ever before.

Google’s Challenge: Keep Content Quality and User Experience Constantly Improving

If Google is going to attain the full revenue potential of YouTube as an advertising platform, they’ll need to focus on the following factors:

Create Application Programmer Interfaces (APIs) and easy-to-use programming tools for quickly creating mobile-optimized sites. As Gartner studies have shown, video on telephones is most often used as a time-filler, with a median length of 2 minutes, 46 seconds.

YouTube will need to support more optimized mobile-based video browsers that can support contextual search. This will be a core requirement for the enterprise, specifically in the areas of mobile customer care, mobile commerce and mobile health.

More extensive analytics in YouTube than are available today, specifically tying into to major marketing strategies including product introductions. It is becoming common knowledge that videos improve viewer engagement and prospects attribute a more positive shopping experience when they are used. Luxury brands are investing heavily in this technology including BMW, Burberry, Channel, Louis Vuitton and many others.

A Google/Ipsos OTX MediaCT smartphone users study completed in April, 2011 shows that 77% of smartphone users said that their most visited site was a mobile search engine.

Mobile Video: The Market YouTube Built

The size of the worldwide mobile video market was comprised of 429 million mobile video users in 2011, projected to grow exponentially to 2.4 billion users by 2016. Smartphones and tablet sales will contribute 440 million new mobile video users during the forecast period. These market estimates are from the recently published Gartner report, Market Trends: Worldwide, the State of Mobile Video, 2012.

Additional take-aways from this report include the following:

Allot Communication’s reports that mobile streaming grew 93% in the first half of 2011; Allot also reports that the usage of YouTube’s mobile channel grew by 152% and YouTube generated 22% of all mobile video traffic in the first half of 2011. YouTube reports getting 400 million video views a month globally.

Gartner reports from a survey completed in the 4^th quarter of 2010 that 32% of mobile enterprise users watch short videos from YouTube and other sites optimized for video streaming.

The fastest growth for mobile video will be in Latin America as smartphone adoption continues to accelerate, replacing traditional cell phones in these markets. Asia/Pacific will have the highest number of mobile video users at 541 million by 2016. Both of these markets will benefit from low-cost smartphones being produced by contract manufacturers who are becoming the dominant production strategy of brand leaders globally. The following graphic shows the Mobile Video User Forecast by Region, Worldwide, 2008 – 2016.

By 2016, close to 60% of professionally developed mobile video content will be delivered via mobile-optimized websites that also have enhanced contextual search functionality included in the content management systems.

Mobile customer care, mobile commerce and mobile health will be the three primary industry drivers in the near-term of mobile video market, emerging as growth catalysts of this emerging market.

Cisco’s Visual Networking Index study reports that last year, mobile video accounted for 56% of all mobile data traffic.

3G/4G connections are emerging as a powerful catalyst of mobile video growth. Gartner is forecasting that the worldwide share of mobile video connections on 3G/4G will increase from 18% in 2011 to 43% in 2015. In more established markets incouding North America and Western Europe, the percentage of 3G/4G connections is expected to be as high as 80% and 96% respectively.

Gartner projects that 70% of mobile video users will use only Wi-Fi to view mobile video, with the remainder of the market relying on a mix of cellular and Wi-Fi networks to gain access and also upload content. The following figure shows the Mobile Video User Forecast by Network Type, Worldwide, 2008 – 2016.

Source: Market Trends: Worldwide, the State of Mobile Video, 2012. Gartner Group. Published: 10 February 2012 ID:G00223693 Author: Shalini Verma. Link: http://www.gartner.com/id=1920315

Jun 12

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Gartner Search Analytics Shows Spike in Platform as a Service (PaaS) Inquiries in 2011

Trends of search terms from user accounts and topics of their inquiries form the catalyst of research agendas in many IT advisory firms. At Gartner these two factors and others like them are commonly regarded as leading indicators of future IT spending.

Gartner has been delivering short analyses of these subject areas to clients in the form of reports, with the latest being Search Analytics Trends: Platform as a Service published on June 9, 2011. This report covers user search activity from April, 2009 to March, 2011. For purposes of the report, Platform-as-a-Service (PaaS) is defined as cloud application infrastructure services delivered as a service. Gartner makes the point that PaaS includes no traditional software license and is expensed on a metered or utility basis. Presented below is the time series of searches by month from the report.

A few key take-aways emerge from the report, and they are presented below:

Cloud Middleware Services including Platform-as-a-Service (PaaS) are still unknown to many Gartner IT user clients. As a result this area is seen with skepticism by many of their clients. In studies of PaaS adoption from other analysts at Gartner and Forrester, it is evident that internal software development will make or break the credibility of PaaS initiatives for the long-term.

When Gartner IT users search for PaaS on the website and throughout online research, the four most common secondary terms are IaaS and SaaS (7.05%), Magic Quadrant (6.12%) and cloud (5.72%). Clearly Gartner IT user clients are looking to define their own technology stack in this area and looking for a framework of reference of where PaaS fits into their own IT plans and architectures. The competitive intensity across the analyst community will most likely go up as a result of the uncertainty many IT buyers have over PaaS.

The top three vendors that Gartner IT users search for are Microsoft (18%), Amazon (13%) and Tata (11%). Additional vendors include IBM (11%), Salesforce.com (11%), SAP (7%), Google and Oracle (4%).

Bottom line: The key to PaaS adoption in larger enterprises, many of which are IT user clients of Gartner, is how successfully Independent Software Vendors (ISVs) clarify their value proposition and how their apps add value to the platform layer.

Dec 14

IDC’s 2011 Predictions for the Cloud

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Frank Gens, Senior Vice President & Chief Analyst for IDC, shares insights from his firm’s predictions for 2011 and beyond in the areas of cloud computing, Platform-as-a-Service (PaaS), public and private cloud services.

Here are a few of the many take-aways in this 5 minute video:

Public cloud services adoption will grow at over five times the rate of the IT industry to $29B in 2011, up 30% from 2010 reaching $55B by 2014. E-mail and collaboration will be the foundation, and entirely new application segments will drive incremental growth.

Private cloud services will grow to $13B in 2011, growing much faster than public cloud. IDC predicts that Salesforce.com and Google will partner with infrastructure providers to create private cloud appliances of their public cloud offerings.

15% of industry revenue and 30% of industry growth will be from public and private cloud services in 2011.

Cloud management systems and solutions will embrace public and private clouds and will see Accenture, Cisco, CA, IBM, Microsoft, Oracle and others enter this market with enterprise-ready solutions in the next year.

On-premise applications will go through a transformation of supporting private cloud integration, providing enterprise accounts with the option of migrating to the cloud if they choose to.

The term “cloud computing” as a buzzword will be gone by 2012, as these technologies are expected to become ubiquitous.

May 5

An Overview of Microsoft’s Azure Platform

The following is an excellent presentation that explains the core concepts of Microsoft's Cloud Computing strategy. Included is an overview of the Microsoft Windows Azure strategy with explanations and pricing of each component.

Apr 29

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Seeing Potential in the Passion to Innovate: Why SaaS Platforms May Have an Edge

Conclusion
Companies who see the potential in their employee’s passion to innovate get out of their way and give them opportunities to get involved in projects they deeply care about. Often exceptional results emerge from these efforts, leading to entirely new businesses. That’s the key take-away of the rule of 20%. For software companies delivering apps on the SaaS platform, the potential for getting immediate customer feedback is turning into an entirely new source of innovation. The speed of customer feedback possible also opens up the potential of giving employees the chance to test new concepts immediately, nurturing innovation in the process.

Apr 15

Google’s Enterprise Cloud Vision Takes Shape at Atmosphere 2010

Having struggled to gain a foothold in the enterprise, Google has this year gone after this market with increased focus and intensity. Part of this increased focus on the enterprise is going to involve exclusive events where CIOs have the chance to interact with industry thought leaders. The first of several events was held Monday of this week at the Googleplex.

Feb 25

Understanding the Differences between Private and Public Cloud Computing

Included is an assessment of the integration requirements by Cloud type. At just over 3 minutes it’s an excellent summary of the differences between Cloud Computing platforms and provides a useful context to understand these two concepts.

Feb 19

The InterCloud and Future of Computing: A Few Moments with Vint Cerf

In this five minute video clip he explains how the nascent growth of the Internet in 1973 parallels the growth of cloud computing today. He calls for cloud computing standards and the equivalent of a “state” engine that would enable applications to more effectively integrate with each other.