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Cloud to compete, data to differentiate

26 April 2017
Cloud to compete, data to differentiate

According to the logic of the innovation cycle, a period of new ideas and heavy investment is typically followed by a calmer time, where investments get understood, applied, and refined.

Arguably, this is the cycle that we’ve been witnessing in the media world over the last 24 or so months – most notably in the areas of software and cloud. These terms, that have been used so liberally by so many, have moved from the realms of concept and aspiration to well defined, trusted solutions, underpinning the operations of media businesses across the globe.

Two providers that are often singled out for their cloud prowess are of course Netflix and Amazon. It’s a well-known fact that in 2016, both companies declared themselves ‘cloud native’ businesses, a fact that they underlined with new service launches to many hundreds of countries all in the course of a day. No glitches, no dramas.

These moves garnered many headlines – mostly focused around the sheer volume of countries in which the companies were now present. But there was another story here, that maybe was a little quieter, but no less significant.  This was the story that a cloud based operating model for media had been defined – and that it’s benefits in terms of service delivery scale and agility were evident for all to see.

In the 12 short months of 2016, Netflix and Amazon essentially established the new entry standards for competition in the media industry. Software and cloud core. And we all, quite rightly, took note. In 2017, virtually every media business has either established or has well defined plans to move to some form of cloud based operating model; because if you don’t have it, then you’re at a sizeable strategic disadvantage, unless you’ve sunk costs in a fit for purpose dedicated infrastructure (which let’s be honest, is unlikely).

So, if cloud and software have moved from high-stakes to table-stakes, which levers are left to pull to achieve service differentiation?  Firstly, you have to recognise that while cloud’s here, that certainly doesn’t mean you can’t differentiate with it.  Anyone that’s dealt with the technical and commercial facets of cloud mechanics knows that there’s yet still plenty of opportunity to subtly differentiate using these ‘core tools’.

But where do you look outside of cloud? Sure, we’ve got the recent headliners of VR and AR, voice control and all things ‘immersive’ (360-degree video, 8K and so on). All relevant but none that arguably offer the same differentiating potential as data.

Clearly, this isn’t a new topic, and in some ways, we did our best to kill it by prefixing with words like ‘big’ – which in most cases actually weren’t ‘big’, and perhaps with some exceptions, also weren’t especially clever.

So why should we care about it now? For me, it’s down to access, opportunity, and impact. 

First of all, let’s look at access. Most broadcasters or service providers will likely have access to more data than they appreciate. There’s the basics, such as audience consumption data, but then there’s also systems data, content metadata (schedules, programme descriptions and so on), ‘access data’ (including captioning files and audio descriptions – time coded records of every spoken word, in every piece of content), a growing repository of device data, not to mention good old fashioned ‘editorial data’ (or the many years of wisdom from your commissioning and scheduling teams about what content works, at what time and with which audience). A lack of data is something you probably don’t suffer from.

And then there’s opportunity. One of the areas of technical innovation that just keeps accelerating is processing power. Seemingly every year there’s the release of a new generation of processor that makes last year’s model look like a battery powered calculator. And of course one of the main beneficiaries of this continual bombardment of power is data processing. Now of course, raw processing power needs to be harnessed by smart applications, but the fact that the rate of development in processing power is so massive, gives us huge opportunity to leverage the data assets we have access to.

And then there’s impact. Going back to the top of this article – cloud has been done. Okay, so there’s plenty of mileage left to make things better, but for now at least, the competitive model to be aspired to has been defined. Can we say the same about data? Personally, I don’t think so. There are many, many super smart media businesses out there, doing very clever things with data, but has anyone claimed to have harnessed the full potential that data should offer yet? To create self-healing systems that deliver a bullet-proof device, network and location optimised experience? To deliver measurably better, truly personalised content choices and advertising? To create new content discovery models beyond a slickly defined UI, moving video backgrounds and full bleed images? I’d argue that there are many on that journey, but we’ve not yet seen ‘the template’ that we’ve arguably seen recently with cloud.

Now it must be said that one of the reasons that we’ve maybe not yet seen ‘the dawn of data’ is that while we have the access and opportunity, it’s hard – really hard. The resources are scarce and expensive, the processes are often complex and abstract, and the goal isn’t sometimes defined until you’ve got there. But assuming you’re already well progressed with your software and cloud strategy, there are few areas that will offer the same potential to create high impact, defendable differentiation. A difficult path worth taking in my opinion.

By Kris Hardiman, head of product marketing, media at Ericsson

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