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Mapping Session results: Data markets April 24, 2013

Posted by David Card in Uncategorized.
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Our break-out Mapping Session at Structure:Data didn’t product the usual trend analysis framework we strive for, but it did give us some insights in what analysis we need to do to understand the sector’s potential. Generally, we host a Mapping Session discussion, moderated by GigaOM Research analysts with the idea that well pose some key questions on a market, and work toward identifying the key technologies, business models, and user patterns that constitute the trends that smart companies can drive or ride to gains in revenue and market share.

We call those Disruption Vectors, and Mapping Sessions can fuel GigaOM Sector RoadMap reports, where we take the next step and score companies based on their alignment with the trends. But in this case, we confirmed GigaOM analyst Paul Miller’s earlier analysis of data markets. At this point, data markets are a technology in search of a business model.

There’s a reason Infochimps is now more focused on tools than markets, and Kasabi exited the space. It’s not enough to simply say: “here’s some data packages enabled by the new technologies, now go make something of it.”

We concluded during the session that a valid research approach would be to first review existing data(base) markets like Lexis-Nexis, Reed, IHS, Nielsen, mapping, etc., to creates some frameworks for how to exploit the potential presented by the new tech: big data, social media data, Hadoop, analysis tools. The early players were a bit too focused on APIs and early visualization tools, and were missing some critical aspects of a marketplace:

  • An initial customer set they were close to, so that they could better identify opportunities and fine-tune their offerings
  • Case studies from the above that they could market as proofs-of-concept
  • Deeper consulting services aligned with vertical industry markets
  • A way to translate raw data into “currency” similar to how the media industry uses Nielsen ratings to price advertising and measure efficiencies

So we’ll get on it.

Feedback

We welcome your feedback on our approach, and on what you think might accelerate the success of data markets. Are we on the right track. What forces do you believe will be key to driving the sector over the next 12 to 24 months? Continue the discussion by leaving a comment below.

Mapping Session panelists

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Mapping Session results: Mobile media monetization April 24, 2013

Posted by David Card in Uncategorized.
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Last week at GigaOM’s paidContent Live conference in New York, we hosted a break-out Mapping Session to assess what the mobile media industry sees as the strategies and technologies with the most promise of generating revenues and/or disrupting the sector. The resulting consensus was that mobile sponsorships and apps bundled with things like special offers or utility functions would be the horses media and entertainment companies should ride for the next 12 to 24 months.

GigaOM Research Mapping Sessions are facilitated discussions that tap into the GigaOM community to test hypotheses on new technologies, business models, customer trends, etc. We’ve hosted Mapping Sessions on topics like mobile shopping and next-generation user interfaces. They often feed into and set up more detailed analysis we deliver through Sector RoadMap reports.

Media companies have embraced apps – both for truly mobile content and in support of tablets – partly to deliver a user experience optimized for the (small) screen and gesture interface, and partly because they could charge modest sums to consumers for them. Not to mention that mobile is where the audience is. We wondered if that ability to charge would lessen over time — would competition drive away paywalls a la the desktop web, or would HTML5 alleviate the need to customize apps for mobility? HTML5’s solution to the mobile experience will likely take some time, as Facebook and others have realized. But overall, session participants did not seem excited about the ability to charge for media apps other than games or semi-exclusive content like databases, financial news/analysis, and streaming music.

At the same time, mobile ad pricing – outside of search – is higher than that of display ads on the wider web. But as mobile inventory increases, will mobile display ad rates follow online’s declining CPMs? Session participants were more bullish than I am. They believed premium pricing will maintain, driven by 1) the omnipresence of mobile phones, 2) the potentially superior context (location, real-time activities, in- or near-store shopping) that mobile ads can deliver, and 3) the opportunity for mobile ads to be shown deep into a shopper’s purchase cycle. That’s the promise, anyway. Currently the reality is that mobile ad spending is dominated by search – which few media companies can leverage – and Facebook’s volumes of cheap, lightly targeted inventory. On an earlier panel discussion, digital marketing maven Jeff Dachis said mobile was an “engagement” rather than advertising medium.

Assessing market disruption and opportunity

GigaOM Sector RoadMap reports — on categories like crowd labor platforms and work media tools — are collaborative research efforts that match up competitors’ abilities to align with what we call Disruption Vectors, i.e., the key technology or market forces that drive emerging markets. Smart vendors can harness Disruption Vectors to gains in revenue or market share. We steered the Mapping Session towards identifying the mobile media monetization Disruption Vectors, and came up with the following near-term outlook. We asked the participants to vote on the trend or market force they though would be the most important for monetizing mobile media in the next 12-24 months and then choose the one they deemed second most important. I roughly tallied the results from the room:

[dataset id=”173923″]

Source: GigaOM Research Mapping Session, April 2013

Mobile sponsorships/native advertising. After noting that the top iOS paid apps were mostly games, session participants gravitated towards sponsorships. So-called “native advertising” – i.e., the latest buzz-phrase attached to age-old marketing tactics like sponsored content and advertorials – seemed to fit into this bucket as well. There’s only so many content types that fit into a game format, so exploiting this opportunity may be limited, or require much softer ROI analysis, like sponsorships in traditional media.

“The Polybag effect.” Participants were intrigued by a somewhat similar strategy to that of sponsorships: that of bundling content, apps, and utility services, possibly via real-time audience or behavioral targeting. The idea would be that, like a polybagged magazine that included other offers or content, mobile apps and content could be matched up at download time.

Payment system momentum. The people in the room also felt that even though mobile payments and location technologies like NFC might be a ways off in terms of mass adoption by users, there would be enough action on the supply side to create interest and opportunity.

Mobile ad differentiation. A handful of participants thought that mobile advertising rates would hold up strongly, due to the targeting and other differentiation noted above. Many in the room seemed interested in the longer-term payoff from better contextual targeting and even augmented reality integration that will figure in mobile advertising’s future.

Data licensing. The single most popular secondary disruption vector was licensing. Despite concerns from the panelists about privacy, potential legislation, and most media companies’ inability to spawn dedicated data licensing businesses, there’s a lot of hope around this model.

Charging for apps. Few thought media companies could make much money charging for apps. Lkiewise, up-selling virtual goods seems mostly games-related, and dependent on the minority “whales,” who are the most addicted users.

This was a lively session, with lots of good discussion. I’m not convinced we’ve properly weighted the different Disruption Vectors in mobile media, but clearly the participants favor advertising over fee-based apps, while they’re gazing fondly at the promise of creating a data business.

Feedback

We welcome your feedback on these disruptive trends and whether or not they represent real mobile revenue opportunities. What do you think will accelerate the success of mobile media apps? Have we missed or mis-emphasized anything that you believe will be key to driving the sector over the next 12 to 24 months? Continue the discussion by leaving a comment below.

Mapping Session panelists

The GigaOM Research analysts that participated in the Mapping Session were:

 

Mapping Session results: Cloud databases April 1, 2013

Posted by David Card in Uncategorized.
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At our Structure:Data conference, GigaOM Research hosted a Mapping Session to assess the market conditions around cloud databases. Mapping Sessions are interactive break-outs facilitated by analysts that tap into the GigaOM community to test hypotheses on new technologies, business models, customer trends, etc. They often feed into and set up more detailed analysis we deliver through Sector RoadMap reports.

The GigaOM analyst panel sketched out current market conditions surrounding cloud-based database-as-a-service offerings:

  • Hype surrounding MongoDB, due to its popularity with developers and use of familiar programming tools (REST, Javascript). However, it’s garnering less enthusiasm from IT operations: it’s easy to get up and running, but not to manage.
  • Big suppliers like Amazon, Google, and Microsoft are placing multiple bets on different technology approaches.
  • Cloud database offerings are picking off the low-hanging fruit by leveraging classic cloud values – low start-up cost, scalability – but are not addressing mission-critical functions. They’re doing fine at analytics tasks, but haven’t moved into transactional roles.

So what new technologies, business issues, and buying patterns can suppliers harness to gain ground in this market?

Assessing market disruption

We’ve done Sector RoadMap reports on categories like the Platform as a Service market and SQL on Hadoop platforms. Sector RoadMaps are collaborative research efforts that match up competitors’ abilities to align with what we call Disruption Vectors, i.e., the key technology or market forces that drive emerging markets. Smart vendors can ride Disruption Vectors to gains in revenue or market share. Throughout the interactive session, the panelists and session participants described and assessed various potential disruption vectors. Then we took a poll of all the participants to see which ones had some consensus as the most important market forces, and which might have a secondary, or longer-term influence. The chart below illustrates the results:

[dataset id=”172104″]
Source: GigaOM Research Mapping Session, March 2013

Time to deployment. The overwhelming – if, perhaps, conservative – consensus of the session participants was that winners in cloud database would continue to leverage the classic “blank-as-a-service” advantage of quick-and-easy set-up.

Tools. Complementary visualization tools have enabled Hadoop to disrupt the business intelligence sector. What will be the tools that move cloud databases deeper into transactional environments? And which management tools will smooth integration and operations, doubling down on the ease-of deployment theme?

Security. Andrew Brust called it a “buzzkill,” but security and encryption processes are a requirement for many regulated industries and for most serious IT departments. David Linthicum pointed out that it’s possible to deliver security from a cloud database, but not without serious performance hits. There was debate over whether there can be such thing as an abstracted security model – as described at Structure:Data by the CIA’s technology chief – that would support multiple clouds or distributed cloud databases.

Cost. GigaOM research director Jo Maitland observed that total cost of ownership often wins the day, and that new offerings with dramatically lower price points can be hugely disruptive, even if they don’t necessarily translate to a winning strategy. If new players threaten the established pricing structures of Oracle or Teradata, for instance, those structures will either collapse…or lead to M&A activity.

“One database to rule them.” In his SQL-on-Hadoop Sector RoadMap, Joseph Turian described the potential of a Hadoop-like analytics database with the traditional ACID characteristics of an OLTP database. A wonderful thing, no doubt. But not something that’s on the near-term horizon. Right now, it’s not clear whether that transaction/analytics mix is best delivered by an abstracted common interface for connecting multiple databases, or by a single database with separate performance “tune-ables.”

Feedback

We welcome your feedback on these disruptive trends, and on what might accelerate the success of cloud databases. Have we missed or mis-emphasized anything that you believe will be key to driving the sector over the next 12 to 24 months? Continue the discussion by leaving a comment below.

Mapping Session Panelists