$$$$ in the Clouds

The clouds will rain revenue and jobs over the next five years, according to an SAP-sponsored study (PDF) conducted by the Sand Hill Group. The study predicts the cloud will generate $20 billion in revenue per year and create over half a million jobs during this time period.

According to the research firm, IT job seekers can look forward to expanded career opportunities through 2017 thanks, in part, to the momentum set by 11 companies with significant cloud businesses in 2010. Citing evidence from the "Cloud Wars Part IV" report from Bank of America Merrill Lynch Global, Sand Hill says 11 cloud companies added 80,000 new jobs during 2010, representing a growth rate five times higher than that of the overall IT sector. The 11 high-growth companies are: Amazon, Concur, Google, Intuit, Netflix, NetSuite, OpenTable, RightNow, Salesforce, SuccessFactors and Taleo (since acquired by Oracle).

The cloud is also beginning to generate significant revenues for companies with more traditional IT software and services businesses. For instance, IBM derived $2.2 billion, or 14 percent, of its revenue from the cloud in 2010. For Microsoft, that figure was $ 1.95 billion, or 12 percent. Their cloud ambitions -- plus those of other IT firms -- will generate 472,000 jobs worldwide during the next five years, according to the study. The venture capital community is expected to invest $30 billion during the same period, potentially adding 213,000 to that total.

While clouds are undeniably propelling IT job growth, estimates surrounding growth rates vary among research outfits. For instance, a recent Microsoft-funded study from IDC predicts that by 2015 cloud computing will have created 14 million jobs and revenues of $1.1 trillion.

Clouds Gather Around Big Data

Driving cloud growth is an explosion of mobile devices and social networks. Another contributing factor is companies that are investing heavily in IT to deal with so-called Big Data. IDC recently weighed in on the exploding Big Data market, forecasting growth from $3.2 billion in 2010 to $16.9 billion in 2015. However, that rosy forecast comes with a big asterisk. According to IDC, a lack of specialists that can help companies manage and analyze huge, unstructured stores of information may hamper the Big Data market.

Look to the clouds for help, says Sand Hill in its report: "Clearly, cloud infrastructure and platforms will play a huge role in accessing, processing, and analyzing such massive amounts of data. This is where cloud-based systems shine."

Also according to the Sandhill Group study, U.S. businesses can expect to save as much as $625 billion over five years by adopting cloud technologies. When it comes to IT employment, those savings could contribute to a virtuous circle. According to the report, "If companies were to completely reinvest their $125 billion cost savings for the next five years (that is, $625 billion) into new business opportunities, this could result in hundreds of thousands of new jobs."

Super Wi-Fi

Super Wi-Fi
Imagine if the interstate highway system were increase by 1,700% over the next three years. No more traffic jams for years! The FCC and Congress laid the ground work last week to do just that on the wi-fi wireless spectrum by opening up unused frequencies for auction. These new frequencies are coming from large "white-air" gaps that exist between TV channel frequencies on the over-the-air television broadcast spectrum. The FCC plans to auction these frequencies off later this year. Likely buyers will be the big wireless providers (Verizon, AT&T, Sprint, etc.) who will then re-sell to consumers and businesses. This will create a new 5G LTE network which will be 3-5 times faster than 4G LTE. The footprint will be much larger. One 5G cell tower could cover an entire small town. 3-4 towers would cover a small city. Also, 5G will be much more powerful than 3G or 4G. This means fewer dropped calls (because of a stronger signal) and much larger/faster data pass-through. Look for 5G to be in the marketplace in 2013. Big users of this network will be large corporations that will move their enterprise data systems on to the handheld/mobile platform. Of course, this will spawn a whole new generation of 5G-capable smartphones and tablets, keeping those manufacturers in business!


Turning Your iPad into a Windows 7 Platform

Finally you can turn your iPad into a serious Windows 7 productivity tool with a very clever app called OnLive Desktop. Just download the app on to your iPad (it's free) and execute a very simple setup and voila, you have a very easy-to-use Windows 7 platform loaded with Microsoft Office (Word, PowerPoint and Excel) functionality. You also have a Microsoft Explorer browser which will run flash-based websites. For $4.99/month, you can also connect to OnLive's cloud server and upload your key documents and then edit them (using Word, PowerPoint and Excel).

An alternative to OnLive Desktop is Splashtop. This app recreates the desktop of your laptop or PC by producing a totally functional, real time "mirror" copy. This means that you are actually manipulating your laptop or PC remotely through a wi-fi or wireless connection on your iPad. You have access to all your programs and files (no cloud computing here). With these two apps loaded on to your iPad, you truly will be less dependent on your laptop or PC when away from the office. True mobile/handheld computing!


Mobile World Congress – Barcelona

With all the buzz coming out of Barcelona, the following seems to be observed and noted:

• Attendance has tripled. Not just developers attending, but big corporations, marketing services companies and the media. This is becoming bigger than the Las Vegas-based electronics show.
• New hardware announcements appear to be about thinner, more powerful (processing speed) smartphones and tablets with better cameras, display screens and audio/video capabilities.
• No ground-breaking app development or announcements (yet).
• Android-based hardware and apps seem to dominate the conversation. 

Hiring 50 and Over

Despite the unemployment figures being ballyhooed in the press, an interesting phenomenon is occurring: the increased interest in, and hiring of, candidates 50 years of age and older. This seems to fly in the face of conventional wisdom that advertising, digital and marketing services is a "young person's game." Well, the game seems to be shifting a bit in favor of the gray-haired sage with maturity, experience and most importantly, the ability to self-manage.


We are, experiencing an increase in hires at this age. Several of our clients are interested in senior-management candidates "that have been there and done it." The appeal of these more seasoned veterans seems to be:


• Very little start-up time or training they hit the ground running
• They can self-manage effortlessly
• Highly disciplined
• Strong leadership skills
• "C-suite-ready" they can interact with a client's senior-management team with little coaching
• They don't panic "under fire" or in stressful circumstances/situations
• Strong client management skills


Typically the over-50 candidates we have placed are not out looking for jobs and they are not unemployed, but have been aggressively recruited for specific senior-level skills and experience. There are even a few instances of over-60-year old candidates being recruited and hired for their unique experience.

Update: Unplugging From Legacy Media

Two weeks ago we wrote about unplugging from legacy media with an emphasis on consumers cutting the cable TV cord in favor of online video streaming. In this Tuesday's (2/21) Wall Street Journal (Marketplace Section) an article appeared on this very subject: "Over-the-air TV Catches Second Wind, Aided by Web" -- a very interesting corroboration of our view point on this subject.

Unplugging From Legacy Media

First, Landline Phones
The great unplugging movement has begun. The first wave started in the late 2000's when more and more people realized that most of the phone calls they were receiving on their legacy landlines at home were telemarketing calls. At the same time, most folks found that the majority of their phone time was spent on cells or smartphones. So why pay $30 -$40 (or more) per month for the landline? Alas, the landline started to become unplugged. In late 2009, it was estimated that 25% of all households were cell-phone-only (CPO). Today the CPO estimates range from 40%-50%. Traditional landline providers are leaving the business (or have begun spinning it off) in favor of wireless distribution-only. Granted, most of this landline termination has been occurring in the residential/consumer market. Most students graduating from college have never been tethered to landlines. As they enter the real world, their primary "addresses" and communication links will be their wireless phone numbers and SMS text portals. But how far off is the unplugging of corporate landlines? Theoretically, small businesses do not need landline services with a plethora of wireless and ViOP (think Skype) options available.


Second, Cable/Satellite Television
The next unplugging wave is now hitting the cable-television and satellite-service companies. With high-speed broadband now reaching 60% of all US households, video streaming is catching on in a very big way. Monthly cable bills (not including internet services) are reaching the $60-$90 range (even more with premium programming services). Consumers are now pulling the plug with increasing frequency. Roku seems to be the video streaming device of choice. About the size of a deck of cards, the device plugs into your flat-screen TV via an HDMI connection and receives your household WiFi signal. Roku offers up to 100 "channels" free of charge. These channels include popular programming options like Netflix, Hulu Plus, Amazon Plus, Crackle, BBC, PBS as well as all four major US networks. The Roku unit retails for $60-$90. Most popular TV programs can be viewed 24 hours after they air on cable or the networks. The quantity of older, archival programming available is amazing. Also, new "streaming-only" content providers are developing original programming. Netflix just announce their first original programming effort last week. Add a high-tech HD over-the-air antenna to receive local stations (UHF/VHF) and you end up with about 70% of the programming you would receive on the cable or satellite services for nominal fees!
The negative impact of video streaming on the cable and satellite providers will be huge over the coming years particularly in terms of lost ad and subscription revenue. Local television affiliate stations may slowly become superfluous as major content providers stream their programming directly to the consumer via the internet/wireless distribution channel. Social media may take on a whole new look and feel as it migrates to the HD television screen. Imagine a streaming Facebook channel. Also, marketers will establish their own streaming channels (or apps) with info commercials and original programming that feature their products. Look for new, streaming-only content providers to grow rapidly in this space. Also, as the baby-boom generation moves into living on a fixed-income during retirement, they will definitely opt for the video streaming as a low-cost alternative to expensive cable and satellite subscriptions.


Third, Broadband Internet Service
The third area of unplugging will affect landline broadband service providers selling internet connection to residential customers. The lower-cost alternative will be a broadband wireless internet connection via the newer 4G LTE wireless platform offered by Verizon, ATT, Sprint, etc. Most android-based smartphones can transmit a wireless high-speed hot spot to other devices (iPads, laptops, video, game consoles and streaming devices, etc.). At the moment, the subscription cost for such a "hot spot" smartphone feature is $30.00 per month ($10-$20 less that a landline broadband connection). The beauty of the hotspot feature is that you can take it with you, anywhere. Your internet connection is not shackled to your home. And, the hot-spot connection often is much faster than your traditional wired connection at home. Look for more broadband wireless frequencies to be sold by the US government allowing for even faster wireless connectivity. This will increase the migration (unplugging) away from traditional "wire-connected" broadband services.


What will unplugging from legacy media mean for marketing services agencies, digital/internet agencies and social media firms... in terms of revenue, strategic planning (internal and for clients) and staffing?  More to come on that in the next few blogs. 


© 2012 Eric Kercheval & Associates.  

Eric Kercheval & Associates is an executive recruiting and mergers/acquisition advisory firm with over 20 years of providing marketing services and digital development companies with search and M&A services. Please go to our website for more information this subject and to learn more about our recruitment and M&A advisory services or email Eric Kercheval at: eric@ekassoc.com

E-book Reader vs. Digital Tablets

Despite the intense press coverage of Apples explosive iPad sales, it is interesting to take note of Pew Research’s recent survey on E-book vs. Tablet Computer ownership.  The survey results suggest that ownership is even fairly evenly split between the two types of devices and have experienced similar growth increases.   The same survey showed that 29% owned either a digital tablet or E-book reader.

The same research study showed that E-book market share of total book sales does vary by category:

6 Ways to Recruit Top Senior-level Talent to Your Firm

Your company is thinking about, or in the process, of filling a SVP, EVP or similar-level position. How the candidate during the recruitment and interview process is critically important to assuring you have the best and motivated candidates ready to accept the position on your terms.  Below are six essential recommendations that Eric Kercheval & Associates suggests to their clients in order to attract and close on the best-of-class senior-level talent:

1. Clearly communicate the company’s vision, mission and goals.  This information is vitally important for the candidate to hear and understand.  There should be no ambiguity, fuzziness, hype or hyperbole in articulating this.  Make sure all team members who are part of the interview loop or hiring decision-making process are all on message.  Nothing spooks a candidate more than sensing your senior management team is not on the same page.  It is surprising how often this is the case.

2. Clearly communicate the role the candidate will play in achieving the company’s, mission and goals and spell this role out in the job description. Make clear the candidate’s fit within the senior-management organizational structure. If the person is being brought in to fix problems, be up-front about what the problems are and what caused them.  And be up-front about any company weaknesses or problems that the candidate will find out about within the first 30-60 days.  Believe me, they certainly will!

3. Clearly communicate the expectations you have of the candidate at the three-, six-, nine- and twelve-month milestones.  Also clearly communicate and outline the evaluative criteria that defines success at each milestone.  If compensation incentives are attached to such milestones, clearly communicate the formula by which the incentives are derived.

4. Program into the interview process a number of feedback points when the candidate will be required to communicate/respond back to you their thoughts about the interview process, the job description, mission, goals, expectations, etc., so that you are able to evaluate the candidate’s critical/strategic thinking, listening skills and communications abilities.

5. At this level of hire, have the CEO or President of the company involved in the initial meet-and-greet process.  This strongly communicates to the candidate the importance of the position.

6. Execute a well-orchestrated interview process first by providing the candidate with meeting/interview agenda and/or company info packet ahead of the interview date.  When the candidate is in your offices, keep the interview process running on time.  Instruct your key interviewers not to take phone calls or check email (or their handheld devices) during the interview.  If possible, provide your interviewers with “key evaluative criteria” outline sheets (to guide the interview process) and a means to communicate their evaluation of the candidate back to the primary decision maker(s) promptly.


Always remember that any candidate (regardless of level) will evaluate the company and job opportunity based on how the recruitment/interview process is handled.  If handled well, efficiently and professionally, the candidate will be far more inclined to seriously consider, and hopefully accept, the position on your terms.  Conversely, if the process is handled poorly, the candidate will likely lose interest quickly and move on to other opportunities with your competitors.

Your recruitment and interview process should be a powerful public relations tool.  Every candidate who interviews with your company, regardless of the outcome or position level, should walk away from process impressed… casting a favorable halo over your company.   Let them spread the good word.

Eric Kercheval & Associates is an executive recruiting and mergers/acquisition advisory firm with over 20 years of providing marketing services and digital development companies with search and M&A services.  Please go to our website for more information this subject and to learn more about our recruitment and M&A advisory services or email Eric Kercheval at:  eric@ekassoc.com