For consumer goods (CG) companies, winning at the shelf is all about ensuring consumers can quickly find their brands at just the right time and price. Winning is also about leveraging the right technologies to make that happen profitably. CG companies are increasingly finding that the time and price are ideal right now for Cloud Computing. Survey findings published in CGT’s "2010 Tech Trends Report" show that Software-as-a-Service and Cloud agreements are expected to grow by more than 16 percent over the next three years. Kevin Tigges, Microsoft’s U.S. consumer goods industry solutions director, discussed with CGT why Cloud Computing is gaining momentum among CG companies.
CGT: What factors contribute to the increased interest in cloud computing among CG companies?
Tigges: More and more CG companies are tapping into the cloud’s power to rapidly and cost effectively connect with consumers, improve collaboration and insight, and grow their business. It’s also ideal for quickly launching social media campaigns. A recent article in USA Today cited that social media is this year's biggest driver for major marketers in the 2011 Super Bowl. Advertisers are planning high profile, social media components of their campaigns to establish relationships with consumers that extend well beyond the $3 million, 30-second TV slots that they’ve purchased. Any viral campaign that rewards consumers for tweets and Facebook "likes" needs an infrastructure and technology that can scale quickly to meet spikes in demand and cost-effectively support an unknown number of respondents. By implementing a cloud-based application, CG companies can ensure coverage at peak usage times and then scale back when extra coverage is not needed to minimize cost.
CGT: How are CG companies using the cloud to pursue new business opportunities?
Tigges: Cloud Computing is great for leveling the playing field. A small baker that specializes in gluten-free products can launch a new business using the same enterprise-caliber software and services that a national snack food manufacturer does. Cloud enables companies to focus on their core business without any limitations of physical and technical boundaries. Godiva Chocolate is a great example. Rather than have its IT team upgrade and maintain its messaging software, Godiva wanted them focused on growth opportunities that help drive chocolate sales. Since migrating its e-mail into the cloud using Microsoft Online Services, Godiva eliminated $250,000 in annual maintenance and hosting fees.
CGT: What about security concerns when sharing information across the enterprise?
Tigges: CG companies should take comfort in the fact that the U.S. Department of Agriculture and other fFederal Government agencies, which require the highest levels of security and protocols, are moving several applications to a consolidated cloud service. Just like the USDA, CG companies have a 24/7 mobile workforce that is geographically dispersed. When on the road or working remotely, these employees can tap into a cloud infrastructure to leverage enterprise collaborative capabilities to share information across departments, see colleagues’ availability, choose the most appropriate medium for communication, and streamline messaging. Using Microsoft Online Services, our contacts at apparel manufacturer Kellwood say they are seeing spontaneous online meetings and conference calls happening all over the country with topics ranging from marketing campaigns and promotions to electronic discovery. Plus with access from anywhere to stable e-mail messaging, employees can take their laptops home or to the other side of the world and easily access e-mail versus relying on VPN. These online efficiencies are yielding more time for sales and boosting the success of their famous brands.
Simply put, the reason Cloud Computing is on the rise in the CG industry is because it offers a paradigm shift in cost savings, scalability, agility and global consumer reach. And those benefits are simply too powerful for any CG company to ignore.