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Closer Analysis of Service Penetration Trends

By Jason Kohn, Contributing Columnist

In my last post about exploring user adoption trends, I shared insights from the Cisco Connected Life User Experience (CLUE) — the unique Cisco tool that tracks worldwide service adoption trends in a weighted index. By comparing how the CLUE index has changed since 2008, we can see not just the rate at which a given service has been adopted, but how priorities have shifted over time.

Once again, Thomas Barnett of the Cisco Service Provider Marketing team:

“People often want to jump immediately to asking if this means that X percent of people in a region are using a particular service. We can get to that, but we’re trying to look at services more holistically. We want to be able to quickly grasp how people’s feelings about services are changing.”

The best way to appreciate how this might be useful is to look at some real world examples.

Effects of the Economic Downturn

CLUE paints a fascinating picture of how the economic downturn has affected adoption of residential, business, and mobile services. Over the last two years, the worldwide At Home index, for example, rose just 7.56 points, compared to a gain of 14.7 for business services.

This speaks to how people react in times of economic stress. Adoption of advanced services in the workplace remained brisk, as many such services have a direct impact on the bottom line — improving productivity or directly reducing costs. For example, high-definition video conferencing was the biggest mover in worldwide business services, rising 3.54 points as companies sought to cut down on travel expenses.

At home, it was a different story. As people felt pressure to trim back personal spending, they held off on adopting the newest and coolest entertainment services. Services like next-generation TV took the hit for that frugality, growing just .68 points worldwide since 2008.

One area that saw huge growth even in the face of a sluggish economy was mobile services, which eclipsed both residential and business growing 19.45 points worldwide.

“That validated our impression that people are relying on their mobile devices, smartphones, and tablets more than ever before,” says Shruti Jain, who developed CLUE along with Barnett. “Even as they cut back in other areas, mobile is becoming a more important part of our connected life.”

Mobile Commerce Keeps Moving

Another interesting trend is mobile commerce (m-commerce), or using a mobile device to conduct financial transactions. It’s one of the fastest-growing services worldwide but one that’s growing for different reasons in different parts of the world.

CLUE shows that, in North America, adoption of m-commerce is still lagging, ranking dead last in market penetration out of 10 services measured. In the most technologically advanced markets in Asia Pacific, however, m-commerce ranked near the top of all mobile services, just behind messaging.

Interestingly, m-commerce penetration was even higher in some of the least technologically advanced markets in Africa and the Middle East. Jain offers an explanation:

“In highly developed regions, mobile commerce is chiefly about convenience: just being able to carry all your credit card and banking information on your mobile phone, instead of in your wallet. It’s a very different story in less developed regions, where there is a lack of physical infrastructure for finance and banking. In these markets, mobile commerce is helping to bridge that gap, and provide the core financial services that any region needs for economic development.”

It’s fascinating insights like this that make you realize what a powerful tool the CLUE index can be to demonstrate how service provider infrastructure is changing our lives. If you’ve had an opportunity to use the tool, then please do share your own observations.

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