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Cloud 2025. Will Near Field Communication be (or not) part of standard off-the-shelve Cloud offerings in 2025?

Seminar Paper 2015 16 Pages

Business economics - Miscellaneous

Excerpt

Table of Contents

1 Mutual Relatedness of Cloud Computing and NFC
1.1 Participants
1.2 Assessments and Measures

2 Future Perspective of NFC in the Cloud 2025
2.1 NFC to be Part of the Cloud 2025
2.2 NFC not to be Part of the Cloud 2025

3 Discussion

4 Conclusion

Abstract

While Cloud Computing has already come of age and is increasingly used in a business as well as in a consumer environment, Near Field Communication (NFC) is still in its infancy and thus has yet to prove its sustainable advantageousness. Even though NFC has enough potential to prevail against competing technologies the diverging interests of a great number of entities involved might eventually undermine the consumer’s willingness to adopt the new technology. In the end, the degree of integration of NFC into the future Cloud depends on the level of adoption of NFC itself. According to top analysts, the most promising field of application is using NFC for mobile payments. Having said that, neither legal nor ethical or health issues have sufficiently been addressed in the overall discussion.

Keywords: Near Field Communication, NFC, Cloud Computing, Cloud

Will Near Field Communication be (or not) part of standard off-the-shelve Public Cloud offerings in 2025?

Cloud Computing is an approach allowing individuals or communities to access computing power and software applications over the Internet on a pay-as-you-use principle (Velte, Velte, Eisenpeter, 2009). In concrete terms this means that Cloud Computing deploys, allocates or reallocates computing resources dynamically while it monitors the usage of resources at all times (Zhang et al., 2010). The vast expansion of broadband Internet and affordable personal computers has promoted Cloud Computing to emerge from its pioneering role to a widespread technology and thus to a growing operating area for the tech-industry (Gartner, 2013). While the progress in Internet and communications technology goes hand in hand with the spread of Cloud services it is yet questionable whether Cloud Computing will promote upcoming technologies in like manner.

Since Apple has dominated the headlines with its introduction of a new mobile payment feature called “Apple Pay” in September 2014 there might be just a few who have not come across the words “Near Field Communication” (NFC) yet (Recode, 2014). Basically, NFC is a wireless technology that enables contactless data exchange over a short distance (Want, 2006). As a matter of fact, NFC is not necessarily a technology that has to be used for mobile payment only. Currently, there are many other NFC specific scenarios to be tested by enterprises and governmental organizations.

Therefore, it is necessary to analyze both technologies with regard to potential synergies. Only if each technology promotes one another NFC will be part of the standard off-the-shelf Public Cloud offerings in 2025.

1 Mutual Relatedness of Cloud Computing and NFC

As a first step, this chapter aims at describing to which extent NFC is today a basis or not for what is to come in 2025. While Cloud Computing has already come of age NFC is still being in its infancy. It is expected that by 2018 more than 60% of enterprises will have around half of their infrastructure on cloud-based platforms (Columbus, 2015). In contrast to that, NFC is yet to be tested for potential fields of applications (Clark, S., 2010).

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Figure 1: Possible applications of NFC technology (NFC Forum, 2015)

In case of mobile tagging, NFC could replace optical codes such as QR-Codes or the like, which allegedly are considered a good solution to connect printed and digital media. By scanning an optical code with a mobile device the user retrieves the decoded URL, which then can be opened on the same device without typing (Ebner, Maierhuber, 2013). What sounds relatively easy and handy can in fact bear certain disadvantages as optical codes often become unreadable or outdated. Moreover, the scanning process can take a considerable amount of time, which leads, especially in the field of marketing, to potential customers’ disinterest in using this kind of technology. By contrast, NFC tags could be used as a more convenient approach since they are more robust and do not depend on ambient light. Likewise, the reading process is usually faster due to the fact that the only thing the user has to do is simply to get the mobile device close enough to the tag (NFC Forum, 2015a). The biggest advantage however, is the possibility to manage NFC tags in real-time by using the cloud to determine what a NFC tag is to trigger when it interacts with a specific NFC device (NFC Cloud, 2015).

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Figure 2: NFC tag (Clark, M. 2013)

Apart from the read/write mode, NFC devices are also capable of operating in the card emulation mode. In this case, the NFC device appears to an external reading device as a traditional contactless smart card, which enables contactless payments or ticketing without changing the existing infrastructure. For instance, a NFC-enabled Point of Sale (POS) and a mobile phone are thus able to conduct a cash-free transaction, given that the mobile phone is equipped with a Secure Element (SE). The SE facilitates the secure storage of sensitive credentials as well as the transaction of payment and is available in multiple forms such as plastic smart cards, SIM cards or micro SD cards (NFC Forum, 2015b). On top of that, a new Google innovation called Host-based Card Emulation (HCE) also allows an application to emulate a NFC-card (Clark, S., 2013a).

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Figure 3: Obtaining Credentials from the Cloud using HCE

By using the Cloud as a virtual storage for the SE it is possible to bypass the need for a hardware SE in the mobile device. With the SE in the Cloud, application issuers can provision without third party involvement and apps issuers are not dependent on the device’s SE owner for storing credentials and instead can provision directly in the Cloud (Weaver, 2015).

1.1 Participants

Depending on the NFC application (cf. Figure 1) there is a wide range of participants to consider. As a matter of fact, NFC could be used in a business as well as in a consumer environment. In the case of a smart home environment, consumers could use NFC tags in order to turn on/off Wi-Fi or to open/lock doors. In combination with the Cloud a single NFC tag could be managed individually depending on the NFC device used. For example, user A wants a NFC tag to turn on the light while user B wants to the same tag to turn on the computer. This scenario is of course also applicable in a business-related context with employees to be given different access permissions for certain rooms or machines.

Regarding mobile payment, the key stakeholders involved are financial institutions and Mobile Network Operators (MNOs). Consequently, Visa International has been one of the first institutions conducting research in this field. One of their studies revealed that 89% of people having tried NFC transactions prefer phone-based rather than alternative payment methods. Apart from that, there are a lot of other parties involved such as mobile device manufactures, mobile operating system vendors, app developers, governments, merchants and consumers (Mayes, Markantonakis, 2008).

1.2 Assessments and Measures

While there are many fields of application for either NFC or Cloud Computing there yet are only a few promising fields for a combined approach. Based on the previous findings of this chapter those fields are namely NFC tags managed by the Cloud and Cloud-based NFC payment solutions. As a matter of fact, it is important to know what top analysts say about NFC adoption and market growth.

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Figure 4: Consensus of Top Analysts regarding NFC Adoption and Market Growth

Another important thing to know is the fact that the degree of adoption varies by region. While in Eastern countries NFC tends to be on a national level, the adoption in Western countries is usually more localized. For instance, Japan has already much of an infrastructure ready for NFC. NTT DoCoMo, the Japanese telecommunications company, already uses NFC and also other companies such as KDDI are following by launching NFC standardized phones (Data Monitor, 2012). Likewise, in Korea NFC tags are already being used as part of an electronic tour guides in museums (Clark, M., 2012). On top of that, Pepsi has launched an out-of-home advertising campaign in Tokyo providing detailed information about their products on NFC tags in the subway (Clark, S., 2012).

In contrast to the adoption in Korea and Japan, the consumers’ willingness to use NFC elsewhere is yet struggling. Many consumers seem to hesitate to use NFC for mobile payment as they feel this form of transaction might not be as secure as cards or cash (Uni Bul, 2015). Moreover, while in developed Eastern countries the implementation of a new technology infrastructure is more of a government issue, in Western regions it is rather an issue of market economy. This however, leads to a lack of standardization due to rivalry among established parties (Boden, 2013). Hence, upcoming technologies usually face an uphill battle as they have to be more convenient, less expensive, more secure or at least provide a greater “coolness” factor than current methods. Consequently, in the following chapter potential outcomes are considered with regard to three key factors: value to consumers, value to businesses and ubiquity. Therefore, the three factors’ degree of fulfillment determines the level of success for NFC being part of the future Cloud.

2 Future Perspective of NFC in the Cloud 2025

2.1 NFC to be Part of the Cloud 2025

Based on the forecasts in the previous chapter one possible prediction could be NFC devices to further increase and thus become more popular, not only among consumers in developed Eastern countries such as Korea or Japan. The digital consumer changes his smartphone nearly every year, which leads to a fast spread of new NFC-enabled smartphones. On top of that, the generation of digital natives is more open to new technology trends and thus less afraid of teething problems or security issues in the early stage of implementation (Accenture, 2015). As a matter of fact, in terms of ubiquity consumers will be more likely to carry a NFC-enabled device than a credit or debit card.

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Details

Pages
16
Year
2015
ISBN (eBook)
9783668445857
ISBN (Book)
9783668445864
File size
917 KB
Language
English
Catalog Number
v364632
Institution / College
Karlsruhe University of Cooperative Education – Fakultät Wirtschaft
Grade
1,1
Tags
Near Field Communication NFC Cloud Computing Cloud

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Title: Cloud 2025. Will Near Field Communication be (or not) part of standard off-the-shelve Cloud offerings in 2025?