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The Future of Retail and the Cloud Wars

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Retail is undergoing a massive transformation as we speak. Thanks to the rise of smartphones and apps, constantly connected customers are now able to do what was once pure fantasy. Every day, millions walk into traditional big-box retailers. After finding what they want and intend to buy, they are whipping out their iOS and Android devices and comparing in-store prices with those of online giants, most notably Amazon. If the price is lower online, then they make their purchases via their smartphones and promptly leave the store.

The name for this retailing scourge is showrooming. It's no understatement to say that it represents a herculean challenge to brick-and-mortar giants like Wal-Mart, Target, Home Depot, and others. The stakes have never been higher. We all saw what Netflix did to Blockbuster-or, rather, what Blockbuster did to itself.

What's a traditional retailer to do? Nearly two years ago, Target stopped selling Kindles in its stores, not that that move alone would stop consumers eager to find the best possible prices. That move certainly didn't deter customers from the practice.

For traditional retailers, perhaps the answer will stem from an early-stage startup with cutting-edge technology.  Austin-based eyeQ seeks to do nothing less than reinvent the in-store shopping experience. From its website, the company:

provides brick-and-mortar retailers with innovative methods for understanding and engaging their customers. We provide leading retailers the ability continually learn about consumer purchasing behavior, generate business intelligence, and influence consumer purchasing in-store. eyeQ's solution utilizes patent-pending algorithms to create at-shelf behavior information for the retailer while providing the shopper a content-rich, efficient buying experience.

I had a chance to interview eyeQ founder and CEO Michael Garel and CTO Jim Wang at IBM Impact 2014. If eyeQ seems a little bit like the futuristic advertising in Minority Report, you're absolutely right. I walked away very impressed at what the startup has been able to accomplish in such a short period of time. The company's product is extremely interactive and visual, essential features in today's data-driven world, a point that I make in The Visual Organization.

Now, eyeQ is hardly the only startup with grand ambitions like transforming retail. Unlike many, though, eyeQ does not rely upon Amazon Web Services (AWS), a $5-billion division within Amazon. Rather, eyeQ is one of the first startups to power its business via IBM BlueMix, a "platform where developers can act like kids in a sandbox, except this box is enterprise-grade."

In practical terms, this means that cloud applications built on BlueMix will help developers quickly build and integrate new applications. What's more, BlueMix is designed speed deployment of new cloud services.

IBM hopes that BlueMix will become a viable option for startups like eyeQ and the more than 20 million small businesses in the US alone. Admittedly, the vast majority of IBM clients have historically been large and medium-sized enterprises, a point that I made while speaking with Nancy Pearson, IBM Vice President, Cloud Category Marketing. Getting small business owners and entrepreneurs to think about IBM's offerings is perhaps one of Big Blue's biggest challenges.

Nor is IBM the first enterprise software giant to court developers. Who can forget Steve Ballmer's vociferous "developers" chants of 2000 and 2008?

It will be interesting to see how the cloud wars play out over the next five years. Behemoths like Oracle, Amazon, Microsoft, Google, and Rackspace are playing a game worth billions of dollars.