As you all know (and thank you for your many kind comments and forwarding of my blogs) my objective is to open up your lens, get you to step outside of your comfort zone. To disrupt and innovate as we talk in ProVoke , we need to be mindful and think through how we are changing things. The utility analogy of Carr, firstly educates those who may not be savvy in cloud computing, then he explains the analogy of cloud to the utility business. This analogy often gets used, and I wanted to share this analogy with my readers.  Below you will find a summary of The Big Switch.

Read the summary, send your thoughts over in social media , so myself and everyone can be on the dialog. Summary below.  Enjoy!

In The Big Switch: Rewiring the World from Edison to Google (2013), Nicholas Carr examines the cloud computing revolution, from its underlying causes to its implications for individuals, business and society.

What is the cloud computing revolution?

• Computing is turning into a utility, in which giant information processing plants use the Internet (cloud) as a grid for delivering services.
• Companies can now purchase what they formerly had to supply themselves, relieving the burden of private in-house computing.
• Economic trade-offs are driving this transformation; it is not really our choice. Centralized delivery over the Internet offers efficiency and flexibility at extremely low cost, which private data centers can’t match.

Why is it happening now?

• Previously, communication capacity lagged far behind processing capacity, preventing centralized delivery of computing.
• This has changed. Internet bandwidth has become plentiful and cheap, thanks to the millions of miles of fiber-optic cables laid down by communications companies during the dotcom boom.
• The full power of computing can be delivered from anywhere, because data can now stream through the Internet at speed of light.
• With the World Wide Web, all computers can be connected as a single network.
• Virtualization and additional technologies have been critical in enabling large-scale utility computing (i.e., one server can now run many applications with a single computer).

What are the implications for the IT industry?

• Cloud computing threatens to destroy traditional IT businesses like Microsoft.
• Eventually, PCs may be replaced altogether by simple monitors, or “thin clients.”
• As utility services are maturing, PCs are becoming a less and less attractive option.
• Private, in-house IT is unlikely to last.

Like the changes that swept through society when electricity became a utility, the advent of cloud computing will have massive implications for us all. Many are becoming visible already, and some of them are less positive than others. Here, I focus on some of the more interesting (and startling) consequences of utility computing.

Digitizing and unbundling of physical products

• Physical objects are increasingly turning into digital goods, thanks to the cheap price of computing and bandwidth. Losing physical form and turning into pure information.
• Whole products are being unbundled into discrete parts and fragments. For instance, newspapers are being increasingly replaced by one-liner headlines on Internet news sites.
• User-generated content is on the rise, because the means of production on the Internet are freely available to anyone.
• Some areas in the information industry are losing out. This is clearly evident in the workforce losses in publishing and broadcasting.

Income inequality

• Computerization is accelerating the wealth gap by unleashing powerful economic forces, giving rise to a very small number of massively wealthy “digital elite.”
• Companies can grow extremely quickly with few workers, where business is constructed mostly of software code and dependent on user-generated content.
• This economic realignment benefits a few individuals, not a few companies.

National security

• Technology is amoral, and the Internet can be used by anybody, anywhere, for good or ill.
• The Internet has become our most vital commercial infrastructure, in all sectors, but it is not under national control or within national borders.
• Very serious danger posed by cyber terrorism, viruses, etc. on the new Internet battlefield.  

Privacy

• The Web is really a web of information about all of us. Information is stored permanently, and our Internet footprint never fades away.
• The Net puts power not just in individuals but also companies, governments, etc. that seek to control individuals. This reduces privacy.
• The computer is ideal for controlling information, even as it is empowering.

How we think, behave and relate to one another

• Cloud computing and the Net tend to exacerbate polarization of people with different beliefs and opinions, through filtering, personalization, etc.
• Encourages us to think more superficially, subjectively, immediately, and less deeply or analytically. 

The Web as a possible perfection of the human mind

• Companies like Google are trying to perfect the human mind by detaching it from the body.
• Merging of computers and people, as the Internet’s computing web incorporates humans more and more completely.
• We are feeding human intelligence into the artificial computing mind. Computers will eventually not just take instructions from us and learn, but write their own instructions.
• With the expansion of Internet’s power and scope, we are increasingly cogs in its machine.

In sum, we are leaving the PC age and entering the age of the cloud. The Internet grid is connecting us all. Even Bill Gates recognized the magnitude of the disruptive potential of the cloud while he was still at Microsoft.

The dual nature of the cloud gives power to both individuals and institutions. It offers freedom and control. It’s neither all bad nor all good; neither the utopia nor the dystopia predicted by some. We have yet to anticipate the full consequences of cloud computing; these will take time to become visible. Our technological capabilities have raced ahead of institutional responses, leaving us with social and legal dilemmas. Privacy and security issues are just the beginning.

There is a lot of hype about the cloud today, but it will take time for utility computing to mature. The shift is still in its early stages, and its full effects will be felt as the young generation of today matures. Nevertheless, the cloud is where the growth is, and it is reshaping the entire information economy. Companies in the traditional IT business must commit themselves to adapting to these transformations in order to survive and thrive.

Image credit via MemeGenerator.net.