Cloud Computing Gathers Steam

 

Like The Wisdom of Clouds author James Urquhart, I was floored by the cloud computing meme explosion.  What was an initial comment about Who will Ride the Clouds was picked up by tech visionary Nicholas Carr Monday, in addition to several new media outlets.

 

While I’ve been living in networking and security technology the last ten-plus years, the implications of cloud computing took me back to an econ history course I took in grad school taught by Walt Rostow.  Walt authored several economic history textbooks, including a tome from the sixties called The Stages of Economic Growth, which was subtitled “a Non-Communist Manifesto”.

 

Walt’s wonderful course was about how fluctuating terms of trade over hundreds of years between raw material and finished goods economies were a backdrop to various stages of economic growth and development experienced by nations around the world.  Cultural factors, geographical conditions and markets shifted wealth across hundreds of years and thousands of miles as demands and trade routes shifted, technologies and tastes evolved and new raw material sources were discovered or depleted.

 

For his time Walt was highly controversial in many circles, not just because of his belief in the triumph of capitalism (especially in the sixties) but also because of his unwavering support for the war in Vietnam.  Yet I found his economic history perspective refreshing, especially before the outright collapse of communism.

 

Because of Walt’s scholarship I saw cloud computing within an even larger context than its impact on network and security equipment/software.  As cloud computing decouples software, services and servers from physical hardware it poses an incredible impact on who benefits from IT.  It promises to shift IT operations careers from highly congested and expensive real estate markets to remote farming communities in areas with cheap power.

 

We’re already witnessing shifts in how technology firms operate, including the rise of teleworking and the movement of larger firms with mature technologies to lower cost (especially real estate and tax) locations.  When you add virtualized cloud IT to the mix, you add an even more powerful dynamic that is already moving IT operations to remote areas like Quincy, WA, which offer cheap electricity and cheap real estate, not to mention less congestion.

 

As massive server farms are built, small farming towns become the factories of tomorrow.  The Detroit-styled, urban bureaucracies and wealth transfer engines (that relied upon proximity to unprecedented wealth creation to insulate residents from the ongoing dance between productivity and resources) start crumbling at a faster pace.   

 

IT operations flight would disproportionately hit communities that have depended upon unprecedented gains in tax revenues driven by their proximity to powerhouse technology company headquarters and branch offices; and would deliver the equivalent of a route change for the information superhighway.  Remember the ghost towns created by dried up mines or shifts in railroad routes?

 

Similarly, large technology companies that fight the tide by keeping IT operations in higher cost metro areas pay disproportionately for the same services as their competitors.  The Googles (GOOG), Microsofts (MSFT) and Amazons (AMZN) enjoy competitive advantages by spreading the wealth into communities that were once isolated from the industrial and computer age, where many residents don’t have an email address.

 

The age of motorized transportation drove incredible resources to the automobile and the petroleum industry, enriching towns and even deserts with manufacturing or processing plants and oil facilities.  The information technology age may similarly empower a new generation of communities, companies and electricity producers. 

 

If cloud computing and virtualization launch the age of strategic electricity, power plants could become as important to economic growth as universities and entrepreneurs.  New investments in new energy technologies could finally give us the impetus to break our dependence upon fossil fuels.

 

There are still technology barriers to the cloud computing vision, including virtualization security, application management and delivery, I/O processing and change management, to name a few.  New companies have already emerged to tackle these challenges and as their new approaches get adopted new potentials are unleashed.  I’ll be talking about them here at Archimedius in coming months.  I just had to tee them up within the larger context as a tribute to Walt Rostow, a great professor and scholar.

 

Disclosure: None

 

Comments

[chiker]

Very interesting. Not just urban but also suburban centers that survive on proximity to large corporatations or cities will suffer from IT transporting the revenue streams to cheaper locales. Truly a movement of the 'clouds.' Rostow may have been great economist but watching the documentary 'Hearts and Minds' and reading on the 'Wise Men' reveals a stubborness for war that was unmoved by the deaths of thousands of good Americans and the utter destruction of a small, poor country in Southeast Asia. The country Vietnam, communist as ever, and an current trade partner that bottles Coke and lobbies for Boeing factories. Stubborness for what?

[Virtual]

Excellent article, it is indeed true that larger corporations have long since realized that it essential to keep cost down and virtualization has become one of the most powerful tools in the arsenal to achieving this goal.

[Clavis]

OK, we know Vietnam was a shambles, but the original principle?
As now, I dare speak the unmentionable, it is happening there, not here.
The future has to be knowledge, the dispersal of same without dilution has to be the aim of every sane person, clouding over my cool some hotheads.

[GNESS]

Thanks for the comments. Walt did blast me one time in class for questioning our posture after the 68 Tet offensive. His class was simply incredible and it was refreshing to hear a voice from that time and place talking about the power of markets versus insulation.

Guns, Germs and Steel was excellent... but I liked Walts class because he did correlate cultural practices and outlooks as factors in growth, from the silk industry in Japan (which he argued supported fast adoption of the quality movement) to the rampant socialist bureaucracy in Egypt set up by Nassar and that continued at least until my grad school days.

Thanks Again
Greg gregness.wordpress.com

[Mev]

Thanks for posting such a great and informative article Greg! I’m a marketing intern for GoGrid (www.GoGrid.com), and in the process of learning the various aspects of “Cloud Computing.” Considering myself as a newbie, I frequently find myself overwhelmed with all this "Cloud talk." Since you have experience in the networking and technology area, I’m sure you are aware that GoGrid is known to be a competitor to Amazon EC2 (blog.gogrid.com/2008/0.../. I highly agree with your comment “cloud computing decouples software, services and servers from physical hardware it poses, and being an incredible impact on who benefits from IT.” I do believe that cloud computing will have a major impact on our economic growth, especially with IT budgets being cut due to the recessive trends in the market. Because of this, many IT departments are looking toward cloud infrastructure as a cost-effective alternative to traditional IT. I’m looking forward to more of your posts, if you can please give me some more insights on as to how companies are dealing with the technology barriers, especially focused to the cloud computing vision. It would be a great learning experience!

Thanks,
Mev

[nickgogerty]

the singularity uber alles.