International economics & business journal “The Economist” summarises well, the background of how this change has been brought about. In their words, “Computing is undergoing one of its great periodic shifts. In its early days, most computing took place on mainframes. Ever-falling costs led computing to shatter- first into minicomputers, then into personal computers (PC’s) and, more recently, hand-held devices. Now communications is catching up with hardware and software and, thanks to cheap broadband and wireless access, the industry is witnessing a pull back to the middle. This is leading much computing to migrate back into huge data centres. Networks of these computing plants form ‘computing clouds’ – vast, amorphous, delocalised nebulae of processing power and storage”
For businesses, the shift towards “Software as Service”, “Communications as a Service” and “Infrastructure as Service” (all of which are types of ‘cloud computing) is well underway, with proponents such as Salesforce having led the revolution, and many businesses now operating completely via internet platforms. The concept expands to include everything from IP telephony, to the physical storage infrastructure of a company, in all cases, they pay for ‘what they use’ and have massive expansion capability, remote access, redundancy and a whole host of other benefits. Market leaders such as Microsoft have even started to offer their most popular desktop tools (eg: Microsoft Office) as completely internet based platforms. The example of Microsoft having been seen in their shift of commitment from “…a computer in every desk and every home” to, “supply services to every desk, every home, and every hand”.
For consumers, the shift towards cloud computing has been slightly slower, but is gathering incredible pace. Many of us are now accustomed to using completely web-based tools for email, and for our photographs. More recently a number of companies have even started to provide online storage and backup, allowing you to push all of your data onto a remote server giving “redundancy, security, and access from anywhere”.
In the academic world, cloud computing has been around for quite some time, with ‘grids’ of supercomputers, and ‘clouds’ of users (eg: SETI@Home) having been used for over a decade to aid in solving complex mathematical and scientific problems. Many in academic circles would argue (and I would agree) that the internet itself is, when aggregated, the largest example we have of a cloud computer.
There has, though, been a [large] degree of resistance to a more widespread and fluid shift from desktop to cloud-computing. To consider this resistance, we must understand that it is only recently that society has, for the larger part, come to terms with the concept of ‘computing’ as we went from no computers to ubiquity within a single generation (thanks to Bill Gates & his counterparts). To put such faith in computing took a huge change in thinking for society, but the change was, to a degree, made easier by the fact that we could see the physical ‘boxes’ doing the work (the desktop computers, servers, storage units etc). This allowed us, as a society, to delegate tasks to computers while still retaining ownership and control of the hardware (thus, we maintained control over its security and health, and were not dependent on individuals or companies for its existence). This could be likened to a “bricks and mortar” approach to computing (in the same way that many were happier purchasing their property and having control, rather than delegating the ownership of their home to a landlord and renting).
Cloud computing brings about a whole new range of psychological issues which society must conquer before these technologies reach the same level of ubiquity within society as other forms of computing have.
A few weeks ago, in a cafĂ©, I was with an associate who asked my opinion on “online backup” questioning whether it was safe. In the same week, a client I consult for exhibited a great deal of resistance to a shift towards an online accounting system as they, “…didn’t feel comfortable with someone else controlling their data”. These attitudes are rather symptomatic of an underlying distrust society has for cloud-computing, the reasons for this can be broken down into a few areas:
• Ownership of Data:
Individuals and businesses are naturally protective over their data with the former often having ‘paranoid’ and ritualistic backup regimes to give maximum redundancy. There is also a psychological element where one places a great deal of value on data as an asset (however amorphous it really is) and thus is unwilling to delegate its physicality to another party.
• Security:
This concern is rather more obvious, and involves the security of their data whether that be against electronic attack (eg: hacking), or physical security of the data centre where their application/software is housed.
• Redundancy & Reliability:
Particularly in ‘uncertain’ economic times, individuals and businesses have a relatively risk-managed approach to things. In context of cloud computing, many are unwilling to delegate business critical operations (eg: their accounting systems/communications) or personal computing requirements (eg: all their photos/documents/music) to organisations fearing the ‘what if…’ scenario (in case the service provider goes under). In the same context, reluctance also spreads to considering the reliability of these services, and whether or not they will always be available when needed.
It is clear to see how many of these reasons are mitigated with “desktop” computing where the user has responsibility and ownership of data, software, etc.
We have, though, as a society, faced similar challenges in our history. As society developed trade (eg: agriculture and commodities in roman times), the emergence of banks appeared to facilitate this trade which, eventually, evolved to the concept of “Banking” as we see it now, where we, as individuals and as businesses, fully delegate the management of (potentially) our most valuable assets to companies in the full trust that they have the infrastructure, security, and stability to manage and maintain those assets efficiently on our behalf, giving access when and where we demand. While the ‘credit crunch’ has certainly hampered people’s trust of many financial institutions, this delegation still holds true.
Thinking laterally on this, it is clear to see that it takes a great degree of trust for us, as a civilisation, to delegate our assets to these organisations, as without them, we would hoard our money in bags or as physical commodities (eg: gold), and would have to go to great lengths to secure it and transact it. Let us apply this paradigm to computing where, currently, we are in the ‘dark ages’ of the industry and tend to hoard our computing resource physically and are, as individuals/businesses responsible for its safety and security. We also (through laptops, cd’s, vpn’s etc) have to go through great effort to mobilise and transact our data and resource.
The facts are, though, that providers of cloud computing (eg: Microsoft, Google, Amazon, etc) are, potentially, far more equipped than we, to guarantee the security and access of our computing resource and data. Their data centres have incredible levels of redundancy and security, and are specified for future growth with awesome amounts of power. A simple search on google (a cloud in its own right) will reveal the power and capacity of data centres (Microsoft, for example, are adding more than 10,000 servers PER MONTH to their cloud computing capacity). It stands to reason also, that by remotely storing all our applications and data, that access will be easier as, from any internet connected device, we will have instant access to all our business or personal computing. This phenomenon is especially important as globalisation and advances in transport have meant that we, as a global civilisation, are far more mobile than ever before, and as personal computing (ie: in hand or on desk), becomes ever more powerful, and communications become faster and cheaper, we are able to access these resources with the same level of immediacy as if they were physically on our local network or desk. These organisations even build global redundancy into their systems with data and applications being ‘spread’ across massive delocalised global networks and across a chain of data-centres (each of which often costs in the hundreds of millions of dollars).
From a financial and economic point of view, the risk of hosting ones data and applications on cloud platforms is similar to the risk of allowing a bank to manage your money. If the bank suddenly ceased to exist (not withstanding any legislative protection) your ‘virtualised’ assets (ie: your money) would disappear. We do, though, give credence to the scale and scope of banking organisations that, in the main, this is a fairly unlikely occurrence (ie: we psychologically de-risk a banks failure to the point where it is so unlikely, we are largely happy to consider it a non-event). The organisations who provide cloud-platforms often have the same level of scope and scale, many are publicly quoted companies and have similar market capitalisations to some banking organisations (Google currently standing at USD168bn, Microsoft USD257bn and, by way of perspective, Barclays Bank GBP 24bn, HSBC GBP 93.4bn, Bank of New York USD 47bn). When considering these financial figures, the obvious argument is that banks hold physical assets and liquidity (lets take derivatives and so forth out of the equation) providing a great deal of security. This argument is countered with the fact that internationally it is clearly accepted that intellectual property itself is a secure financial asset (proof being the launch of patent brokerage as a financial derivative). Many of these large tech companies also have incredibly strong balance sheets with significant amounts of cash and assets (larger, as viewing their balance sheets will show, than many private banks). My personal view is that if one considers risk, then global banks have a higher proportion of “risky” assets on their balance sheets (eg: credit derivatives and complex structured lending) than their global technology counterparts.
While our generation has grown up with a model of computing based on desktop architecture, the generation which succeeds us are, already, entering a computing environment where software, data, and communications exist as an amorphous on-demand resource provided by a range of companies worldwide. Platforms such as facebook have brought cloud computing to the masses with, at June 2008 “over 24,000 applications built on the platform [facebook] and over 400,000 developers building new social experiences.”. For that generation, then, the psychological constraints which hold ‘incumbents’ back, simply do not exist, and we can learn a lot from their attitude to computing to learn what the future will hold. A future which will impact the way we as individuals, and our businesses, see computing, and interact with data.
The future ladies and gentlemen, is not in our hands, but in the clouds.
Resources:
- Cloud Computing on Wikipedia
- A to Z of cloud vendors
- Live Mesh - Microsoft's cloud platform
- Google Apps - SaS in action
- Structure 08 and Enterprise 2.0 conferences.
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