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01.08.08
IT From A Different Angle
 By Ross Mayfield
Nick Carr's new book, The Big Switch, takes on IT from a different angle and rests upon a metaphor -- that IT will not matter because it will move to grid computing in the same way electricity moved to the grid.
From the first chapter:
If the electric dynamo was the machine that fashioned twentieth century society - that made us who we are - the information dynamo is the machine that will fashion the new society of the twenty-first century.
And a Network World interview:
Carr explains that factory owners originally operated their own power plants. But as electric utilities became more reliable and offered better economies of scale, companies stopped running their own electric generators and instead outsourced that critical function to electric utilities...
"Some of the old-line companies will succeed in making the switch to the new model of computing; others will fail," Carr writes. "But all of them would be wise to study the examples of General Electric and Westinghouse. A hundred years ago, both these companies were making a lot of money selling electricity-production components and systems to individual companies. That business disappeared as big utilities took over electricity supply. But GE and Westinghouse were able to reinvent themselves."
Now I'm quick to liken computing to a commodity. And Carr is right about the general trend line. But with a bit of experience in commodity bandwidth, as a provider of SaaS and Managed Service Appliances, I can say there is something very different at play when it comes to enterprise computing and energy. The difference is that bandwidth carries something of subjective value to sender and receiver.
From the buy side, enterprises will believe in firewalls at the edge of their networks and centrally managed infrastructure for a long time. Perhaps its just easier to not outsiders, if not their own employees, to create their own firewalls around them. It will take a long time for this perception, and the vested interests to vest, for this to change. And for every economic benefit argument of shifting to the grid
From the sell side, let me share something I learned from sharing a very personal namespace. There happens to be another Ross Mayfield, so I reached out to him over the net out of obvious interest. The former Pepperdine professor and security expert had come up with Mayfield's Paradox:
The cost of security is the greatest for the many or few in this well curve. Sellers of grid computing will have the greatest cost of ensuring its security.
Now, I don't believe that this cost will be prohibitive for providing grid computing as a utility to third parties. But I do believe the cost of providing utility service plus utility service will be greater than the cost of providing behind the firewall virtualized datacenter service and security. Or at least, the perception of it.
With Socialtext, we take the position of offering both options for topological deployment, while retaining the benefits of SaaS connectedness to our customers. See Phil Wainwright's article. The only vendor I don't think will end up there is Salesforce.com, because its their brand.
Carr is right about where we are heading, but it will take time. But in the meantime, it makes for a fun argument for years to come.
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About the Author:
Ross Mayfield is CEO and co-founder of Socialtext, an emerging provider of Enterprise Social Software that dramatically increases group productivity and develops a group memory.
He also writes Ross Mayfield's Weblog which focuses on markets, technology and musings.
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