Economist article on cloud computing

The wife and baby are in Wisconsin this week visiting relatives while I head to EDUCAUSE in Orlando. There might be more blogging as a result.

The Economist has a piece this week on cloud computing. It's a pretty good overview of the concept for those who haven't been following it closely. Overall, however, I think it overemphasizes what I would call the raw, technical aspect of the phenomenon and under-emphasizes network-effects angle.

The idea of highly flexible computing power is a pretty cool one, and the piece cites an Amazon Web Services case study demonstrating just that. Using AWS, a Washington Post Engineer built a digital library of a massive collection of potentially newsworthy government documents about Hillary Clinton in nine hours. What a contrast to the timelines we're used to in libraries!

The most powerful aspect of the cloud computing phenomenon, in my opinion is the aggregation of data and the network effects that rise as systems get larger. The key feature of a cloud application is that it's data is part of a greater organic whole, and that it's able to do things that an isolated application can't. This is where the distinction between Web 2.0 and Cloud Computing gets fuzzy. The piece starts to touch on this concept when it brings up Tim O'Reilly

A raft of start-ups is also trying to build a business by observing its users, in effect turning them into human sensors. One is Wesabe (in which Mr O’Reilly has invested). At first sight it looks much like any personal-finance site that allows users to see their bank account and credit-card information in one place. But behind the scenes the service is also sifting through its members’ anonymised data to find patterns and to offer recommendations for future transactions based, for instance, on how much a particular customer regularly spends in a supermarket. Wireless devices, too, will increasingly become sensors that feed into the cloud and adapt to new information.

We now use Mint to track our home finances...for some reason we didn't like Wesabe. It knows how to categorize purchases on our credit card statement because it picks up on the ways other users categorize purchases with similar labels. Much nicer and easier than using Quicken used to be.

The piece brings up a concept of "industry operating systems" that will arise to allow businesses to become more modular and flexible, while relying more heavily on the services of others.

Both trends could mean that in future huge clouds—which might be called “industry operating systems”—will provide basic services for a particular sector, for instance finance or logistics. On top of these systems will sit many specialised and interconnected firms, just like applications on a computing platform.

This is interesting to contemplate. You could almost argue that Flickr fits this model. It provides the basic operating system and then so many other firms jump in and provide specialized services image service: prints, calendars, cards, etc. In this case the industry is totally virtual.

I liked this quote:

Twenty years ago, he argues, 80% of the knowledge that workers required to do their jobs resided within their company. Now it is only 20% because the world is changing ever faster.

There's a parallel here with libraries. We've seen a similar flip in terms of information residing in-house vs. outside. We're preparing students for the business world where information is also in the cloud.

I've been reading the Economist for 20 years now but I've come to realize that they are a bit technologically stodgy. Their online stories have no hyperlinks within them.