The October 25 issue of The Economist includes a special report on cloud computing - seven articles plus an introduction. It is an in-depth look at this new model of computing, its implications, its value promise to companies and societies, as well as the pitfalls against which we have to guard.
"In the beginning computers were human. Then they took the shape of metal boxes, filling entire rooms before becoming ever smaller and more widespread. Now they are evaporating altogether and becoming accessible from anywhere."
"That is about as brief a history of computers as anyone can make it. The point is that they are much more than devices in a box or in a data centre. Computing has constantly changed shape and location - mainly as a result of new technology, but often also because of shifts in demand."
He then goes on to define cloud computing:
"Now, this special report will argue, computing is taking on yet another new shape. It is becoming more centralised again as some of the activity moves into data centres. But more importantly, it is turning into what has come to be called a 'cloud', or collections of clouds. Computing power will become more and more disembodied and will be consumed where and when it is needed."
"The rise of the cloud is more than just another platform shift that gets geeks excited. It will undoubtedly transform the information technology (IT) industry, but it will also profoundly change the way people work and companies operate. It will allow digital technology to penetrate every nook and cranny of the economy and of society, creating some tricky political problems along the way."
The subsequent articles explore the implications of cloud computing to the IT infrastructure and data centers, to applications and software, and to the way people will communicate with the cloud, before going on to consider the impact of the cloud on the IT industry, businesses and the economy as a whole.
The overriding message in the special report is that computing is being disaggregated into its basic components - services. We are seeing the rise of what some call an Internet of Services. In the same way that the Web can be viewed as an Internet of Content, the Cloud is the name or metaphor we have chosen for this emerging Internet of Services.
"It follows naturally from the combination of ever cheaper and more powerful processors with ever faster and more ubiquitous networks. As a result, data centres are becoming factories for computing services on an industrial scale; software is increasingly being delivered as an online service; and wireless networks connect more and more devices to such offerings."
Why is the technology-based industrialization of services such a big deal? Let me use Ludwig Siegele's brief history of computers as a model for my personal brief history of services.
In the beginning, all services were performed by humans for humans. Then computers came along, and started performing a few of those services for humans, starting with repetitive, deterministic transactional services. They then moved on to less well defined, more personal office and communications kinds of services. Then one day, the Internet appeared on the scene and helped us apply computers to more and more services. We developed many innovative web-based services or e-services.
Then, about a year ago, the Cloud showed up, and started us on the path of industrializing everything about e-services through the application of more advanced technologies and more rigorous science, engineering and management methodologies. This is an absolutely critical step given our vision to offer millions of e-services to billions around the world, through a large variety of devices. It is equally essential if we hope to make our planet - its people, companies, industries, economies and governments - increasingly smarter by collecting, analyzing and acting on information from trillions of devices, sensors and things.
We have a long way to go in this historical journey toward significantly improving the productivity and quality of services and the service sector. The service sector accounts for about 2/3 of the GDP of the world at large, over 70% in the European Union, Japan and Mexico, and close to 80% in the US.
Over the last few centuries we have made huge advances in the productivity of the agricultural and industrial sectors, advances which were then translated into improved standards of living for a large number of people around the world. The only way to continue these advances in the standard of living of more and more people around the world is to attack the inefficiencies in this very large sector of the economy. This is one of the most important challenges in our emerging knowledge age, and the reason many of us are so excited by the prospects of cloud computing - including now The Economist.