Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
In The Big Switch you write about the wall socket as a clear demarcation point between the utility and the user, noting that such a point is lacking in the computing world. What's the relevance of that socket to IT management?
Carr: An important question is, how do CIOs and IT people help their companies make a successful transition from the world of the private computing operation to the utility age?
Think about the electrical socket. We always knew precisely where it would go: between the generating capacities of the utilities and the application of the current. The application of the current always had to occur locally; it wouldn't do you any good to run a vacuum cleaner in your electric utility.
With IT, it's a very different matter; even the applications can be served up as the utility service. That tells us that companies can put the equivalent of the electrical socket, the data socket, anywhere they want. They can begin to get certain elements of their IT requirementswhether it's raw computing power, data storage or various applicationsover the network as utility services. But they also can supply any or all of those things locally from their own data centers.
One of the big challenges for IT departments is to figure out which elements they want to supply locally, which they want to get from the grid and how that mix will change over time as the utility offerings mature, proliferate and become cheaper. Determining where you put the data socket, and where you move it over time, is going to have a big affect on how efficiently and effectively companies are going to use IT into the future.
Do you foresee changes in society of the magnitude caused by the electric grid?
Carr: Whenever you change the supply model for a resource, a product or a service that is crucial to society, you change a lot of the trade-offs that determine how people work, live and entertain themselves and shop and connect with other people.
We're going to see that, just as the electric grid dramatically expanded the availability and reduced the cost of mechanical power, and that led to all sorts of knock-on effects: the way society is organized, the way we think about education, the way we think about consumerism. We'll see similar effects as we're all essentially hooked up to this one huge worldwide computer, this Internet-based supercomputer that all of us share.
We're seeing the early signs of the changes when you look at the disruptions in the media business. It makes sense that would be an early indicator of the seismic shifts going on, since the products are pure information.
Whether you look at record companies, or newspapers, or increasingly at movie studios and television studios, you see what happens when all of this stuff gets very, very cheap. They're compet ing against free products, sometimes, often products produced by amateurs or volunteers.
Employment will be affected as computer automation expands into new areas. One reason we've seen an increasing concentration of wealth over the past 20 years is because of computer automation, and that trend will only accelerate.
An area I don't think peopleespecially politicianshave particularly thought through is what happens when a lot of the data and equipment crucial to your economy can be suddenly moved anywhere in the world. In my book I refer to the possibility of Cold War 2.0, as countries struggle with the political and national security implications of this vast computing grid.We're a long way from knowing how the economic and political consequences of this new machinery will play out.
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