Cloud Living

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Sometime in the past few years, most of us began to change the way we use our personal computers. We stopped going out and buying new software programs and installing them on our hard drives. Instead, we started using the Internet as our computer, tapping into the vast quantities of software and data flowing through the network.

The rise of what geeks call "cloud computing" is not without precedent. What's been happening to computers in the early years of this century mirrors what happened to mechanical power at the start of the last century. Through the end of the 1800s, if you wanted to run a machine in your factory or your home, you had no choice but to generate the power needed to run it. But as soon as the alternating-current electric grid was built, people and businesses stopped producing their own power. They just plugged their machines and appliances into the new network. Cheap, plentiful electricity changed society and culture, spurring the rise of mass media, mass consumerism, and modern advertising. We can expect that cheap, plentiful computing will have similarly far-reaching consequences, once again overturning many of our assumptions about how we work and live.

One change that's already obvious is the blurring of the line between software and media. Consumer software, until recently sold like a packaged good, is becoming the next great media business. The success of a software program is coming to be judged not by unit sales but by the ability of the provider to attract an audience, hold that audience's attention with interesting data and tools, and deliver relevant ads to it. We've seen this phenomenon with social networking programs like MySpace and Facebook. But the media-ization of software is now spreading to more traditional programs like word processing, spreadsheets, email, photo management, games, and even tax preparation. These and many other applications are being "broadcast" for free over the Net and supported by advertising.

The gorilla in this nascent market is Google. It has been spending billions of dollars to build huge data centers, or "server farms," around the world, enabling it to run all sorts of consumer software and store enormous quantities of personal data. Combine that processing muscle with the company's dominance of web searching and advertising, and you have a juggernaut capable of redefining the software business on the media model.

Traditional software companies are not sitting still. Microsoft, long the leader in packaged PC software, is following Google's lead in constructing server farms and has even begun delivering some of its programs over the net for free. Most telling is the company's generous bid to buy Yahoo!, one of the largest online media and advertising firms.

But if the software business is beginning to look like a media business, the media business is also taking on characteristics of the software business. As the internet becomes not only our universal computer but also our universal medium, the ability to use software code to collect and filter content, tailor programming, analyze audiences and serve ads becomes central to media success.

Those huge server farms, in other words, are not only transforming the software industry. They pose big and growing competitive threats to many traditional publishing, broadcasting and advertising firms. The media business has already gone through wrenching changes, thanks to the web, but the upheaval is just in its early stages.

There are dark sides to the blurring of media and software. As companies become more adept at using data mining and other software techniques to track the activities and preferences of people, the temptation to monitor and even manipulate personal behavior will grow ever stronger. Difficult questions about privacy and even freedom will remain to be answered. We are also likely to see a continuing fragmentation of media and audiences, as sophisticated software algorithms are used to create custom bundles of content geared to individual preferences. Google has said that it wants to store "100% of a user's data" inside its data centers, enabling it to achieve what it calls "transparent personalization." At that point, the company would be able to automatically choose which information to show you, and which to withhold, without having to wait for you to ask.

Needless to say, the value of advertising would grow substantially under such a scenario. But what would happen to the common culture that provides the glue for society? The mass media that emerged from the electric grid a century ago had plenty of flaws, but it did help to bring people together with shared experiences. Our new computing grid promises to reprogram not only advertising and marketing but also culture with the cold logic of software code. Everything will become much more efficient, but we may find that we've sacrificed a little bit of our humanity in the process.

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