In a closet in a spare bedroom of my house is a crate of
PC-software programs on CD-ROMs and DVDs. There are dozens of them
neatly wedged into their plastic cases -- financial programs,
graphics programs, encyclopedias, games, business applications and
hobby applications. And they all seem, suddenly, like strange
artifacts from the past.
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.
Our powerful desktop and laptop PCs have been turned inside out.
Most of their value comes not from what's inside them but from the
network they're hooked up to. They've become, essentially,
terminals.
This 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. At 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 to run it. You had to build a waterwheel,
install a steam engine or run your own private electric dynamo.
But as soon as the alternating-current electric grid was built,
people and businesses stopped producing their own power. They just
plugged their machines into the new network. Back then, it was
electricity that turned into a utility served up from central
plants. Today, it's computing that's turning into a centrally
supplied utility.
Changing lives
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 package 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 sites such as
MySpace and Facebook, which have become the core applications that
young people use to organize information and communicate with
friends and colleagues. But the media-ization of software now is
spreading to more traditional programs such as word processing,
spreadsheets, e-mail, photo management, games, and even tax
preparation. Applications such as these are being "broadcast" 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.
Catching up with Google
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 free over the net. Most telling is the company's
generous bid to buy Yahoo, one of the largest online-media and
-advertising firms. Microsoft knows it needs to bolster its
capabilities in advertising if it is to succeed in the software
business of the future, and buying Yahoo would provide it with a
shortcut to its goal.
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.
In other words, those huge server farms 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 tracking the activities and
preferences of people, the temptation to monitor and even
manipulate personal behavior will grow ever stronger.
Continued fragmentation
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 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.
Of course, the value of advertising would grow substantially in
this 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. 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 more efficient, but
we may find that we've sacrificed a little bit of our humanity in
the process.
Cloud living coming sooner than you think
In the perpetually evolving digital space, new terms and concepts are seemingly born every day, which is why the term "cloud living" probably goes way over most people's heads. Don't feel too bad if you're one of those people -- the term is new, even in internet years.It refers to the idea that functions, utilities and data will be hosted in a network -- the cloud -- rather than on personal devices. These devices, networked together via the internet, become terminals by which individuals can access all the data and functions stored in it.
Google's Tim Armstrong explained the topic at the recent 4A's Media Conference, using the example of online banking: A consumer enters his personal information, and -- even though he doesn't know where it goes -- trusts that it will be secure and stores it there. Mr. Armstrong predicts consumers will be increasingly driven to this type of service, and said that it's up to advertisers to reach them there.
It's also transforming the way companies operate and employees collaborate. Rather than e-mail a version of a document and get multiple copies back, all with different edits, the cloud enables all the employees to work collaboratively off the same document, which lives, of course, in the cloud.
The New York Times reports Google, unsurprsingly, is the leader in this technology but that IBM, Yahoo, Amazon and Microsoft have built internet consumer services that use cloud computing.