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Milestone Group Quarterly: January 2008

 

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By Invitation:

Programming the World Wide Computer by Nicholas Carr

 

Back in the 1990s, Sun Microsystems coined the marketing slogan: “The network is the computer.” It was catchy but, for most of us at the time, meaningless. The network wasn’t our computer; the PC on our desk was our computer. Today, Sun’s slogan suddenly makes sense. It perfectly describes what computing has become, or is becoming, for all of us.

 

The network—the Internet, that is—has become, quite literally, our computer. The different components that used to be isolated in the closed box of the PC—the hard drive for storing information, the microchip for processing information, the software applications for manipulating information—can now be dispersed throughout the world, integrated through the Internet, and shared by everyone.

 

The World Wide Web has turned into the World Wide Computer.

 

If you need evidence, just look at how you’re using the PC today. If you’re like most people, you’re relying much less on the data and software stored on your hard drive and much more on services supplied over the Net. The entire “Web 2.0” boom is built on the ability to supply sophisticated software from big, central data centers and to deliver it through the Web browsers of users.

 

The trend is now expanding rapidly into the business world, as software is supplied as a subscription service by pioneers like Salesforce.com, and as storage space and raw computing power are delivered as pay-as-you-go utilities by innovators like Amazon Web Services.

 

According to the consulting firm McKinsey & Company, 61 percent of large companies planned to use at least one utility-computing service during 2007 – a dramatic increase over the 38 percent who expressed similar plans just a year earlier. Gartner forecasts that software-as-a-service will represent 25 percent of the vast business software market by 2011. To hasten the trend, suppliers like Google and Microsoft are spending billions of dollars a year to build the vast “server farms” that power the World Wide Computer.

 

Google CEO Eric Schmidt, Sun’s chief technology officer back when it came up with its prescient slogan, has a different term for the World Wide Computer. He calls it, “the computer in the cloud.” What he means is that the computer, as we use it today, no longer has any concrete form. It exists in the Internet’s ever-shifting “cloud” of data, software, and devices. Our personal computer, not to mention our BlackBerry, our iPhone, our gaming console, and any other networked gadget we use is just another molecule of the cloud, another node in the vast computing network. Our PCs have merged with all the other devices on the Internet.

 

That gives everyone using the World Wide Computer enormous flexibility in tailoring its workings to his or her own particular needs. You can vary the mix of components—those supplied by utilities and those supplied locally—according to the task you want to accomplish at any given moment.

 

Put another way, the World Wide Computer, like any other electronic computer, is programmable. Any business, indeed any individual, can write instructions to customize how it works, just as any programmer can write software to govern what a PC or a server does. From the user’s perspective, programmability is the most important - the most revolutionary - aspect of utility computing. For the corporate CIO, it means a wealth of new choices in assembling information systems to fill business needs. Companies are no longer locked into their private data centers. For the consumer, it promises an explosion of new products that draw on the Internet’s vast stores of data and software—not just Web 2.0 services like Facebook or Flickr but entirely new Net-connected physical appliances. Amazon’s ebook reader Kindle and the Chumby “Internet player” are early examples of the kind of networked devices that will proliferate in the years ahead.

 

The construction of the alternating-current grid a century ago made electricity cheap and plentiful for all. That brought a tidal wave of innovation in consumer goods and set off a chain reaction of economic and social changes that transformed how people live and work. Today, the creation of our new computing grid is about to touch off an equally far-reaching revolution. It is no exaggeration to say that figuring out new and distinctive ways to program the World Wide Computer will be the central enterprise of coming decades.

 


 

Nicholas Carr is the author of the new book The Big Switch: Rewiring the World, from Edison to Google. He is also the author of the controversial 2004 book Does IT Matter? and has contributed articles to the New York Times, Financial Times, Strategy & Business, and Wired. Earlier in his career, he was executive editor of Harvard Business Review. Nick speaks frequently on issues of technology and business and writes the popular blog Rough Type.

 

Dear Reader:

This first issue of Milestone Group Quarterly for 2008 covers the growing influence of social media and Web publishing. It’s no secret that the Web is displacing traditional media and technology platforms. But contributors to this month’s issue make a compelling case for the Web as more than a communications platform; but as a means to developing socially commercialized business opportunities.

 

That makes sense to us, as we see companies place greater value on social media in their marketing and sales plans. Anecdotally, the tech community’s quick embrace of Facebook late last year shows that a social media company has to worry less about adoption, and more about monetizing a social network.

 

Again in this issue, we’ve assembled an impressive line-up of contributors, including:

Sonja Hoel Perkins – A partner at Menlo Ventures, Perkins advises entrepreneurs and investors to think of Google as the Microsoft of years past. If your business plan is a “me-too” approach to a place Google touches, don’t expect venture enthusiasm.

 

Nick Carr – With a new title on the horizon, the author of Does IT Matter? shows us why we need to think less about the World Wide Web and more about the World-wide Computer.

 

Heather Harde – The new CEO of TechCrunch offers a view from one of the Web’s most influential publishers. Readers of Milestone Group Quarterly are familiar with TechCrunch’s success and Harde imparts some valuable insight into building traffic and ad revenue.>

 

Chris Kocher – Milestone Group’s Kocher takes a look at the state of social media fresh from last month’s Asia America Multi-technology Association Conference. And if you don’t believe that Facebook and others aren’t set to commercialize social media, you will after reading Kocher’s piece.

 

While on the subject of social media, check out our new Web site at: www.milestone-group.com. You’ll find more thoughts on social media on our blog and in the case studies offered on the site.

 

Please be sure to tell us what you think of the site, or on any of the subjects we cover. There’ll be plenty of chances. In the coming weeks, we’ll be on panels at GSM World in Barcelona and CTIA in Las Vegas. I’ll be moderating a panel on Monetizing Web 2.0 at the Stanford Entrepreneurs Conference.

 

The coming year looks to be a challenging one, given events in the global economy. Market leaders will relentlessly focus on their cost structure, remain obsessive on top-line revenue growth, and stay passionate on meeting customer needs.

 

Not to mention looking for quality information from informed sources. Like that we feature in Milestone Group Quarterly.

 

Up and right,

 

Mark Zawacki

Publisher

 

 

 

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