The Cloud and the Industrial Revolution: Commoditization and Innovation

Recently, I was featured in AllThingsD, discussing the opportunities and innovations still to come from cloud computing, likening the state of the cloud industry to the Industrial Revolution. Similar to how the Industrial Revolution completely changed the entire world’s economy, so, too, will the cloud.

Prior to the Industrial Revolution, manufacturing and the production of goods was comparatively inefficient and disorganized. The advent of steam power through coal and then oil-powered energy dramatically changed things. How? Well, both coal and oil are far denser stores of energy than wood and other energy sources used previously (like water and wind for milling grain). It made manufacturing a lot more efficient, allowing the transport of energy across vast distances in a concentrated form. It could then be stored and used to run mechanized production.

Similarly, the Internet could be thought of as a very efficient mechanism for transferring and connecting data. It has therefore transformed the efficiency with which society uses and moves data, producing clearly-evident results. As an extension of that, public cloud computing both raises the efficiency by which computing hardware is utilized (from around 20-30 percent in a typical enterprise to 70-80 percent in the cloud) and effectively makes computing much less location dependent. It, therefore, liberates computing as a resource and doubles efficiency through which that resource is delivered. Following this, it is not too far a leap of faith to predict that it, too, will have a profound effect on computing, technology in general and wider society.

We mustn’t forget that computing as a resource drives the world economy and our societies more profoundly today than oil. Significantly, the fastest growing and greatest value-creating areas of modern economies rely heavily on computing power. These are industries such as genetics, pharmaceuticals, technology services and also big science. With this massive increase in accessibility to much-needed computing resources, plus an acceleration of falling prices, one can only imagine the ripple effect this will have on innovation and development.

Already, this model has assisted an entirely new generation of startups as well as internationally-recognized institutions like ESA, EMBL and CERN, in solving some of the world’s most challenging problems. Since moving to CloudSigma’s public cloud environment, these groups have been able to pick and choose the compute resources conducive to their research needs, thereby allowing them to cost effectively enhance critical discoveries around climate prediction, genetics analysis and high-energy physics. Additionally, for the first time, people and organizations on smaller budgets can spin up large scale infrastructure to test hypotheses and make new discoveries.

As a result, entire industries are innovating faster, which will directly impact every facet of our lives going forward, similar to that of the Industrial Revolution. If you’re interested in exploring this topic further, I invite you to read my full article in AllThingsD: Cloud: The Next Industrial Revolution.

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