Technology

Since the birth of the computer industry in the early 1950s the development of technology, and its adoption, has moved in waves.  The initial wave was based on large central computers or mainframes which were focussed on corporate and public sector institutions that could afford the high cost of equipment and the support infrastructure necessary to utilise that computing power.  The second wave was centred on the personal computer which targets individuals and allows all of us to benefit from our own processing capability and to run standard programs in both the office and home. 

In the early 1990s we saw the beginning of the third wave – the Network Wave - which originated around the client/server concept, where personal computers (clients), acting as terminals, were connected to central computers or servers, as we started to call them. At the same time we saw the emergence of the Internet as a concept for interactions over a wider network that would allow computers to communicate with others in remote locations and indeed on the other side of the world.  This networking capability on a wider basis was brought about by the introduction of standard technologies that for the first time allowed diverse devices using this technology to talk to each other through the Internet Infrastructure.

We are currently in a phase of network development that is commonly referred to as Web 2.0.  But what this really means is that the Internet infrastructure and web based applications are now really working to a high degree of reliability.  Although Web 2.0 is driven by the technology, the concept is actually more about communication, collaboration and trade.  Under the banner of Web 2.0 we are seeing an explosion in eCommerce and more particularly online commerce - which includes general corporate trading as well as online banking, insurance and even gambling.  Whilst eCommerce in Europe in 2008 was worth about $200 million the global online commerce activity has been estimated at about $8 trillion.

With some 1.4 billion Internet users worldwide, the term “collaboration” has taken on a brand new meaning and a vast scale.  Collaboration can range from simple sharing of music, videos and games, to blogging, to wikis and to auction activities such as eBay.  But the area of collaboration that is very much in the news currently is the whole social networking concept depicted by MySpace, Facebook, LinkedIn and Twitter.  Social networking enjoyed a 25% growth in unique visitors in 2008.  And although it started very much as a facility for teenagers it is capturing the over 35’s who now make up approximately 40% of users.  Social networking is also moving into the corporate world where organisations are being compelled to set up their own social networking capabilities and even into government where various agencies are using the social networking facilities for a number of public sector functions.  For example MI6 recently launched a series of recruitment ads in Facebook in order to hire new agents as well as other staff – this is a long way from the recruitment process conducted in the shadowy corners of Oxbridge in the 1950’s.

The next, and probably final piece of the development of the network wave, will be the implementation of cloud computing – sometimes referred to as utility computing or on-demand computing.  Cloud computing is a form of outsourcing where vendors supply services simultaneously to a wide array of customers over the Internet.  The services include lots of computing horsepower, storage, software applications and development platforms.

The best way to picture the effect that this shift in technology will have on the world is to relate its introduction to the time in the early 1880’s when the first central electricity generators went live.  Up to then companies had had their own power generators or other forms of electricity creation such as windmills and watermills. It was a highly decentralised and inefficient concept. The delivery of electricity from a central source meant that its price fell rapidly and it brought innovations such as electric light and appliances to home and business.

So if it was Edison that set up the first central generating unit to launch the age of electricity which companies will be responsible for the launch of the real information age?  Many major supplies such as IBM, Cisco, EMC, Amazon and, of course, Microsoft have all made quite significant statements about their developments in cloud computing.  However, it is probably Google that to date has made the most significant investment in terms of building the new information age computer plants.  These are massive facilities (about the size of 8 football pitches) that, for example, can contain up to half a million computers, draw around 1.8 gigawatts from local hydroelectric turbines, are cooled by water from the nearby icy rivers and are located in places that have massive fibre optic connections capacity.

Basically, in cloud computing the network is the computer.  All that is required to access the computing power, storage capability and variety of applications is a simple browser that can be contained within a mobile phone or within a laptop (or increasingly the new netbook computers) or a TV or embedded in different products and devices, such as automobiles, factory equipment, banking terminals and even the human body.

This shift to cloud computing will open up a whole range of new applications particularly away from the office.  Mobile phones, which have already made the shift from voice to data, will now move to “doing” with applications such as location augmentation, payment services and sophisticated games.  We will enter a world of connected “things” where different devices are able to talk to each other and make intelligent decisions based on particular circumstances.

The environment will also benefit substantially from the implementation of cloud computing.  The number of power hungry data centre server and storage devices that are spread all over the world will gradually be centralised in energy efficient cloud facilities.  As consumers and office workers we will be using many more “green” devices such as netbooks, smart phones and memory sticks.

So as companies hunker down to worry about reducing costs and preserving their hard earned cash, they should keep one eye on the future and look forward to the time when they can operative virtually. With a headquarters in Bermuda, manufacturing in China, administration in India, finance from Russia, employees at home, marketing by Google, computing by Amazon, delivery by DHL and sales by eBay, the organisation of tomorrow is likely to be very different from those that are struggling to survive in the current recession.  The catalyst for many of these changes will be brought about by the next phase of the networking wave – cloud computing.


Source: Peter Rowell, Executive Chairman of Regent Partners International

www.regent.co.uk

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