Nicholas Carr is one of the leading thinkers on technology in the
U.S. A long-time editor at the Harvard Business Review, his article
“IT Doesn’t Matter” caused a sensation in the U.S. technology
industry. His book of the same name established him as a pundit.
His new book, “The Big Switch,” about the coming shift in the
technology industry, reaffirmed that status. He spoke with
Diamond contributor Michael Fitzgerald
Diamond: What is the big switch?
Carr. The big switch has a couple of meanings. We’re switching
from one model of computing to another, from a time when our
software and data would reside inside our PC or company servers
to a time when it is supplied over the Internet from big, central
utilities – the cloud. The second meaning of the big switch refers to
the fact that the Internet is, in essence, a big electrical switch. And
my argument is that the entire Internet is turning into a single
computer that all of us can tap into.
Diamond. Will cloud computing really create cost-savings as
compelling as that of the electrical grid?
Carr. It will provide similar benefits. The cloud model allows
companies to avoid a lot of the capital expenditures and the labor
costs that have until now, been inherent in the idea of corporate IT.
When you begin to think of what you’re able to bypass, it suddenly
looks quite compelling to be able to move to a model where you
pay a particular fee based on your actual usage.
Diamond. At one point in the book, you suggest that a good portion
of the computer hardware business may just disappear. What else
might cloud computing make disappear?
Carr. The corporate IT business has really been built on the ability
of software and hardware companies to sell the same products to
thousands, if not millions of customers, who all run it separately.
What cloud computing implies is that when you centralize a lot of
those things, you’ve fundamentally changed the IT business.
Diamond. Will we still buy PCs?
Carr. You’re going to still need devices to tap into this thing, and
the PC has proven itself to be a very useful, very flexible device.
So I don't think we’ll see them going away. On the other hand, you
can foresee the shift of PCs to being much more like terminals,
where everything they do is supplied from central data centers.
Also, the PC will just be one device that we use. We’ll use our
smart phone, and something in our dashboard of our car; we’ll
have all sorts of ways to tap into the Internet. And that alone, I
think, is going to propel the rise of cloud computing, because
you’re going to want the same applications and the same data
available to all those devices.
Diamond. In the book, you raise the question of whether Microsoft
can keep the profits from its old model alive and flowing long
enough to shift into this new model. It’s been almost a year since
you finished writing – is the answer clearer now?
Carr. I don't think there’s anything that stops Microsoft from being
able to go from selling what it used to sell as packaged software in
more of a service model over the cloud. But these utility services
aren’t going to operate at the same kind of profit margins as
Microsoft has seen with Windows and Office. And it’s going to
face companies like Amazon and like Salesforce.com and like
Google that are actually content to operate at fairly small margins.
It may do what General Electric did when the electric grid came
along. GE used to make all its money by selling the components of
individual generating stations for companies, and when the electric
grid became ubiquitous, it moved into selling all sorts of
appliances that you plug into that grid. Microsoft may be able to
use Xbox and other things to do something similar.
Diamond. Could you run on a cloud in Europe right now?
Interviewee: This is where the cloud metaphor itself begins to
break down. The cloud is actually made up of particular data
centers that are in particular locations. In Europe and elsewhere,
there are restrictions on where you can hold data. And so what it
might mean is that as a supplier, you’ll have to be able to ensure
that the data sits in the data center you operate in Dublin rather
than the data center you operate in Washington State.
Diamond. The idea of cloud computing is not new conceptually. It
goes back to the beginnings of computing, to time sharing, or even
the IBM and HP-driven utility or grid computing push of 2002?
What do you say to skeptics?
Carr. Companies are actually using them now. You look at what’s
going on, and you see that a company like Salesforce.com is
having a lot of success, you see Amazon Web Services getting
huge clients.
Diamond. You make a wonderful case in the book for why the
development of the electrical grid, was so powerful for the
economy of American and elsewhere. But that was atoms, the
cloud is bits. So will it really be as rich a source of innovation, and
as a force for societal change as electrification was?
Carr. The electric grid changed the physical nature of society. The
computing grid’s effects are going to be more on the intellectual
sphere, how we interact with information and each other. Fifty
years from now the world in its structures might not look
massively different, but our culture and our intellectual lives will
probably look quite different.