Nick Carr made his name with the provocative Harvard Business Review article “IT Doesn’t Matter” (free version here), its expansion into a less definitively titled book Does IT Matter? and his generally erudite blog. The charge of irrelevance hit the industry hard and elicited mostly incoherent and ineffective rebuttals (e.g. “hogwash”), which hampered real discussion of Carr’s argument.
I have gently mocked his thesis previously but found it a mix of the obvious (yes, things get commoditized over time, so you focus on the top of the stack and of course further commoditize the rest of the stack) and the ridiculous (IT had apparently previously been a source of everlasting strategic differentiation, but with the democratization of computing making technology widely available, we should write off the industry in its entirety). It is like arguing that since everyone has a brain, don’t bother thinking…
Carr has a new book, The Big Switch: Rewiring the World, From Edison to Google, in which he contemplates the future of computing and speculates on the broader societal impact of that future. The book is lucid, well-written and uses lots of historical examples to make the narrative and arguments come alive. The first half of the book looks back at the evolution of the electrical industry and argues the computing industry will follow the same path. The later half offers up social, economic and cultural consequences of the shift, again using electrification as an example of how new technologies have secondary and unforeseen effects. Carr is less than excited about the consequences of the technology path he believes is inevitable– no one will mistake him for an Internet optimist.
Back in the 19th century, companies generated their own power locally, whether through water, steam or early electrical generation. The advent of alternating current meant power could be generated remotely and transmitted afar, allowing companies to get out of the power business and buy electricity from the new electrical utilities.
Carr tells the story of Thomas Edison and his former clerk Samuel Insull. Edison, with his bet on direct current which didn’t lend itself to long distance transmission, focused on small-scale generators that ran “on-premise”. His model was to sell every business equipment to generate their own electricity. Insull predicted the rise of the electrical utility, foresaw it would eclipse the equipment business and left Edison to join what became Commonwealth Edison. (Empires of Light is a great account of the battle between Edison and direct current versus Tesla and Westinghouse who championed alternating current).
By offering electricity to multiple customers, utilities could balance demand and reap economies of scale that drove a virtuous cycle, allowing them to drive down the cost of power and thereby attract even more customers. Their strategy was predicated on maximizing generator utilization and the standardization of electrical current. Companies that outsourced their power generation to utilities no longer had to worry about generating their own electricity, reducing cost, staff, technology risk and management distraction.
Turning towards computing, Carr reprises his “IT Doesn’t Matter” death knell: IT is an infrastructural commodity that every company has access to, so there is no differentiation available, which means it is a dead cost. He recounts the history of computing, showing a particular fondness for the punch card, and excoriates the industry for cost, complexity and waste. Siebel is the chief punching bag (while deservedly so, it is an easy target).
His future trajectory for the industry has the Internet playing the role of alternating current, allowing computing to be performed remotely which in turn enables a new breed of computing utilities (with Amazon Web Services, Google and Salesforce as early poster children). The end result is companies no longer have to run their own complex computing operations. He calls this new era of computing the “utility age” and states “the future of computing belongs to the new utilitarians”.
Enterprise computing vendors who sell “on-premise” solutions will be marginalized like Edison, unless they can reinvent themselves (as Edison’s company ultimately did, shifting both technology and customer allegience – they’re still around today, a little outfit called General Electric). Carr dwells on Microsoft’s recent embrace of cloud computing, but questions whether the company can navigate the difficult transition of embracing a new model while continuing to harvest profits from the old model.
Is the Big Switch Big or Not?
I have two critiques of the first half of the book. The first is mild schizophrenia. The Big Switch is — wait for it — as follows:
“In the years ahead, more and more of the information processing tasks we rely on, at home and at work, will be handled by big data centers located out on the Internet.”
Wow. Gather now at the knee of the S-curve to learn what the future holds. Perhaps he is aiming the book at a more general audience, but with over a billion people regularly accessing the Internet, there are an awful lot of people who have already made the “big switch”. He does some hand-waving about broadband penetration to explain why the book isn’t over a decade late, with no mention of the failure of the late 20th century’s application service providers.
Carr can’t quite decide whether the big switch to his utility age is a revolution or not. He equivocates about whether a wave of creative destruction is crashing down today or if it will take decades to play out. He also qualifies the move to the cloud and how far it will go with suggestions that the future may actually consist of cloud-based services working in conjunction with local computers in corporate data centers and/or local PCs. This qualification I think stems from his general tendency to paint everything with a very broad brush. In practice, there are many segments and technologies, each with their own dynamics. He also plays fast and loose with topology, enlisting highly distributed examples to support a centralized thesis.
The Fallacy of the Perfect Analogy
My second critique is that the book turns on the idea that computing is basically similar enough to electricity that it will inexorably follow the same path. While there are similarities, it is a mistake to assume they are alike in every aspect. There are enough differences that blind adherence to an analogy is dangerous:
- Electrons are fungible, CPU cycles arguably are, but information is not fungible. While the flow of electrons could be standardized, the flow of information can’t. His tendency to blur, conflate or confuse hardware and software, clients and
servers and individuals and IT doesn’t help.
- Even when you do computing remotely, you still compute locally as well. A search engine query, for example, gets run in a giant data center somewhere off in the cloud, but there is still processing that happens locally to submit, display and act upon the results. The browser is hardly a dumb terminal and the trend is to exploit even more processing locally for cloud-based applications (with AJAX and RIA techniques). Further, there are strong business incentives to use local code to differentiate the user experience and allow eyeball businesses to push interaction rather than just relying on user pull. Computing is likely to be much more distributed than electricity production, especially when you consider…
- I am not aware of a dynamic like Moore’s Law (and similar rapid improvements in storage capacity and bandwith) for electrical generation, which both projects significant performance improvements over time and introduces the concept of relative scarcity and abundance. This dynamic undermines the parallel of CPU utilization and generator utilization. Those who best exploit relative abundance and put the processing closest to the data will prevail (I remain a Jim Gray disciple).
- Distance still matters at scale. For the same reason that the aluminum industry located near cheap sources of electricity, the algorithm for siting new new half-billion-dollar data centers looks at proximity to both cheap power and end customers. Likewise, Akamai offers proximity with its edge caching network, which in turn means lower cost and more responsive services.
- Just as the computing industry is looking longingly at the electrical utilities, the electrical utilities are envious of the more distributed nature of the computing industry. A less centralized and more intelligent electrical grid promises greater efficiency and resiliency. The availability of real-time pricing information can increase conservation and reduce peak-loads. Distributed generation allows locally produced power to be sold back to the grid, making alternative energy sources more compelling. Digital power opens up new, differentiated offerings for utilities based on the quality of power. And a more decentralized grid means that a single point of failure doesn’t take down power for 50 million people. All these trends suggest the electricity industry will look more distributed and information-rich in the future.
- There are probably other relevant differences as well.
So while the book gets the broad trend to more computing in the cloud right, Carr’s extended analogy obscures a lot of the differences and subtleties that will make or break cloud computing endeavors. Between the caveats and the broad definitions, there is a lot of leeway in his technical vision (admittedly the mark of a savvy forecaster). Victory will go to those who best exploit both the cloud and the edge of the network. Carr’s own examples — Napster, Second Life and the CERN Grid — make this case, even if he either misses their distributed nature or chooses to ignore it.
Utility, Not Utopia
The second half of the book focuses on the broader social and economic consequences of the move to utility computing. It is the bolder and more thought provoking part of the book.
Carr again begins by looking back through the lens of electrification. He succinctly credits electrification with ushering in the modern corporation, unleashing a wave of industrial creative destruction, improving working conditions by displacing craftsmanship for the modern assembly line and the gospel of Frederick W. Taylor, improving productivity which begat a broad middle class and white collar jobs to coordinate more complex organizations, the broadening of public education, expanding demand for entertainment, and enabling the suburbs (cheap cars relied on cheap electrical power to power the assembly line).
He also notes that the early years of electrification were accompanied by great optimism and even utopianism about what the future would hold. Carr, however, leaves his rose-colored glasses at home as he ponders his utility future:
“Although as we saw with electrification, optimism is a natural response to the arrival of a powerful and mysterious new technology, it can blind us to more troubling portents…. As we will see, there is reason to believe that our cybernetic meadow may be something less than a new Eden.”
Carr basically finds his utility future dystopian. He spends the remainder of the book worrying about:
The Hollowing Out of the Workforce – the utility future has little need for workers, which reverses the positive virtuous cycle of employment driven by electrification. He points to increasing returns businesses like YouTube, Skype, craigslist, PlentyofFish and giant data centers with small staffs leading the way “from the many to the few”. They are free riders on a fiber backbone paid for by others and are ushering in a world where “people aren’t necessary”. “Social production” (aka “user-generated content”) is simply digital sharecropping and reduces the need for workers further. Unlike electrification which “played a decisive role” in building an egalitarian society, the utility age “may concentrate wealth in the hands of a small number of individuals, eroding the middle class and widening the divide between haves and have-nots”.
The Decline of Mainstream Media – while electrification “hastened the expansion of America’s mass culture” and gave rise to mass media, the Internet is undermining the media with its explosion of voices and “some of the most cherished creative works may not survive the transition to the Web’s teaming bazaar”. Newspapers are of course the foremost example. The shift from scarcity to abundance of content is not a good thing to Carr and “the economic efficiency that would be welcomed in most markets may have less salutary effects when applied to the building blocks of culture.” The result is a decline of media and shared culture, the polarization of virtual communities (exacerbated by personalization engines) , “social impoverishment and social fragmentation”.
Bad Guys – the Internet in the utility age promises to be a magnet for bad guys, including criminals, terrorists, botnet operators, spammers, perpetuators of denial of service attacks and fiber optic cable-snapping earthquakes. The underlying infrastructure is fragile and vulnerable yet critical to the global economy. This was the least forward-looking of his pessimistic projections. He mostly reiterates issues. About the only new claim about the future was that pressure to protect the Internet from “misuse and abuse” will stress the sovereignty of nations as utility functions migrate to countries with the lowest operating costs. He is surprisingly silent on whether we should expect the heavily regulated nature of electrical utilities to also apply to computing in the future.
Privacy and the Control Revolution – don’t even think about having any privacy in the utility age:
of us are aware of the extent to which we’ve disclosed details about our identities and lives or the way those details can be mined from search logs or other databases and linked back to us.”
Carr believes computing always has and always will be fundamentally a tool of oppression for the Man, the computing revolution is really just part of a broader “Control Revolution” and the empowerment of the personal computer will be “short-lived” as the Man inevitably reasserts control:
“The sense of the Web as personally “empowering”…is almost universal. … It’s a stirring thought, but like most myths its at best a half-truth and at worst a fantasy. Computer systems in general and the Internet in particular put enormous power into the hands of individuals, but they put even greater power into the hands of companies, governments, and other institutions whose business it is to control individuals. Computer systems are not at their core technologies of emancipation. They are technologies of control. They were designed as tools for monitoring and influencing human behavior, for controlling what people do and how they do it. As we spend more time online, filling databases with the details of our lives and desires, software programs will grow ever more capable of discovering and exploiting subtle patterns in our behavior. The people or organizations using the programs will be able to discern what we want, what motivates us, and how we’re likely to react to various stimuli. They will, to use a cliche that happens in this case to be true, know more about us than we know about ourselves.”
Carr is particularly full of disdain for the PC as a device but is conflicted about personal computing. He readily acknowledges the empowering impact of personal computing, yet simultaneously promotes a dumb terminal future while lamenting the inevitable reassertion of control by the Man (somehow those seem related…).
He concludes on the cheery note that the utility future is no less than another front on “humanity’s struggle for survival”. Actually, I took that quote from the Gears of War 2 announcement, but it would not be out of place in Carr’s conclusion. He fears the utility age may devalue quintessential human attributes, making us (even) more superficial, undermining the coherence of the family and relegating us to mere “hyperefficient data processors, as cogs in an intellectual machine whose workings and ends are beyond us”. Bummer, dude.
The second half of The Big Switch is kind of a dour read and the utility future is boldly painted with a Luddite, elitist and generally defeatist brush:
“…we may question the technological imperative and even withstand it, but such acts will always be lonely and in the end futile.”
In a book full of references to big thinkers, from Jean-Jacques Rousseau to Alexander Solzhenitsyn, Ned Ludd does not merit a mention, even though the Luddite fear of automation hollowing out the workforce is repeated almost verbatim. He doesn’t acknowledge the parallel or make a case for why the Luddite fears are more warranted now, despite failing to come to pass in the Industrial Revolution.
And while he bemoans the rise of “a new digital elite”, the shifts in media, and survival of our “most cherished” work, he manages to come across as an elitist himself (not that there is anything wrong with being an elitist of course…). I’m just not sure the Brahmins get to decide what is and isn’t worthy media.
It is hard to argue with his position on privacy (read No Place to Hide to shatter any lingering techno-optimism on this front — large-scale databases go awry, period), but he doesn’t make the case that the black helicopters of the Control Revolution are just over the horizon. Individual freedom is pretty much at an all-time high in world history and information technology gets at least some credit for that. Carr does admit technology is “dual use”, but you won’t find much on the positive uses in the book.
The Big Switch is well worth reading if you’re thinking about the evolution to cloud computing. It provokes and stimulates as this long-winded review shows. Carr’s technical foundation is shaky, but he is a good social critic and forecaster, and a great polemicist (and that is a compliment). My view is Carr’s dystopian future is not inevitable, but averting it will take a conscious and proactive effort. If nothing else, the later part of the book is a call to arms for what must be avoided. If the Control Revolution is indeed a revolution, it is time for a counter-revolution.