Eyes on the sky: How cloud computing is shaping society
By Chris Weitz - January 19, 2012
Next week global leaders from DTTL and Deloitte member firms are meeting in Davos at the 2012 World Economic Forum to discuss the important issues of the day. While we can’t all attend, I have the real privilege to participate in a local Davos event in New York for clients of the U.S. firms. I’ll be speaking about cloud computing, and how it is not just a technology phenomenon, but is shaping society itself.
As someone who has been working with leading innovators for many years, my sense is that cloud computing represents a once-in-a-generation convergence of technologies: high-speed broadband, large-scale data centers, and flexible virtualization software. Working together as “cloud computing,” these forces are driving one of the most important global technology transformations impacting on many types of business, political, and social structures.
Cloud computing appears to be experiencing an “inflexion point.” According to recent statistics from Forrester Research, traditional technology models are flat or shrinking, while analysts forecast that the global market for cloud computing will grow from $40 billion in 2011 to more than $241 billion in 2020.
From smartphones to tablet computers, the “cloud” has pervaded modern life: the Internet is “always on everywhere;” commerce is “on-demand;” physical resources are “virtual;” data is “in the cloud;” personal and business relationships are unified “social networks”—shifting power from “top down” organizations toward individual consumers. The net effect of new cloud-based models is a decentralization of business and social structures. When anyone can leverage technology that was just recently the sole province of only the largest and richest players, the playing field becomes increasingly level. I know in Silicon Valley we take this as “given”, but the balance of power really does favor smaller, flexible, resource-lite players, which can potentially outmaneuver larger, resource-heavy institutions.
In many markets, resources no longer need to be acquired, but are used through “the cloud.” Reaction time to accelerating markets is becoming increasingly small. The “time to innovation” is shrinking from years to weeks as market contenders have access to cloud-based technology. New economics of business innovation and growth is becoming apparent, with more flexible and rapid scaling, restructuring of customer relationships with companies forming far deeper customer relationships at much lower cost.
Working with clients, I see compelling evidence that new business models are upsetting the established order. Cloud-based companies with Internet roots are impacting new industries outside their original markets. Popular social media networks/sites are challenging incumbents in media, telecoms, and technology, while online retailers are serving notice to traditional retailers and entertainment companies.
Cloud-based flexibility, agility, and scalability are becoming the new differentiators. Economic advantage may no longer be limited to those who can invest capital to innovate at high volume or cost. Cloud computing alters the economics of innovation and growth, and restructures customer relationship economics, allowing far deeper relationships with customers at much lower cost.
At a societal level, the norms and values that have been established over many years to protect assets in the physical world are not clearly established in the digital world. With cloud computing, we will need new rules for data and computing “everywhere all at once, and nowhere in particular.”
I believe the power of cloud computing will challenge society’s leaders to shape new ways of leveraging knowledge, networks, and data that drive the modern world. Establishing new rules will be critical to enabling our future economic and social development. I look forward to a great session in New York to discuss these exciting challenges!
Chris Weitz is a Director of Technology Strategy and Architecture for Deloitte Consulting LLP's U.S. Technology practice. He is also the global leader of Deloitte LLP's Cloud Computing practice, working with a broad range of industry clients to bring value through new and innovative strategies, technologies, and services models. He works with many of the world’s most innovative companies to develop new services and solutions using leading business processes and breakthrough technology.
Chris is a frequent speaker and panelists at technology industry events, focusing on cloud computing, the technology industry, and innovation in technology services.