March/April 2008

The Digital Utility

Continued from page 1

By Mark Williams

Naturally, the industry's chieftains poured scorn on this thesis. Microsoft's CEO, Steve Ballmer, blustered that there was still plenty of life in l'ancien régime: "Our fundamental response is: hogwash. We look out there like kids in a candy store saying what a great world we live in." Even ­Ethernet coinventor Bob Metcalfe, who might have maintained an Olympian detachment, weighed in to complain in this magazine that "Carr's article just won't stay debunked" (see "Why IT Matters," June 2004). As evidence of Carr's wrongheadedness, Metcalfe cited the expansion of the Ethernet into ever newer, wider, and faster networking realms, thus arguably missing Carr's point. [Metcalfe is a member of Technology Review's board of directors.]

Carr was saying that, like previous technologies such as the telephone and elec­tricity, IT no longer conferred any competitive advantage because it was now part of the general business infrastructure. Next, IT would become a simple utility, provided to users over the networks that ­Metcalfe had helped make possible. Today, of course, Carr's thesis is the accepted wisdom: almost everybody agrees that IT services will eventually be delivered on a subscription basis, as a ­utility. As The Big Switch observes, this is why Google has been constructing gigantic server farms in rural sites in Oregon, the Carolinas, Oklahoma, Georgia, and Iowa. Elsewhere, similar data centers have been or are being built by Microsoft, IBM, Hewlett-Packard, Yahoo, Ask.com, and Salesforce.com.

The retail giant Amazon has offered the most comprehensive utility-computing services thus far. It had already introduced its EC2 (Elastic Compute Cloud, where customers run software on Amazon's systems) and S3 (Simple Storage Service, where customers store data for a few cents per gigabyte) when it recently launched SimpleDB, a website that provides metered database capabilities.

I asked Werner Vogels, Amazon's chief technical officer, whether we were truly in the era of the serverless Internet company that could be run through a browser. Vogels said that he took that as settled, given how many startups were happier paying cents per gigabyte to Amazon than investing in hardware costing hundreds of thousands of dollars.

In The Big Switch, Carr notes the prospective benefits of a world of utility computing, but he also plays the naysayer again. Nearly half the book describes the possible dystopian aspects of such a world. What are these, in his view?

First, the destruction of traditional businesses by the extremely lean companies that utility computing makes possible. Second, the ease with which governments and corporations will be able to track and exploit our digital behavior. Third, the emergence of a "YouTube economy" in which many will provide free information to the "cloud," and a few aggregators will harvest most of the profits. Fourth, the deterioration of human culture as people come to rely on the Internet to know and do everything, while they know and do little themselves. Fifth, the continuing fracturing of civil society as people choose to read or hear only the news that confirms their prejudices.