America's Next Economic Boom
Last week's Supreme Court ruling, today's jobs report, politicians who just don't get it — there's plenty to be gloomy about. But despite all this, I'm an optimist in the medium term. From my vantage point here in Silicon Valley, there's a lot to be hopeful about. As I write at the Wall Street Journal (paywall), all across the commercial and industrial landscape, there are exciting developments that—if America can get its economic policies in order—could set off a burst of growth and wealth creation as big as any we've ever seen in this country. Take, for instance, recent breakthroughs in cloud computing.
In the world of information technology, the big story these days is the shift of data management from largely in-house computing centers to rented, easily scalable computing and storage from anonymous servers located somewhere out in the Internet. Much of this shift, driven by leading providers such as Amazon, is already well under way, rapidly driving down costs and making information management much more affordable both for industry and, increasingly, consumers.
This in turn has kicked off a true revolution in what is being called "big data." Big data is the application of all of this new computing power to reach beyond the individual application of mass information to the mass application of individual data—for instance, by tracking a billion sensors in real time to monitor weather across a continent. It could mean capturing every step in the path of every shopper in a store over the course of a year, or monitoring every vital sign of a patient every second for the course of his illness.
Big data offers measuring precision in science, business, medicine and almost every other sector never before possible. It could ultimately have an impact as great as mass production did more than a century ago—creating a new world of mass personalization of products and services. The big-data revolution is already happening, with hundreds of applications already in use, for instance, tracking millions of chickens from farms in Thailand to family tables around the world, or monitoring the location in real time of every emergency vehicle in a major city like Chicago. Over the next few years, it will spread across every industry and scientific discipline.
Trends like this offer the potential for a golden era. A better world awaits us if we can elect the leaders who are courageous enough to unleash the animal spirits of the market to get us there.
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May '12
Re: America's Next Economic Boom
Meh. So far I'm underwhelmed. I see a lot of hype and also a lot of permission denied and broken cloud links.
Jul '12
Re: America's Next Economic Boom
Michael:Thank you for sharing this. Could you describe more fully the idea of "sensors" tracking various things, activities , chickens, shoppers, vehicles, vital signs, etc. is it GPS signals for location, but how do they stay with the chicken. How are vital signs "sensed" beyond the moment of contact with the medical instrument? For example, a person who has Type I diabetes. There are a number of important data points of interest in real time, starting with the most important: blood glucose monitoring which is now done by finger stick test at intervals of taking blood. Now there is an approximation called " interstitial glucose monitoring "presently done by the patient inserting a sensor into the skin every 3-6 days and this provides a continuous read. But I sort of got the idea that you might have been talking in your excerpt of a different dimension of (1) gathering the data via a new concept of "sensing" and (2) storing, retrieving and using the data that has been "sensed". Am I misreading you?
Jul '12
Re: America's Next Economic Boom
Just to clarify " interstitial glucose monitoring "refers to measures of the glucose content of the interstitial fluid in the body and not the blood fluid which has its own circulatory system. I was wondering chiefly whether you were referring to new advances in sensing data, or did you mean to speak only of new ways of storing and using the data that was sensed"? Thank you for whatever light you could add to this for me.
Jun '12
Re: America's Next Economic Boom
For some purposes, OK, but security cannot be good enough in the cloud.
If you do not have physical control over the servers, you do NOT have safe control over the data, no matter how encrypted it is. I am likely a dinosaur on this, but no one has convinced be otherwise on this topic.
Jun '11
Re: America's Next Economic Boom
50:50 to cloud computing. It is only a useful efficiency and flexibility step on its own. Gets firms out of the data.center business.
Cloud is transforming, however, as a platform for Big Data and Internet of Things capabilities. Few firms can build out the needed infrastructure on their own.
Edited on July 7, 2012 at 4:26pmApr '12
Re: America's Next Economic Boom
We are a small business, our data security level is a fairly high level in sensitivity and we have to share enormous documents with outside companies. It does come down to cost and if we had a security breach, the risk to our business would not be too significant. What large companies are on Cloud?
Jun '10
Re: America's Next Economic Boom
If the monitoring data can be uploaded either manually (USB) or dynamically (from a WiFi-enabled monitoring client device) via a home router to the Cloud, essentially the healthcare provider's database can actively monitor the condition of the patient on a frequent and routine basis or potentially in real time and send alerts to patients or physicians if something is abnormal or immediate treatment is warranted. This sort of realtime data collection is really not that difficult to implement and will be applicable to a host of chronic health conditions. There are several potential fail points - the monitoring device, the router, one's Internet Service Provider, if a portion of the grid goes down, or a critical satellite losing a link because of a solar flare or other malfunction...other than that these fail points are not frequent or significant enough to outweigh the enormous benefit of these solutions. Realtime healthcare monitoring is already driving the development of cloud solutions.
Edited on July 7, 2012 at 4:08pmJun '10
Re: America's Next Economic Boom
They won't need to. Small-to-medium sized businesses and many larger enterprise companies will rely on dedicated cloud service companies to provide this functionality through contracted subscriptions. Many already do.
Jun '10
Re: America's Next Economic Boom
To John - One should always assume that no data is 100% secure and build in contingencies to deal with breaches. Even the banking industry has seen credit card and account data stolen from them and its an industry with some of the tightest security mechanisms in place. That said, not all data, even some more sensitive data, is prone for attack, even though companies should always assume that it is. Even if one does have physical control over the servers it doesn't mean they can necessarily detect when an intrusion and a transference of data is happening until after the fact. So, physical control of the servers isn't a foolproof guarantee of security either.
Companies should conduct a risk/reward analysis for transferring any of their data assets to the Cloud. Think of it like flying. Do you know what the crash record is of any particular airline is before you board a flight? Or do you make a risk assumption that the numbers of airline crashes are so infrequent and so minimal as to feel reasonably secure that taking any given flight will be safe?
Jun '11
Re: America's Next Economic Boom
Yes, but most are doing it as an efficiency step (point one in my comment). The step to Big Data and Internet of Things will be the transformation the cloud enables.
Brian Watt
They won't need to. Small-to-medium sized businesses and many larger enterprise companies will rely on dedicated cloud service companies to provide this functionality through contracted subscriptions. Many already do. · 15 minutes ago
Jun '11
Re: America's Next Economic Boom
Nothing wrong with being a dinosaur...they ruled the Earth for quite a while!
I would, however, submit that people and their fallen nature drive many more security breaches than the technology itself.
John Hanson: For some purposes, OK, but security cannot be good enough in the cloud.
If you do not have physical control over the servers, you do NOT have safe control over the data, no matter how encrypted it is. I am likely a dinosaur on this, but no one has convinced be otherwise on this topic. · 3 hours ago
Jun '10
Re: America's Next Economic Boom
Fricosis Guy: Yes, but most are doing it as an efficiency step (point one in my comment). The step to Big Data and Internet of Things will be the transformation the cloud enables.
Brian Watt
They won't need to. Small-to-medium sized businesses and many larger enterprise companies will rely on dedicated cloud service companies to provide this functionality through contracted subscriptions. Many already do. · 15 minutes ago
I'm a terrible handyman around my house. I pay experts to fix my plumbing or repair my drywall. To the degree that companies attempt to wade into waters that they are unfamiliar with they will see the wisdom of relying on firms that are experts in this new field. So, I'm not sure I see your point. If a company desires to be cheap and construct a cloud solution on their own instead of relying on experts who are already engaged in this field then that's a whole other risk and could result in burning through a lot of money, resources and time. But hey, if that's what they want to do.
Sep '11
Re: America's Next Economic Boom
Brian,
You're assuming that third-party providers have expertise and expert staff to provide for continuous up time. In practice, ISPs are almost invariably selected with heavy input from a corporate purchasing department, who will pick based on price. The inevitable race to the bottom--and in this case, the bottom is located in the Philippines--results.
We have not yet litigated the inevitable disaster--when a major security breach occurs, and the breach happened due to the facilities of the cloud provider. We also have not yet dealt with the legal and operational consequences of financial trouble at a cloud provider, or the consequences of government action against another cloud customer.
But we have this alarming precedent of MegaUpload--where perfectly innocent users were wiped out.
The cloud is a low-cost way to outsource a corporate data center, and RIF your network staff. All the promised future benefits seem remarkably spurious so far--to the point that when people talk about "big data" and "the cloud" my brain hears "high-speed rail."
Jun '10
Re: America's Next Economic Boom
John Murdoch: Brian,
You're assuming that third-party providers have expertise and expert staff to provide for continuous up time. In practice, ISPs are almost invariably selected with heavy input from a corporate purchasing department, who will pick based on price. The inevitable race to the bottom--and in this case, the bottom is located in the Philippines--results.
John - I don't think I'm making these assumptions at all. Never mentioned 100% uptime. Even mentioned that failures will happen. I try not to deal in superlatives. Services in the cloud, like any other service in the market will face the scrutiny of the market. I've pointed out the risks and rewards of moving data to the cloud and relying on it. The long term viability of cloud solution adoption will be based on market forces and market requirements. With most new technologies, the legal community tends to lag in its understanding of the technology in order to grasp who is liable for what aspect of it. This has happened over and over again in high-tech.
Jun '10
Re: America's Next Economic Boom
Re: prognostications of the future...it's clear that analysts can sometimes be wrong. A few analyst firms thought that Ethernet and WiFi-based home networking would never catch on. D'oh! One firm (that shall not be named) actually apologized to a former boss of mine because they were adamant that he was wrong on this front and later returned sheepishly to give him an award for his visionary thinking.
Any prognostication whether glowing or dim should be scrutinized. Re: Cloud-based solutions - there are already numerous types and not just the transference and repository of personal or company data. There are cloud solutions that are already more dynamic - being able to monitor one's small business locations remotely via IP surveillance cameras. That's a cloud solution. Being able to remotely manage a network from anywhere in the world. That's a cloud solution. Remotely monitoring, managing and moving inventory or company assets globally. That, too. The capabilities and infrastructure is already being built out and in numerous fields already in place.
To suggest that this is some sort of pipe dream, however, is like telling Henry Ford that the automobile is never going to amount to anything.
Jun '10
Re: America's Next Economic Boom
On the cloud-based medical monitoring front, interesting reading here, here, here and here.
Mar '11
Re: America's Next Economic Boom
Michael
Great point (and great article). The transformations that will take place as a result of cloud computing will completely tear asunder the existing IT industry. The Internet completely remade the IT stack (outdated Novell equipment, anyone?) , paving the way for innovative companies at each layer of this stack and extending into retail, publishing, advertising, and god knows, everything else.
Cloud computing will do the same, bringing in a schumpetering storm among old and new along with a clash of titans extending across computing, telco, cable, and other sectors. There will be many opportunities but it won't all be for free. Lots of good companies will get caught up in the changes (Cisco anyone?). Also, cloud efficiencies will means companies may not grow to the sizes they did in the last wave. (Instagram had only 13 employees and yet was serving 50m users. )
This virtualization of the IT stack (meaning the servers can reside almost anywhere with the software layers above abstracting away any physical understanding of the resources), means that computing resources and data management can be moved across the globe.
cont >>
Re: America's Next Economic Boom
Peter Fee: Sensors are the great untold story of the tech revolution over the last decade. The technology has long trailed the rest of electronics because of the need for radical miniaturization and analog data collection (not to mention communications). But, thanks in part to Moore's Law, there have been some real breakthroughs in the last few years. You can now make sensors so small that you can swallow them, throw the in the ocean by the millions, even (soon) through them into the air to float on the winds. That's the beginning. We now also have a platform -- iPhone/iPad and their Android counterparts -- that is portable, has high resolution imagery and cameras, and will soon be in the hands of 2 billion people. As I noted in the WSJ piece, there now more than 10,000 medically related apps just for the iPhone -- and hundreds of newly funded companies building hardware and software for home medical monitoring. Everything is now in place to have a revolution in personal medical/health monitoring. (cont.)
Re: America's Next Economic Boom
(cont) All that's really missing is the middleware and industry standard protocols that will process all of this datat that will stream off of sensors (on or in the body) and other devices, and make it usable to doctors (and legal to the FDA). As a director of middleware company, I can tell you that this revolution is less than 3 years away.
John Hanson: You might learn something from this blog by my friend Brad Peters, CEO of Birst, a cloud analytics company: http://www.forbes.com/sites/bradpeters/2011/09/23/66/
Mar '11
Re: America's Next Economic Boom
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Look for other countries to try to gain traction in cloud computing. But even if the computing resources remain in the country (located next to your cheapest power source - hello, northwest hydropower), collaborative coding and communications technologies make it easy to work from anywhere on the globe. Outsourcing of IT isn't a new thing but the level of talent and the ease of hiring and managing a virtual work force reduce the friction and greatly lessen the risk.
The US certainly has an advantage but the changes taking place in the stack and the virtual nature of cloud computing means that companies like Cisco, HP, and Dell could become the modern equivalent of the New England textile mill.
The federal government did amazing work back in Internet 1.0 by paving the way for innovation. The Reagan tax cuts and Carter/Reagan deregulation efforts combined with reasonable/low-touch laws like DMCA allowed the Internet to go through quick market-driven iterations. Unfortunately the debris piled up by government since then make going from startup to growth to industry leader difficult. There will be innovation for sure but sadly not as many breakouts as there could be.