Electricity ≠ The Interwebs

It's not my posting week (I guess I'd be really late if it were), but I just wanted to say a bit about Carr's analogy that the shift to remote computing (the term I'll substitute for "utility" computing) is somewhat like the move towards centralized electricity-generating facilities.  I'd also like to discuss the natural monopoly concerns with remote computing, as Carr himself suggests the possible need for regulation in a utility computing world on p. 61. 

The Electricity Disanalogy

At first the analogy to electricity might seem counter-intuitive simply because the internet has traditionally been considered a decentralized system, after all, that is supposedly it's genius.  But as Carr describes, there are significant benefits and efficiencies to centralized remote computing.  For a multitude of reasons though, I don't think this will lead to anything like the utility model of distribution we see in electric grids. 

There are three main differences (though they're all related) between what I see as the Electric Network and Carr's vision of "utility" computing. 

1) Electricity is a homogeneous product, remote computing/storage/software is not.   

2) The Electricity network is made up of essentially 2 components: generation and distribution.  Remote computing involves what I'd argue are 3 components: the underlying network (distribution), storage/computing capacity (hardware), and software. 

3) The Electric Grid carries exactly one homogeneous product: AC current.  The Internet, for the most part, similarly carries one homogeneous product: Packets.  However there is one huge distinction: packets can become whatever you want them to be.

The basic premise of the three points I'm trying to make is that there's a lot more diversity with what you can do over the internet network than what you can do with the electric network. 

Also, the electric grid might not be as centralized as it seems.  Carr described Google's new plant, which was located near a river to provide cooling to servers, thats a decentralized manner of getting power.  If you've ever been to California, you'll notice many people have solar cells on their roofs, and some technologies even enable you to share excess power (for those rare individuals to make more solar than they consumer) with the grid.  Can I write a book about how electric grids will one day mirror the internet's decentralized nature as wind and solar replace fossil fuels? 

The Lack of Natural Monopoly

If remote computing does explode, I'm not convinced that it will be that drastic a shift other than the fact that hard-drive and processor manufacturers will sell more equipment to hosting facilities rather than to direct consumers.  In particular I really don't think this will be a situation of natural monopoly. 

True, there are large fixed costs with developing a hosting facility, and there are economies of scale in such a facility, but there are a lot of areas for such facilities to compete, particularly when it comes to the software and services themselves.  Carr thinks IT is a commodity, if so, it's definitely one facing robust competition, especially when it comes to corporate IT services.

For one thing, we've been discussing privacy a lot, and when it comes to protecting another person's data there is a lot of room for competition. Redundancy and Latency are also areas for competition, how often is stuff backed up?  What are the maintenance practices?  These things are all true about the electric grid too, we all want reliable electricity as much as we want reliable remote computing, but with remote computing we actually have the ability to choose which remote computing providers we want to go with. In the electric grid, you go with your local power plant and local provider, in remote computing, you have your network provider, and THEN you can choose which remote computing service and host to go with.  [perhaps network neutrality is even more important in a world of remote computing, lest the network operators choose the winners of the remote computing market]

Consider Web-Site hosting services, they're very much like remote computing services, except that they play a more passive role.  They've existed for many years, involve high fixed costs in establishing the necessary server space and network connections, yet there are hundreds to choose from.  I think remote computing would most closely mirror this market.

 

I tried not to ramble... don't know if I succeeded.

    

Comments

[Chang Won Choi]

I would like to add more to your post about differences between electricity and utility computing.

One interesting development in networking has been the so-called mesh networking. While it has failed rather spectacularly in the marketplace, I still believe that it has the potential to be very disruptive in the future once the technology becomes perfected. Wikipedia can probably explain the technology much better than I can but what a mesh networking is a network where every computing device becomes a router for every other computing device in the mesh cloud. What this means is that there is no need for a central internet service provider. Every computer becomes an ISP. The reason why I bring this up is that there are many competing technologies that are going against the trend for centralization of computing resources.

Another example is home media servers (search for Microsoft Home Server). Instead of storing the pictures and other media files in websites such as youtube or flikr, families will store their media files in a convenient home server located inside their home. This will also their more control over their media files and also provide them better privacy controls. While this has also been a market flop, I think that there is still room for more competition against the so-called utility computing.

Furthermore, the Google and Amazon examples that Carr points out are a limited subsection of software applications that are out there right now. The reason why utility computing works for Google and Amazon is that the particular application, web-hosting, can be easily parallelized into discrete units. Not all software applications can be parallelized. For examples, video games can not be parallelized in a network because of high latency costs.

I might have been rambling too and maybe my outdated technical knowledge are merely superficial complaints against Carr's thesis but I think that Carr over-simplified and over-stated the significance of his vision for the future.

[Nathan Richardson]

Your post title is spelled incorrectly. It's "Teh Interwebs."