In a recent Article Dustin Owens (2010) argues that elasticity defines the benefit of Cloud Computing.  He states “Elasticity could bring to the IT infrastructure what Henry Ford brought to the automotive industry with assembly lines and mass production: affordability and substantial improvements on time to market.” (p48). The article is useful and focuses primarily on security however it was the comparison with Henry Ford which got me thinking.

It is a bold statement and deserves further analysis. In particular it is unclear what Ford brought the motor industry – certainly increased penetration, increased usage, increased availability all of which are positive. Arguably though it also brought with it urban sprawl, oil-dependence, reduced wages and Tailorism. One can imagine similar problems with the cloud. Urban sprawl might be similar to flattening organisational sizes and increasing risk. For those companies whose data-centre provides competitive advantage will see an increased landscape of small competitors capitalising on the Cloud to compete – the sprawl. Our oil-dependence will similarly remain – Cloud computing hides the electricity and environmental impact of our actions in data-centres hidden from view. Purchases are unlikely to know what percentage of costs are electricity – and are unlikely to care. Finally reduced wages and Tailorism. Prior to Ford those involved in developing cars were highly skilled and worked across the line – Ford reduced this movement of skill, and Fredrick Tailor developed this into scientific management. One can see similarities in the cloud provider with increased specialism among staff  within these very large data-centres. With this comes risks – the generalist is better able to respond to radical architectural change and innovation. The generalist also has a more interesting job (a failure of Scientific Management). All this is speculation at the moment – I await my first Model T Cloud.

On another level however this comparison is interesting. because it is worth remembering that Ford was overtaken by General Motors for the simple reason that Henry Ford was against debt and demanded people pay in cash, whereas GE realised that borrowing to buy a GE car was beneficial. With the car you’re earning potential rose as you could travel for work and you were thus better able to afford the car.

In cloud computing the same might also be true. The argument behind Cloud Computing has always been that start-up ventures do not need to purchase the expensive IT equipment they can focus on  Opex not CapEx. Similarly SaaS offers reduced CapEx costs. But one might also imagine a growth of financial services industries around the cloud. For example providing short-term loans to allow small companies to ramp up websites in response to incredible demand (and perhaps insuring against this). Or allowing small media enterprises to rent cycles for rendering films as a percentage of future profits. Finally, and perhaps most importantly, if computing is a commodity we are likely to see spot-markets and commodity markets spawn. Can we imagine CDOs developing based not on sub-prime mortgages but on poorly used processor cycles within the cloud… or imagine insuring against a Denial of Service Attack such that when one occurs you can ramp up website services to respond, but not have to pay for the processor cycles! I can see many small companies taking out such insurance for their websites (if anyone profits from this – then donations received with thanks 🙂 ).

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Owens, D (2010) “Securing Elasticity in the Cloud”, Communications of the ACM 53(6) 48-51 doi:http://doi.acm.org/10.1145/1743546.1743565