Still not Cloud-keen? Understandable, but what about electricity? Part 2
Carrying on from my article yesterday afternoon, here's the 2nd & 3rd points that stood out back in 2009, in a paper from 1983, by Warren D. Devine, Jr. in the Journal of Economic History called "From Shafts to Wires: Historical Perspective on Electrification" - when considering cloud computing.
The transition to full exploitation of the new technology was long, but inevitable. Electrification of industry in the US began around 1883 and continued for more than half a century. Devine shows that as late as 1930 nearly 20% of factory power was still supplied by steam engines; he also notes while line drive configurations became rare after World War I, they persisted in some old factories into the 1960s.
Full electrification took a long time for a couple reasons. For one thing, it was often cheaper to continue running an old factory the old way than it was to build a new electric one, or even to replace a steam engine with an electric motor. Electrification also required the development of power generating utilities and a transmission grid, both of which took time. It also took time to spread the word and the knowledge about the new technology throughout different regions and industries.
Despite these impediments, though, the march of electrification was inexorable. In most sectors a factory that continued to rely on steam power, or on line drive or group drive configurations, would simply find itself unable to compete with an electrified rival using motors and unit drive. The factory using the legacy technology would be too much less productive, efficient, and agile to stay in business.
At the turn of the 20th century electric motors and unit drive seemed the stuff of science fiction; Crocker wrote in 1895 of "the extreme view… that a motor should be applied to every tool." But by the 1920s this extreme had become the norm.
There were detractors and sceptics about the new technology throughout the transition. In 1891, Dr. Louis Bell presented the results of his analysis showing that electricity made sense in situations where only small amounts of power were required, but steam was best otherwise. And experts argued about the right answer for powering and configuring factories throughout the following decades. As Devine writes:
… the merits of driving machines in groups or driving them individually were discussed in the technical literature throughout the first quarter of the twentieth century. Between 1895 and 1904, this subject was vigorously debated in meetings of technical societies; neither technique could be said to be best in all cases… And, over 20 years later, group drive was still being strongly recommended for many applications… Two textbooks printed in 1928… make it clear that there were many situations in which group drive was justified.
The people arguing for steam power, line drive, and group drive may not have been wrong about the 'right' answer at their particular point in time, but I'm left with the impression that they were concentrating on a moment and ignoring a trend. In other words they were making simple static calculations and failing to take into account that technical progress would, within a few short years, cause the same calculations to come out very differently.
This short-sightedness matters because factory owners made long-term bets at the time they built their plants. If they built for steam power or line drive or group drive they were constrained by these choices, and often unable to take full advantage of electrification even when they woke up to its power. A factory configured for electricity and unit drive from the get-go, in contrast, could take full advantage of all the direct and indirect benefits of electrification as they presented themselves over time.
I hope my purpose here is clear. I'm not bringing up this chapter in business history just because it's interesting (to me, at least). I'm bringing it up because the analogies between electrification and cloud computing are very tight ones, and are highly relevant for anyone trying to understand how the corporate cloud is going to play out.
So based in part on what I've learned about electrification, here once again, is my predictions about the move by businesses to cloud computing: It's going to be a long transition, but an inexorable one. There will be sceptics all along the way, many of whom will have objections and arguments that are valid at particular points in time, but not over longer periods of time. And the longer time periods are the ones that matter, because the move to the cloud is going to be accompanied by benefits that we can't yet perceive, but that will be substantial.