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Business Transformation in Action

Joe McKendrick

Can Cloud Computing Save the Economy? Not Too Long Ago, I Would Have Laughed at this Question...

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In this week's interactive forum, Peter Schooff asks: "Can Cloud Computing Save the Economy?" Readers, you are urged to join in on the discussion.

Many forum participants scoffed this notion. Cloud has no more to do with economic growth than your windshield wipers have to do with the performance of your car.

I would have laughed at this question, too. Until, a couple of years back, I came across a company called GigaVox Media, which launched an online podcast service. It didn't buy any servers or storage or other computer equipment -- instead, it leased time from Amazon Web Services.

The company's startup costs?  About $82 a month. That's it.

Now, the part about economic growth. All the booms we've seen have been the result of intense entrepreneurial activity. In the 1980s, it was Silicon Valley and the PC revolution. It the 1990s, it was the dot-coms. Booms are driven by frenzied startup activity.

Cloud computing dramatically levels the playing field between larger established enterprises and startups. A startup now has access to large data center resources that were formerly prohibitively expensive.

There was a time when launching a serious startup required serious capital. Seed money was required for hiring talent, marketing and promotion, office space, and for technology to make it all happen.

The technology portion of the equation is suddenly diminishing, dramatically. Thanks to cloud computing and social networking resources, it now costs virtually pennies to secure and get the infrastructure needed up and running to get a new venture off the ground.

A lot of laid-off or frustrated professionals now have access to computing and information resources unheard of even a few years ago. New York Times columnist Thomas Friedman, for one, calls this the rise of the "Do-It-Yourself Economy," driven by a mass diffusion of low-cost, high-powered innovation technologies -- from hand-held computers to Web sites that offer any imaginable service -- plus cheap connectivity. They are transforming how business is done."

With IT infrastructure costs low and cheap -- with other resources such as the collaborative and production sites -- prepare for an explosion in entrepreneurial activity. Unemployment is high right now, and there are many, many, many professionals who see the startup route as a more sustainable alternative to seeking full-time employment.

With this confluence of underutilized skills and cheap resources -- the DIY economy -- we may be on the verge of an explosion in entrepreneurial activity in the decade ahead that will rival anything we've seen before.

Again, please join in our discussion on "Can Cloud Computing Save the Economy?" I think it is our greatest resource.

In this blog (formerly known as "SOA in Action"), Joe McKendrick examines how BPM and related business and IT approaches can promote business transformation.

Joe McKendrick

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. View more

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