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Cloudy with a Chance for Industry

The case for moving computing to the cloud seems (irony intended) set in stone: savings on hardware! nearly unlimited memory! remote access!  However, bullish predictions appears correlated with bearish industry adoption, which suggests issues greater than the technology itself.

First of all, most people find change-making difficult, which the well-documented status quo bias, where people view the current state of affairs as optimal, despite superior alternatives, suggests.  Large companies are notoriously difficult to change.  Besides the fact that they encompass lots of people with a status quo bias (an exponential status quo bias) companies must manage long-term investment decisions, which means change can be expensive.

In terms of technological change, while empirical evidence may be lacking, IT tends, in the non-start-up environment at least, to suffer from the “nerd-factor.”  While the CIO may present an excellent Powerpoint, the CEO may be distracted by wondering if the CIO is sporting a pocket-protector.  The joke that CIO stands for “career is over” has some truth to it, especially because that CIO can end a career at that firm and move on, which can further diminish the prospects for internal change.

Such an argument could seem to suggest that companies should still be using slide rulers and typewriters.  The point is, rather, that change is challenging and the traditional assumption that a technology need only prove itself to earn adoption is an over-simplification.  New thinking suggests that a technology must be at least ten times better than the original to motivate change.  Though such a number hardly provides an exact formula, it does give a guide to the mentality around technological change.

Cloud computing has its own challenges to adoption.  Regardless of whether it is rational, there is something inherently comforting about tangibility.  Even the consumer, more apt to risk-taking than a company still reads physical books and some purchase cds and records.  Such behavior should not be dismissed as merely Luddite-esque but understood as one indication that people find some value in physical objects.  Cloud computing, by its very nature, cannot fulfill a desire for physicality.  Cloud computing also suffers from the well-publicized hacking cases, whereas with hardware, “hacking” requires the cloak of night and a blue print of air vents.  Forward-looking people understand that security breaches are the exception and will be rectified with time, but they do provide an easy way to shut down a suggestion for cloud computing.

Finally, there are risks inherent to early adoption: that problems will surface without immediately clear solutions, or that better technologies will develop after the company had already made its initial investment.  For the risk adverse, a tendency large companies have, there is a clear advantage to being the second mover.

Over the long-term, industry will almost certainly move to the cloud, it just requires the patience of a bull groomer, rather than the tenacity of a bull.

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  1. Pingback: Analyze that: challenge accepted « econobytes - August 15, 2012

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