Sunday, August 25, 2013

Cloud Will Make Software Affordable & Help Grow The World Economy

When I first moved to the San Franscisco Bay Area from Minneapolis, I was put up in the DigitalThink corporate apartments in Jack London Square in Oakland, California. I could see the container ships load and unload at the Oakland port from the water front. It was interesting to see huge ships dock at the port and cranes go to work to unload the ship and load them again within hours.

What surprised me was the lack of people involved in the whole operation. I could hardly see any people in the dock. I wondered what happened to all the longshoremen who loaded and unloaded the ships and the waterfront culture we have read about in stories and have seen in movies. The Oakland docs were a bit boring in my opinion.

Longshoremen at Noon by John George Brown. Courtesy :
So when I ran into the book "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger" by Marc Levinson, I picked it up and read it.

Mr. Levinson talks about the culture of the docks, which where in the middle of the great cities of the world like New York, San Francisco and Rotterdam. The longshoremen earned above average wages, even though work was dangerous and had unpredictable hours. They had to load and unload ships manually and the process was the most expensive part of the transportation cost.

The standardized container gradually eliminated this inefficiency and, after 20 years of legal and unions struggles, became the standard way to ship cargo around the world. This reduced shipping costs significantly,  made goods cheaper, created jobs in many parts of the world and grew the world economy.

But at the same time, docks did not need as many longshoremen. Factories did not have to be located near ports. Ports moved away from city centers to cheaper locations and the culture of longshoremen was transformed from brawny risk takers to high skilled very well paid machine operators.

When I read the book, I could not help think about the many similarities between longshoremen and the millions of information technology workers in the world. The tasks of corporate information technology teams that spend most of their time, installing and maintaining software will be shifted to few data centers around the world and will be made significantly more efficient than today by cloud technology. Corporations will still need high skilled information technology workers. But their jobs will be to perform tasks that make a corporation competitive, not just keep the software running.

The cloud is not just making things efficient. It used to be that only large companies of the world could afford enterprise software because of the cost associated with it. Cloud software is changing that. Cloud software is making enterprise software affordable to  millions of organizations that could not afford them before. A small company can rent the best people management software or the best mobile device management software for a few dollars per user per month. This is going to create opportunities for millions of people in every country in the world. This will grow the world economy and improve the standard of living for many.

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