In some of our earlier Digital Bridge Partners blog posts, we touched on the idea that Electricity as a UTILITY is a great historical and economic metaphor for IT as a UTILITY, aka Cloud Computing.
On reflection, it seems that one can take the metaphor even further, with the idea that the energy market is also an antecedent to the market for Cloud-Delivered (and Originated) Data, where Cloud Data creates a key source of differentiation and competitive advantage in many industries.
Earlier this year, David Linthicum wrote that “CES 2012 should have been called the Cloud Electronics Show“. His point is that Cloud-Delivered Data is becoming one of the most important components of the electronics value chain, whether in Cars, TVs, or kitchen sinks 🙂. What is driving industries to both deliver Cloud Data to, and source Data from what have traditionally NOT been data-oriented devices such as cars and home appliances? Bottom line is that the cloud’s ability to either deliver to or extract relevant information from such devices, enhances their functionality and drives more sales in terms of market share (at the core product level) or add-on sales in the form of subscription services. So why is Cloud Data the 21st Century equivalent of Electricity? Because back in the day it was the availability of electricity that allowed companies to create electric motors and electric systems along with the availability of Energy as a Service (UTILITY) that allowed companies to differentiate machines and make them more competitive. In 1900 less than 5% of the power used in factories came from electricity. 5 years later as the motors, systems and delivery of Energy as a Service came into existence, no business owner would design a new a factory that wasn’t driven by electricity. We think that Cloud Data will not only define and transform B2C industries, it will also transform many B2B industries. Many companies that formerly used IT to codify business process and practices are now using IT (specifically Cloud Data) to transform and even create business processes and practices. The New York Stock Exchange, as an example, has gone so far as to argue that it it is a Technology Business, not a business that uses Technology!