The stampede towards cloud computing/SaaS is happening fast. Nobody in their right minds buys computer servers anymore. You just rent them in the cloud. Enterprise IT buyers are hurrying to virtualize their data centers, reduce their energy consumption, and deploy virtual desktops, while scrambling to deal with security issues on the plethora of mobile devices their employees insist on using. Small businesses don’t have computers (except laptops) anymore.
Many small businesses don’t even have phone systems anymore. We all use VoIP, cell phones, and free apps in the cloud.
Everyone is consuming and creating video for both work and fun. Many people are getting rid of their desktop and laptop computers and relying on their smartphones connected to the cloud to manage their email, calendars, and information.
The result: a huge increase in bandwidth consumption and the need for more cheap data centers to house the bigger routers and the server farms required to power the clouds and deliver all that bandwidth.
Data centers, server farms, and big network routers all consume a lot of power for running and for cooling. Maybe that’s good news for the beleaguered power industry (although most data centers produce their own power). Energy is actually pretty cheap right now, but that makes it hard for energy companies to make money or to invest. As domestic manufacturing production has declined, so has the demand for electricity. Yet our collective consumption of bits and bytes is on the rise. All this leisure time and working from home has resulted in a lot of Web surfing and video consumption.
The good news is that Amazon, Google, and other big cloud providers are investing in green data center technology to host their clouds. But green isn’t cheap. Investing in renewable energy is more expensive than relying on existing coal-powered utilities.
As consumers, we should be expecting to pay more for green, renewable energy. We should also be willing to pay for access to high bandwidth (video on demand). Bandwidth is not free. It consumes power, computing and data storage, and generates a carbon footprint. And, for mobile devices at least, bandwidth is quite constrained.
Content providers—including bloggers, citizen journalists, as well as studios and networks—will continue to create more and more content for us to interact with, consume, and enjoy. As content providers, we expect unfettered access to the Net (Net Neutrality).
As consumers, we also want “free” access. But there are costs to produce, host, and deliver content. Those costs will be paid by content consumers or by advertisers on their behalf. It’s a pull through business model. Information consumers value their ability to consume and to interact with media. They’ll pay to do so. Will consumers also pay to upload video and content they’ve created? No; they want that to be free—powered by YouTube, Blogspot, and the “net.” After all, they’re investing their own Intellectual Capital in creating the content they’re willing to share with the world. So, I predict that the business model will continue to be: produce and host for “free,” pay to consume (by the drink for the content or by the megabyte for the bandwidth).
As we move towards more pay-per-drink media consumption, let’s hope that some of those revenues will trickle into green data centers. We don’t want the digital revolution to increase our carbon footprint, but to reduce it!
