Cloud Computing Is Enabling The Next Phase Of The Internet Evolution

Carlota Perez wrote a book titled “Technological Revolutions and Financial Capital” (2002) that is a real interesting read.  Perez says that there have been five historical waves of economic and social transformation in the developed economies of the world. Each of these waves have what she calls an Installation phase followed by a crash of some sort and then a Deployment period. 

HorizonWatching - Carlota Perz 5 Waves

Perez says that our global economy has now entered the deployment phase of the fifth technology investment cycle, which she says is the Age of Information and Telecommunications (see embedded picture).  Perez says that this will be a period of adjustment when novel business models will exploit the new IT infrastructure that is now being put in place that enable more porous, open, collaborative approaches that seek to leverage the economics and flexibility of global sourcing.  She expects enterprises of all sizes will employ technology to help them transform their business models, processes and operations.

As mentioned, Perez says we are entering this Deployment phase. As we do there are some key characteristics across our global economy that is impacting how this phase develops. The firms that will succeed are the firms that will embrace these characteristics and the change that is happening in order to innovate and leapfrog competition.

Important characteristics of our global economy includes:

  • A level, global economic playing field presents new opportunities, challenges and competitive technologies
  • New technologies, services and skills are emerging…and they are quickly being integrated into every aspect of business and everyday life
  • The pace of change is dramatically compressing “windows of opportunity” for real competitive advantage.
  • Billions of skilled people are entering the world’s economy, fundamentally transforming the mix of the global workforce
  • The interconnected nature of our world’s economy means businesses must be prepared to respond to – and capitalize on – changes in real time, with unprecedented flexibility.

While all this is happening, we are moving into what I believe is the third stage of the Internet. Call it Web 3.0 or whatever you wish, but cloud computing is perhaps the most important technology.  In fact, I believe that cloud computing is the key enabling technology for this next technological wave and the next phase in the evolution of the Internet.

HorizonWatching - Private Clouds Enables Next Wave of the Internet

Back in the mid to late 1990s companies were just concerned with getting websites up so they could have a presence on the Internet. It was all about providing very basic information to the public. But soon the so called e-commerce trend arose and business was being conducted on the Internet. Then Web 2.0 came into play and all users realized that they could share their ideas, create content, and collaborate online.  We are now well into this next phase of the evolution where the enabling technologies will be cloud, analytics, mobile, video, and semantic capabilities.  This so called Web 3.0 phase will provide applications that are much more immersive, social, and collaborative in nature.  Combined that with an explosion of networked sensors and advanced predictive analytic and all the Smarter Planet initiatives will become a reality. 

But the most important enabler will be the combination of private and public cloud computing infrastructures that will be the ‘engine’ of the future Internet.

McKinsey’s View on Web2.0 and Beyond

McKinsey Quarterly had an interesting article this month that talked about how companies should prepare now for when web 2.0 transitions all the way to web 3.0.  The article, Managing beyond Web2.0 pointed out that individuals are increasingly in a position of control on the Internet.  They are demanding the type of information they want on websites and how that information is delivered.   The net is that businesses need to adapt to disruption that the shift to digital media and social networks is causing in order to stay relevant and manage their brand. 

McKinsey believes that the shift to the digital media will force marketers to evolve in order to survive.  The article discusses a model McKinsey is promoting called LEAD (listen, experiment, apply, develop) as a way to create a road map to help companies survive this constant change in the online environment.

Here is a quick summary of the LEAD model

  • Listen.   Have a formal process to monitor and analyze what its customers are saying about the corporate brand and operations online and then use this information as an early-warning system.
  • Experiment. Don’t just monitor social media — engage customers in conversations by using the novel tools of Web 2.0.   As an example, try engaging customers through collaborative efforts in order to conceive new offerings and ad campaigns.
  • Apply.  Next take the experiments and apply them.  To make it easier to reach out to customers, optimize your Web site so that it connects fluidly with online communities and social-media sites.
  • Develop.  Integrate the social media marketing into the company’s marketing mix.  For example, rather than simply buying ads on MySpace or LinkedIn, make interactive Web 2.0 elements part of all marketing programs.

McKinsey says the key is to understand your customer’s online behaviors in order to take advantage of Web 2.0 and what’s beyond Web 2.0.

I like the LEAD model in concept, especially because it stresses Listening as the first step.  I see too many experimental efforts being launched that have not been designed to take into account listening.  The other point I feel gets lost is that there needs to be more of a focus on engaging external stakeholders in conversations.  So while there needs to be a focus on listening, there should also be an equal focus on responding to what is being heard.  The worst thing you can do is to listen and hear what is being said, but not respond. You need to engage in active conversations.

You can check out McKinsey’s article out at Managing beyond Web2.0 .