SES Keynote: Nick Carr, Author of The Big Switch - Rewiring the World, From Edison to Google

Nick Carr kicked off day two with a keynote based on his new book, The Big Switch — Rewiring the World, From Edison to Google. Carr is an established author and technology columnist for publications like The New York Times and Wall Street Journal. Carr opened with the statement that algorithms and bandwidth are changing the way we do business. He drew parallels between the evolution of electric power, growth of the personal computer in the 80s and today’s adoption of virtual and remote computing. Specifically, he outlined how power changed from a decentralized to centralized model over the past 100 years. Similarly, PCs forced corporations to restructure in order to address the way people worked in the 80s. According to recent research, 80 percent of an average corporation’s server capacity is wasted, while 65 percent of storage capacity is wasted. Worse yet, 70 percent of IT labor is focused on upkeep, rather than doing business. As such, IT expenditures as a percentage of capital equipment budgets have climbed from single digits to nearly 50 percent over the past 40 years. Carr cited the new Google server facility in The Dalles, Oregon, as an example of the new centralized computing model (although he mangled the pronunciation of both the city and my home state). He also touched on virtual computing (turning hardware processes into software processes) which increases computing power and flexibility. The drastically increased bandwidth now available has enabled remote computing on a large scale. The overall “moving into the cloud” effect means that computing occurs and data is stored in the network itself. The World Wide Web is now the World’s largest computer. Examples of changes in computing include Facebook’s data customization interface and Mint’s software as media (financial management software). Software is now measured by the quality of the users, level of engagement and monetization, instead of units sold. Similarly, Carr shared examples of how media is looking more like software, including ABC’s Lost Web interface and the centralization of Web properties (top 10 site page views increased from 31 percent to 40 percent from 2001 through 2006). A somewhat frightening aspect of the evolution of centralized computing is the “workerless company” with examples like Skype (200 employees), YouTube (60 employees), CraigsList (20 employees) and Plentyoffish (1 person). This is possible through radical automation over cheap infrastructure, outsourcing and user-generated content. Unfortunately for the general population, as computing power centralizes, so will the concentration of wealth (to the technology elite). Another key concept Carr introduced was the tremendous personalization and polarization. His example was from the last election: the polarization of the conservative and liberal blogs (virtually no link relationships between the two). The last concept Carr introduced was “consumers as prey” where information about your personal life is widely available online (citing Thelma Arnold’s media attention). Buyers, beware of search and social media! As Carr says, the World Wide Computer both liberates and controls us (cue Apple 1984 TV ad). The good news in all of this: Search Engine Strategies attendees received a complimentary copy of his new book. I look forward to reading it.