More than with previous technological (r)evolutions a side effect of cloud computing seems to be an increase in the degree of centralisation and concentration, not just within company organisations, but particularly in the wider commercial market. This is the most obvious with Software as a Service, where providers such as AirBNB, Uber, but also earlier cloud services such as LinkedIn and Google Search quickly established a ‘winner takes all’ distribution of market share and thus market power. And also in Infrastructure as a Service, we see an quickly diminishing number of suppliers still having the illusion that they can keep up with the gorilla in this market.
My first scientific encounter with centralisation and decentralisation was during the early eighties of the last century – when Prof. Gert Nielen – one of the founders of the then just launched Business Information Science curriculum – stated that centralisation and decentralisation can best understood as a sponge. By squeezing the sponge (centralising the control) we expel waste and increase efficiency, for example by concentrating information storage and processing in one place and by all using the same standard way of working. But after a while squeezing the sponge harder does not bring that effect anymore, we must make room for new ideas and new ways of working and the best way to do so is by permitting a degree of decentralisation, by releasing the sponge and let many (decentralised) flowers bloom.
A technology that makes decentralisation possible in the cloud is the Block Chain. But so far block chain technology is mainly known for Bitcoins and the somewhat anarchic atmosphere that surrounds this phenomena. In essence, a block chain is a reliable journal (ledger) of transactions, which makes it possible – without a central authority and with no predetermined confidence (trust) in transaction partners – to still do business with each other. And no longer needing a central authority (such as a commercial or central bank, or a central provider such as a Google or AirBNB) also means that there is no authority that can indulge in censorship or market manipulation.
To understand why having such an authority can be a problem, we only have to look at the music industry. It seems almost every artist at some point during their career will run into a serious conflict or at least a fundamental difference of opinion with their record company. Would it not be much nicer if these artists could autonomically control their music distribution and IP transactions. And I mean not through free or even illegal downloads and streams but through a worldwide trusted network of micro transactions.
Now artists and musicians are a group that for centuries has been monetizing their skills and talent as independent contributors rather than as traditional salaried workers. But increasingly this may also apply to the traditional employee jobs of enterprise organisations that people like you an me are active in. Also here workers will be increasingly expected to string together a monthly income from individual transactions. In which case it is nice if the percentage of overhead and (government) taxes that is deducted from the incoming flow is somewhat limited.
And if these two small examples are not convincing enough to establish the need for block chain based solutions, consider the ultimate use case for decentralised low-cost but reliable transactions: the Internet of Things (IoT). Increasingly, these “things” do transactions with people, but also directly with each other. An example of the latter is a parking garage (a thing) that offers cheap parking at weekends to smart cars (other things) that are looking for a place to stay safe during the city trip weekend their owner is planning. Now from a privacy perspective it is pretty essential if both the cars and their drivers can remain anonymous and also that is possible thanks to block chain based technologies and its many associated initiatives such as ethereum.org. Not that block chain based technology do not still have some hurdles to overcome (scalability being just one of the more well known ones) but the potential is quit promissing.
Decentralized architectures may seem complex but they in many cases also have proven to be very powerful and robust. Just consider the original architecture of the Internet (although that still some essential parts centrally arranged/agreed) or the power of bittorrent and other peer2peer applications, including the original version of Skype.
I don’t expect the slight alternative feel to blockchain will disappear in the near future, even though the growing popularity of books such as “Capital in the 21th century” by Thomas Pikety and “Post Capitalism” by Paul Masson and even the (temporary) emerging of a “socialist” with a remarkably young following in the US election is a sign that the world is starting to look at alternative models to organise, allocate and monetise traditional market-driven commercial activities.
Chain Gang (That’s the sound of the people working on the “Chain Gang”) is a song that Sam Cook wrote in 1960 about a group of inmates – chained together – that had to perform forced labor for a central authority. In most part’s of the world Cook is better known for his much more optimistic “(What a) Wonderfull World.