Still Making Electricity At Your Own Shop? I didn't think so...

In the long-ago past, businesses had to make their own electricity. So we learn in The Big Switch, by Nicholas Carr. He explains how the use of electricity shifted from on-premise systems -- companies had electricity departments, complete with electrical architects and managers, sort of like IT departments today -- to third-party electrical grids that businesses simply tapped into. Electricity went from an item on which a business focused half its time, attention, and labor to a simple utility it plugged into and paid for.

Does that sound familiar? Your IT department may perhaps be going the way of the on-site electrician. Much like water, gas, electricity and the phone company, the concept of computing as utility is emerging with the availability of storage and server virtualization, grid computing, and automated provisioning of platforms. Service oriented architecture takes complex business procedures that could profoundly transform the nature of organizations’ IT services, strategies and infrastructure, and opens up access to complex computing power. With the application of cloud computing there could be concealment of the complexity of service oriented architecture, reduction of operational expenses, and converting of IT costs to variable ‘on-demand’ services.

Now consider the connection between freelance or contract labor and cloud computing: it makes sense for companies to make labor a variable cost rather than a fixed cost. This shift can be seen in the growth in the on-demand labor market. Online staffing is a $1.5 billion-a-year industry; it’s growing 50 percent a year, and it’s projected to be a $20 billion industry by 2020, according to Work Market. With respect to IT workers in particular, one often reads about employers complaining that they can’t find the skills they need, and skilled IT workers complaining they can’t find a job. Of course, the concept of "digital sweatshop" must be considered, such as World of Warcraft farmers in Mexico.

In the ultimate Cloud scenarios, organizations will be able to acquire as much IT services as they need, whenever and wherever they need them. In the near future, labor could also be similarly networked. Taken with secure online apps, this would facilitate “agility-integration” of IT and labor resources within and between virtual companies.