There has been a lot of discussion in the blogosphere about what cloud computing is and what it can do. The best and most succinct definition I've come across is that on the Gartner research channel. They focus on how Cloud Computing is not just a new technology providing new functionality but a paradigm shift in how companies are thinking about IT. As Darryl Plummer says
"In the IT world we’ve always forced our users to look at technology as if it were the thing they needed to pay for. In fact what they want to pay for is how many invoices they want to generate a month, how many bills they want to send out, how many customers they want to serve. If they can start thinking in that way then they can start making decisions on a business level and the IT group no longer has to justify expenses on a technology level."
But functionality based procurement is far from the only thing that Cloud Computing is set to change. I believe that it is also a huge step in the IT market efficiency caused by division of labor. CRM systems will be built and maintained by CRM specialists, BI systems by BI specialists and in-house IT professionals will concentrate on providing the right functionality and strategic direction for their companies. But how can we guard against the intellectual insulation and lack of innovation that Adam Smith warns may result from specification?
Well I believe that the SaaS model has the answer built in: upgrades to SaaS applications are quick and easy so a sensible provider will have their ear to the ground all the time and be constantly building in the feedback they receive. If someone tweets about a bug in the software one morning, the manufacturer can have the software fixed and updated by the afternoon. This can make the development process a collaborative one between the maker and the user. The resulting 'conversations' can prevent intellectual silos forming and allow the product to evolve to meet customer demand.
The third main shift that SaaS facilitates is perhaps not one of its own creation, but SaaS technology will doubtless push it much further than imagined before. People have been working together since the first Darwinian minded group gained selective advantage through cooperation, but only now has SaaS allowed people to work on concrete projects from opposite sides of the globe. This further breakdown of geographical barriers not only makes businesses more efficient but social and personal lives richer and easier.
Is all this high minded idealism stretching things a bit too far? After all, SaaS is not yet universally adopted and adored. Personally I believe that despite the hype these shifts occur almost naturally, as we have seen with cellphones and the worldwide web, and very quickly people forget they ever had to live without them. The lines between our desktop and our browser will continue to blur until we forget the division existed.