Monday, December 18

The Six Minute Book Summary of The Big Switch: Rewiring The World From Edison to Google by Nicholas Carr

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Executive Summary

The Big Switch, a book that is written by Nicholas Carr talks about the future of IT technology with comparison to the past achievements in the similar field of energy that has been delivered to the world since the big invention of Thomas Edison. The book is written in two parts; first part is mainly concern with the history of industrialization and its advance to electrification era, while on the other hand second part of the book is focused on something that we can call reality, which is transforming the period of PC computing to computing utilitarian age. The book has eleven chapters and each chapter gives proven examples that have been researched in the past by the experts. Even tough each chapter tells the story for itself, at the end of the each chapter author gives example of the relationship to the previous one.

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The first part of the book talks about the Burden’s machine, which is known as the beginning of industrial revolution. Burden’s machine was used by the farmers hundred fifty years ago to produce their necessary tools for harvesting. After fifty years of usage the machine has been replace by the Edison electrical plant that had to been build close to the factories to be able to produce energy. Later on the source of energy advanced to the level in which no more electrical plants had to be built close to the consumers, it started to be available in the wide range of delivery. Thanks to the Nikola Tesla, the inventor of alternating current, the electrical energy is being delivered in enormous capacity that we are not even aware of.

The second part of the book focuses on the same idea as the first part of the book, but the industrialization and electrification are replaced with the PC era and utilitarian computing era. After one chapter of introduction of history of computing, the author spent his most time on the explanation of the transformation from PC computers to the World Wide Computer. The beginning of PC era started with the idea of Bill Gates that software will be of greater usage than hardware. Most of the experts were skeptical of his idea, but it has been a long time since we have been installing software on our computers to be able to finish required tasks. The reason for the name PC era is mainly because at the time it was not possible to interact between the computers like today, and all software that we wanted to use had to be installed on our computers. The idea of shifting from PC era to utilitarian era of computing came with Napster, which was software made for downloading a music files over the Internet. It was basically downloading a music files from other computers attached to Internet, the user only needed to download a piece of software that will let him interact with other computers.

Utilitarian era is also called a World Wide Computer (WWC). WWC is something that we have today at the very basic, developing age. WWC is described as a cloud of information that floats somewhere there and whoever has Internet connection is able to be part of it. The best example of WWC is the online game Second Life in which people can register and play and meet their friends as well as new people all over the world from their computer.

Other issues that author has discussed is the way all these changes mentioned above have influence our economy, culture, and income wages. According to the author the middle class will feel the biggest change in income because of the World Wide Computer. Thanks to the World Wide Computer today’s companies can be made of two employees, such companies are Google and YouTube.

At the end author is concerned with the future of World Wide Computer and unfortunately unable to measures its range. He argues that this is the beginning of WWC era and that in the future search engines will be used directly by our brains and the float of information at some point in the future will be able to transfer by merging two human bodies.

The Top Ten Things to be Learned

1. Managers need to pay attention on Internet security as the main concern.

2. Managers in world wide computer industry needs to keep away their employees from competitive search engine companies

3. To have the right path of investments in the company

4. The amount of money spent on hardware

5. Protect company’s knowledge (by enabling high security of getting access to world wide computer)

6. Be aware of the next step regarding technology in the future

7. Be aware of insecurity transferring important data over the Internet

8. Focusing on services we provide

9. Being aware of world wide computer possibility and ability

10. Keep your employees aware of free labor they do while searching over different types of engines provided on world wide computer

The Big Switch: Full Summary Burden’s Wheel

In the first part of the chapter Carr talks about the Henry Burden the innovator of Waterwheel that could produce up to 500 horsepower of energy. The wheel was used basically for producing power for delivery of drill presses, grinding wheels, hammers, and all necessity that craftsmen needed. His biggest invention was the creation of “the Niagara of Waterwheels,” in which Burden have advantage in Iron Works at that time over manufacturers. At one point he was producing horseshoes used by the Union army in the Civil War.

After a while being in a manufacturing business successfully, Burden’s goal was not only to be able to produce mechanical power, but also to improve his workers skills and quality of products. The Burden Iron Works after turning nonstop for fifty years, it had been abandoned. The engineering era started, and invention of electrical current that was centralized to one location was the source of energy that replaced Burden’s wheel. After a big breakthrough of new source of energy it became necessity for manufacturer to hook their plants up to the electric grid in order to tap into the cheaper source of energy. Cheap and plentiful electricity shaped the world we live in today. Decades ago was a big invention that no household families would had been able to use it, but today it would be not imaginable to live with no electric source of power.

Carr introduces information system and its development in an exact way he introduce the change of source of energy from Burden’s wheel to invention of electrical current. At the early age of computerization era we had software and hardware installed on our machines to carry out different task. As time passed, computerization has been changed, and once it will change to that point that we will have all data stored to one central location, just like the change happened hundred years ago when Burden’s wheel was replaced by electric current as a source of power. Carr introduces two examples of centralizing information, and those are: Google (the search engine and storage of data is located not on our computers, but on the main Google server) and Napster as the main cause for the idea of centralizing and wiring computers.

The Inventor and His Clerk

Thomas Edison, the greatest inventor at his time, has been introduced in this chapter as the person who came to idea to produce power in a wider range. After being able to produce energy for manufacturers by building plant next to the factory, he wanted to see how he could replace gaslight with electric bulb. His goal was to produce system that would provide electrical lighting cheaper than gaslight and still to make profit from it. After a while system has been built and the houses in the NYC for the first time in history have been illuminated. After the invention of the electric bulb, and direct current, Edison was focused on providing wires, power engines, and other necessities to manufacturers, which was followed by establishing his companies The Edison Lamp work produced light bulbs, The Edison Machine Works manufactured Dynamos, and The Electric Tube Company supplied the wiring.

His Clerk, Samuel Insull, was more business than technology oriented person, who at the beginning was following Edison’s idea, but after he had gained experience working with Edison he was in disagreement about the future use of electricity with Edison. He had seen electricity as source of energy that everyone would use in different fields, but not only in manufacturing fields. He saw utility as general purpose for technology, used by many businesses and homeowners to run all kind of machines and appliances. However, Insull knew that to be able to make electric power as utility and general purpose to technology he needed to figure out how to serve different business from one central location. Invention of alternating current helped him to make it possible. Once Insull had technology to establish his goal, his biggest challenge was how to convince people to use energy from central plant, but not their own energy produced at theirs plants. His strategy was to convince small companies at the beginning that could not produce their own energy, and later on as number of companies and factories increases the kilowatt/hour would be cheaper. In 1907 utilities share of total US electricity production reached 40 percent. By 1920, it had jumped to 70%. In 1930 hit 30%. Soon, it was over 90%. Only big corporation that found difficult to switch to central plant did not switch to. And as author said, thanks to Insull, the age of the private power plant was over. The utility has triumphed.

Digital Millwork

In this chapter Carr sees computerization in the same way he sees energy transformation from Burden to alternating current. He gives a history of computing and information technology, and each phase he relates to the phase of energy evolution. After first computer UNIVAC was invented and placed in production for business, many experts were skeptical about his profitability and usage. UNIVAC was a large in size, and was able to operate basic task of calculation. Many experts at that time predicted the future of computerization not bright, but then Presper Eckert and John Mauchly from University of Pennsylvania saw the electronic computing differently. They thought if UNIVAC can do calculations and save data in its own memory, than it could perform broader task than only basic calculations.

Not long after main computer manufacturers started to produce their own mainframe computers that were used by many companies in US at the time. Era of the computer as a utility started in 1959 when American Airlines produced a mainframe computer for printing and managing airplane tickets. According to Carr this was a break point of economy that started to be more service than manufacturing oriented, and era were investment shifted away from industrial machinery and into information technology. Not long after mainframes computers were replaced with better technology that was invented at the time transistors. However, transistors proved to be transitional phase from mainframes computing to microprocessor computing.

Not many believed that microprocessor computing will led us to new technological age, but Bill Gates did. He did not believe many experts that mainframes computing would be too powerful to be implemented in personal computing. Thanks to Bill gates the PC democratized computing. It turned corporate data centers into a universal business tool. The big mainframes computers were modified and transformed into different data centers, such as servers that are providing services to its corporations and customers. The disadvantage of PC computing was the standards of computing. Everyone could produce hardware and software with no criteria and standards to be followed. So, companies started to lose many on buying new software, which in most cases provided other software to be installed or hardware to make the software operational.

Introduction of client-server computing helped to lower the cost to some degree, but to push up client-server computing other type technology was needed. The problem with client-server computing was the low bandwidth transfer. Computer technology advanced dramatically, while on the other hand communication technology was tapping in a place. Invention of super fast optic-fiber cables enable client server computing to serve its customers from one location as fast and powerful as alternating current enabled to Insull’s ideas to become reality. The PC era is giving way to new era: the utility age.

Goodbye, Mr. Gates

Carr started this chapter with the note that Bill Gates sent to his managers. In the note was that Microsoft is switching to new era of computing and will focus more on Internet Software Service. While Microsoft’s managers were reading the note couple miles away from the Microsoft headquarter and Bill gates office in Washington, company called Design LLC bought couple acres in Dalles Oregon and started building a vast data centers called Project-2. Later on it came out that Google was hiding behind the name Design LLC. The data centers are of a size of two football fields, windowless and on top of the building are installed huge ventilators to cool of the hardware inside the centers. With those two data centers, Google has virtually covered the whole internet itself, which is used by Google’s search engine.

Company that went to the same business as Google, to provide internet services is Amazon. However, Amazon instead of parallel computing is using virtualization. The best way to explain virtualization and compare it to the client server computing is to imagine five floor building. In case of client server computing, only one person was able to live in the building. With virtualization, that building can be used by many tenants and each of them would be able to have a room, apartment or space for itself. Virtualization is also called multi-tenancy.

Today many companies are switching to utility computing because they do not want to be left in a dust. To prove this, even a big PC era company Microsoft has been stepped into utility computing business by investing $2 billions more then they previously planed for utility computing. However, Microsoft has not turned of the production of PC software, and it is on us to see if Microsoft is able to start into new era of computing with remaining of most of its production in PC era. As author stated, Bill gates announced retirement in 2008 and said that his position will be taken over by Ozzie and other executives. According to author, when Bill gates steps down the managerial role and go to retirement the PC age will come to an end. The future of computing belongs to the new utilitarian.

The White City

This chapter was mainly about the photosynthesis in electricity world. The author explained the way American middle class got to the level as it is today, and also how women changed their way of managing housework but still did not decrease the amount of time spent on housekeeping. The author noted that in the era of electrification, they needed to make sure that vast majority of people are able to afford electricity in their homes, and appliances that are used on electricity in a way to make electricity necessity in every household, office and factory. Labor wages have increased despite the automated machines have been used for production. The author explained this as circulation of money, the money they given to their employees were coming back to the electrical companies from customers in which employees of their company are included. The author at the end is stating that our society was forged – we were forged by Insull’s dynamo.

World Wide Computer

The author in this chapter has covered the history of internet and gave introduction of World Wide Computer. He sees World Wide Computer as something in the cloud. All software that we have been used so war in PC era, previously we had to install on our computers, but with the utility era we started to use software that is not even on our computer. It is somewhere else and we do not even know where it is because we do not care. The author talks about internet that was primarily developed to be the mind world, but it came out as business world. The author gives examples how ordinary people use World Wide Computer without even knowing that they have been using it. At the end of chapter author talks how virtual communities have become our reality, and people that have joined their virtual communities actually feel to belong to those communities as much as they belong to real life community. He argues that eventually in sooner future we will have to distinguish our real life from virtual life.

From the Many to the Few

The main issue author is concerned with – and he definitely worries about – is the difference of household income for middle class and overall in US. He argues that after Second World War the richest American by 1980s had 21 time middle class annual income. That number increased to around 300 times by 2001 and finally to its day, it reaches almost 500 times average middle class income. What have influence the big change is according to the author the World Wide Computer. The author through out the chapter used YouTube as example of how individual became available to earn millions of dollars just as big companies used to do it in the past. Author also argues how middle class labor is not any more needed in computerize world in the extent as it was needed before, and the introduction of free labor made individuals to be more progressive and let them start earning a big bucks. He finished a Chapter with a YouTube example saying that YouTube is available to everyone for free, but only few reap the rewards.

The Great Unbundling

The issues author talked in this chapter are mostly concern with the removing necessary information that are given by search engines, and the way Google handles is to satisfy its customers. The author sees Google as the company who is trying to satisfy its customers in a way that all searches made by user on Google will gather together, so next time user come in the data that he might be looking for, will be narrowed.

Author also mentioned the way Google, Amazon, and all service provided by “the cloud” are actually changing American culture as well as mentioned before American economy. Companies that had the biggest impact by utility revolution were companies in the newspapers business. From 2000 to 2006 newspapers companies lost to 70% of their customers.

Fighting the Net

Fighting the Net is the chapter in which author talks about security and Internet vulnerability. Chapter starts with the information about the war in Iraq and how terrorists used Google earth map to locate its targets. The author argues that countries with low military technology can easily and accurately using Google earth map locate its targets and harm others.

On the other hand, the author talks about the Internet vulnerability. He gives an example of earthquake that hit Thailand couple months ago that caused World Wide Computer to crash in couple countries including China and Thailand. Because of the earthquake three weeks Internet was down, and many companies lost billions of dollars because they could not provide internet services.

Some IT experts are in doubts about the future of internet since it gets to the point where failures could cause in a short period of domain losses of billions of dollars.

A Spider’s Web

Continuing from the previous chapter author has touched the topic of personal data security in the World Wide Computer. He starts the chapter giving example of Thelma Arnold, women whose data was tracked by AOL as a number, but later it came out that under the number her name was the real identity.  She found out over a newspaper that actually she was tracked, and all her information was seen by AOL.

Google confirms that is quite possible to do such thing, and that the government and business companies are using such services from Google, Amazon, AOL, and etc. to track customer’s data. Google CEO says that they are able to identify person by their searches made on Google Search engine. Many marketing agencies use World Wide Computer data to hit the advertising to right direction. They track searches made by the user, which could be collected as a portfolio for the user and given to companies the exact location of the user. Now, thanks to World Wide Web Computer marketing departments are working more efficiently just because they are able to locate potential customers of their product.

iGod

In the concluding chapter the author gave us couple thoughts about the future of World wide computer as well as thought of big IT leaders in the world today. Google is arguing that World Wide Computer in 2020 will be able to read our minds, and it will be somehow attached to our brains. Google’s CEO sees World Wide Computer as artificial intelligence machine that is smarter than us. In the future World Wide Computer will be the biggest computer made of the merging machines with human’s brains.

While Google is concentrating on merging machine with humans by artificial intelligence, Microsoft on the other hand is trying to figure out the way to communicate with computer with our brains and body. Microsoft argues that at one point in the future our brains and bodies will be able to transfer data just by touching each other.

At the end author gives quotes of the MIT professor Seth Lloyd which says “The Universe as a whole is behaving like a giant information processor – a computer,” referring on the people all over the world sharing their knowledge over computer machine among each other.

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To contact the author of this summary/review, please email Haris Huremovic at hhuremovic@devlogic.eu. Haris, a 2008 Southeastern MBA graduate, is presently a BMC AR Remedy System Software Engineer for DevLogic.

David C. Wyld (dwyld@selu.edu) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also has a book summary/review blog that is a collection of his students’ works at http://wyld-about-books.blogspot.com/.

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