Chapter 1. Introduction: The Shift to the Cloud
Thomas Edison, as we all know, is credited not only for inventing the light bulb but for commoditizing electricity. Many other scientists also contributed, both before and after Edison, but it was Edison’s assistant, Samuel Insull, who built a business model that would commoditize electricity and make it available as a service. Insull came up with the concept of the power grid, which enabled economies of scale that made electricity available to factories and other businesses as a utility.1 Today, we pay for electricity based on consumption: the more you use, the more you pay; the less you use, the less you pay. If this sounds like your cloud experience, read on.
Before electricity was a public utility, companies had to create and manage their own electricity, with waterwheel mills or hydraulic generators located close to their assets that needed power. These were incredibly expensive, closed systems. Only the richest could produce enough power to run product assembly lines, warehouses, offices, and sweatshops. The operating model was very simple back then. Such firms usually employed a VP of Electricity, who managed a staff of skilled electricians and generator operators. This group owned the power, and all other parts of the company were consumers of that power and at the mercy of permissions from the power provider.
The introduction of the power grid changed all this. Now any company of any size could access the same power grid ...