I recently came across a fascinating book - Pop! Why Bubbles Are Great For The Economy, by Daniel Gross, author and Moneybox columnist for Slate. In it, he focuses on positive consequences of several bubbles in US economic history (namely telegraph, railroads, financial New Deal, Internet, and real state) and shows how “the frenzy of irrational economic enthusiasm lays the groundwork for sober-minded opportunities, growth and innovation.” (All quotes in this post are from the book.) In other words, excesses left when a bubble bursts, are later successfully re-used as a foundation for new businesses, and even more importantly - without those excesses, new businesses could not get so successful so fast.
The first chapter of the book titled Bubbles "R" Us talks about bubbles in general. Let me do a short walkthrough.
Bubbles "R" Us
What's a [...] bubble? [...] In every generation, people arise to proclaim that a new technology or a new set of economic assumptions and financial tools promise untold riches. The new, new thing will both alter history and free us from its musty grasp. As a result, the old rules simply no longer apply. [...] Evangelists and proselytizers urge people to abandon reason and steady habits, and browbeat those who steadfastly stick to their sense of rationality. [...] As the bubble takes shape, a chorus of pundits, shills, and true believers concoct eminently solid reasons why this time is different. [...] As the bubble takes flight, the sector swells [...]. Now the phenomenon crosses over into the larger consciousness [...]. The bubble fully aloft, investors and managers are seized by pervasive me-tooism, a conviction that the fourth, fifth and sixth movers will enjoy first-mover advantage. [...] Meanwhile, an important parallel process takes place. During bubbles, a great deal of money and energy is spent building up the mental infrastructure surrounding a new technology - convincing people to invest, to use new media, to make Internet phone calls, to reserve hotel rooms by telegraph, to send grain by rails instead of by canal barge, to buy stocks and investment trusts instead of leaving cash under the mattress. [...] Next comes the end stage. [...] Finally, when economic reality catches up to dreams and hype, the bubble bursts. [...]
Disruptive Technologies As Bubbles
As I was reading the book, I kept thinking that each major technology shift in IT essentially behaves like a bubble. No one wants to use it at first, or rewrite their applications for something that was just released. But as times goes on, there are early adopters. And then there are people and sometimes organizations who throw their weight behind a newcomer and distribute the knowledge. And then, like a bubble, it reaches a wider audience and crosses over to new domains and fields.
Unlike an economic bubble however, there is usually no or little excess of internal build out, prices for raw materials are rarely significantly impacted and me-tooism is generally not a problem (the more vendors, the better). And most importantly, unlike economic bubbles, new technologies or computing paradigms don’t have to burst under pressure of unrealistic assumptions - they can continue growing, mature and then peacefully and gradually give way to something new and even more exciting.
And as economic bubbles leave something fundamentally positive behind, so do the new technologies.
I strongly believe that a single most prominent accomplishment of cloud computing is widespread use of API to control one's hardware infrastructure (Infrastructure as a Service). Look at current IaaS landscape - Amazon EC2, ElasticHosts, Flexiscale, GoGrid and probably many more. All of them offer rich end-user APIs to do things that used to require an on-site team and certain amount of physical labor. And now it all has been automated.
Also, check out this Cloud Taxonomy and Ontology diagram that Christopher Hoff is working on. Note how API block appears in the center and even has its own color to emphasize its importance!
Hardware infrastructure manageable from software is too awesome to ignore - are you in the cloud yet?