What's surprising isn't that network effects lead to dominant players; what's surprising is how quickly the user mob moves on to something new, leaving the formerly dominant player looking like last year's fashions. A more interesting observation would be how the nature of the Internet renders these monopolies so brittle. I fully expect that Facebook will be superseded by something else because, in the world of the Internet, having to park one's social relationships at one particular website is inconvenient and limited.
I actually think Wired, in its doleful observations about Facebook and YouTube, misses the much larger story, which is the penetration of the Internet into every element of everyday life and the changing nature of how we work based on the shift to digital interaction (which I wrote about on the HyperStratus blog, here). That is the big story. And mostly, we miss it or fail to understand its implications.
To wit: Google's CEO, Eric Schmidt, noted recently that today the world is creating - every two days (!) - as much information as it did from the beginning of civilization up to 2003. He attributes it to user-generated content - videos and so on.
However, he misses another information generating mechanism - devices. People note that mobile phones are now becoming full-fledged computers, capable of sending and receiving data. One often hears the statistic that, while today there are one billion computers in the world, there are (or soon will be) five billion mobile phones. On this basis, one analyst firm forecast that there will be 20 billion computing devices on the Internet by the year 2020. Impressive, eh?
Except that Cisco's CTO forecasts that there will be one trillion devices attached to the Internet by 2013 - 50 times the number predicted by that analyst firm and seven years sooner than the timeframe of the firm's prediction. Fifty times! Please note that I'm not trying to criticise the firm, more observe that nearly everyone underestimates the growth trajectory of the Internet.
Boiled down, the message here is that the Internet is becoming - actually, is - the underlying transportation system for how our economy and society operates. And the transition and growth is moving much faster than anyone really recognises. And I think this will accelerate the move to the cloud, which makes it imperative that people in IT recognise the growth and make plans along these lines:
Recognize you probably will need an external storage provider. For all but the largest enterprises, trying to keep up with the explosion of data will be impossible, both technically and financially. With an accelerating curve of data creation, today's problems are going to get much, much worse. Find an outside provider that you can partner with to create an integrated data strategy.
Figure out your bandwidth plan. You'll need more. A lot more. In addition to raw bandwidth, you'll probably need to examine the use of WAN acceleration and Application Delivery Controller devices to optimise the traffic.
Think about your investment needs if you experience one or two orders of magnitude growth over the next five years. Investment patterns and cost structures that are sustainable at one investment level may not be when ten or one hundred times as much capacity is needed.
Think about automation - hard. Most IT organisations operate in semi-automated (or even manual) fashion today. The deluge of apps and data discredits that approach.
Wired certainly has stirred up a hornet's nest with its provocative article. And, as far as it goes, it's got some good insights. Rather surprisingly, however, it falls short of understanding the true implications of the phenomena it's writing about: the explosion of apps and consumer services is awesome, indeed, but that conflagration pales in comparison to the firestorm going on around it.