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SaaS Authors: Liz McMillan, Pat Romanski, Mehdi Daoudi, Elizabeth White, Rajeev Gupta

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Tune into the Cloud: Chain Gang | @CloudExpo #SaaS #Cloud #Blockchain

A technology that makes decentralization possible in the cloud is Blockchain

Tune into: Decentralization

More than with previous technological (r)evolutions a side effect of cloud computing seems to be an increase in the degree of centralization and concentration, not just within company organizations, but particularly in the wider commercial market. This is the most obvious with Software as a Service, where providers such as Airbnb, Uber, but also earlier cloud services such as LinkedIn and Google Search quickly established a ‘winner takes all’ distribution of market share and thus market power. And also in Infrastructure as a Service, we see an quickly diminishing  number of suppliers still having the illusion that they can keep up with the gorilla in this market.

My first scientific encounter with centralization and decentralization was during the early eighties of the last century – when Prof. Gert Nielen – one of the founders of the then just launched Business Information Science curriculum – stated that centralization and decentralization can best understood as a sponge. By squeezing the sponge (centralizing the control) we expel waste and increase efficiency, for example by concentrating information storage and processing in one place and by all using the same standard way of working. But after a while squeezing the sponge harder does not bring that effect anymore, we must make room for new ideas and new ways of working and the best way to do so is by permitting a degree of decentralization, by releasing the sponge and let many (decentralized) flowers bloom.

A technology that makes decentralization possible  in the cloud is the Blockchain. But so far block chain technology is mainly known for Bitcoins and the somewhat anarchic atmosphere that surrounds this phenomena. In essence, a block chain is a reliable journal (ledger) of transactions, which makes it possible – without a central authority and with no predetermined confidence (trust) in transaction partners – to still do business with each other. And no longer needing a central authority (such as a commercial or central bank, or a central provider such as a Google or Airbnb) also means that there is no  authority that can indulge in censorship or market manipulation.

To understand why having such an authority can be a problem, we only have to look at the music industry. It seems almost every artist  at some point during their career will run into a serious conflict or at least a fundamental difference of opinion with their record company. Would it not be much nicer if these artists could autonomically control their music distribution and IP transactions. And I mean not through free or even illegal downloads and streams but through a worldwide trusted network of micro transactions.

Now artists and musicians are a group that for centuries has been monetizing their skills and talent  as independent contributors rather than as traditional salaried workers. But increasingly this may also apply to the traditional employee jobs of enterprise organizations that people like you an me are active in. Also here workers will be increasingly expected to string together a monthly income from individual transactions. In which case it is nice if the percentage of overhead and (government) taxes that is deducted from the incoming flow is somewhat limited.

And if these two small examples are not convincing enough  to establish the need for block chain based solutions, consider the ultimate use case for decentralized low-cost but reliable transactions: the Internet of Things (IoT). Increasingly, these “things” do transactions with people, but also directly with each other. An example of the latter is a parking garage (a thing) that offers cheap parking at weekends to smart cars (other things) that are looking for a place to stay safe during the city trip weekend their owner is planning. Now from a privacy perspective it is pretty essential if both the cars and their drivers can remain anonymous and also that is possible thanks to block chain based technologies and its many associated initiatives such as ethereum.org. Not that block chain based technologies do not still have some hurdles to overcome (scalability being just one of the more well known ones) but the potential is quite promising.

Decentralized architectures may seem complex but they in many cases also have proven to be very powerful and robust. Just consider the original architecture of the Internet (although that still some essential parts centrally arranged/agreed) or the power of bittorrent and other peer2peer applications, including the original version of Skype.

I don’t expect the slight alternative or even anarchistic feel to blockchain will disappear  in the near future, even though the growing popularity of books such as “Capital in the 21th century” by Thomas Pikety and “Post Capitalism” by Paul Masson and even the (temporary) emerging of a “socialist” with a remarkably young following in the US election is a sign that the world is starting to look at alternative models to organize, allocate and monetize traditional market-driven commercial activities.

Chain Gang (That’s the sound of the people working on the “Chain Gang”) is a song that Sam Cook wrote in 1960 about a group of inmates – chained together – that had to perform forced labor for a central authority. In most part’s of the world  Cook is better known for his much more optimistic “(What a) Wonderful World.

More Stories By Gregor Petri

Gregor Petri is a regular expert or keynote speaker at industry events throughout Europe and wrote the cloud primer “Shedding Light on Cloud Computing”. He was also a columnist at ITSM Portal, contributing author to the Dutch “Over Cloud Computing” book, member of the Computable expert panel and his LeanITmanager blog is syndicated across many sites worldwide. Gregor was named by Cloud Computing Journal as one of The Top 100 Bloggers on Cloud Computing.

Follow him on Twitter @GregorPetri or read his blog at blog.gregorpetri.com