A couple of years ago, Marc Andreessen famously said that software was eating the world. Despite this alarmist tone, I think he was understanding things. The future belongs to software, to automation, to data, to sensing—and ultimately, to the clouds on which such things run.
We are in the midst of a transformation to parallel that of the industrial age. At the time that steam and coal choked London, there was much wailing and gnashing of teeth: machines would be our doom, leading to idle hands and idle minds. Instead, fifty years later, we got the weekend and the end of child labor.
To not embrace on-demand computing North of the Border makes us digital Luddites, and puts us on poor footing for the sweeping changes that are to come. Sure, a self-driving car makes for good press. But think it through: when that car drives itself, do we need taxis? Parking? Long-haul trucking? Driver liability insurance? Traffic updates on the radio?
Software does indeed eat the world. And it’s the real world, the world of Timbits and Hockey and Cottage Country, not some techno-utopian dream. It’s a tectonic shift, one we’re ill-prepared to tackle—but even less prepared to compete against.
It’s the platforms, stupid.
While Canada has shown plenty of innovation in cloud software, our infrastructure providers have been asleep at the NOC. Canada lacks meaningful cloud platforms. It also lacks risk capital. Peel back the covers of a Canadian success story like Shopify, Freshbooks, Hootsuite or Beyond the Rack and you’ll find Amazon Web Services, Rackspace, and others. According to Gartner, AWS accounts for 5 times as much capacity as its dozen closest competitors.
This is serious business. Clouds aren’t just about computing—they’re about data and sovereignty. Storage consumption doubles each year, faster than network performance can keep up, which leads to a pattern called data gravity: all else being equal, data begets data, and computing becomes centralized, sucking new applications inexorably inside its escape horizon.
Even without data gravity, there are good reasons for countries to own infrastructure. Legal and ethical concerns—not to mention the prying eyes of watchful foreign governments—mean Canada needs infrastructure at home if it is to be a player in tomorrow’s automated, data-driven world.
The flesh is willing but the spirit is weak
The 2013 BSA Global cloud computing scorecard ranked Canada only 9th in the world for cloud readiness despite our advantages: our huge land mass and small population gave us an edge in telecommunications; we have a cool climate, a stable economy, a transparent legal system, abundant water and therefore renewable electrical power. We’re also a producer of top engineering talent. We’re already out of the
Worse, that same report ranks us 24th in business adoption of ICT (information and communications technology); 47th in government adoption of advanced technology (despite a massive IT budget); 24th in average bandwidth per broadband user while being 37th in cost; and a shameful 92nd in cellular costs. Netflix defaults to a lower resolution for Canadian user due to our small data transfer caps, high costs of additional bandwidth and risks of traffic shaping.
As a G8 nation, we should be ashamed. Despite our enviable advantages, we’ve become a digital backwater.
In 2014 we expect most major US cloud providers to establish a Canadian presence to tap the unserved market, turning our fantastic raw materials into their finished products, and selling it back to us. Conservatism and protectionism only delays the inevitable.
To regain our footing, we need serious changes:
- A comprehensive national strategy to accelerate our cloud platforms and cloud software, which recognizes data gravity and the soverignty it entails.
- An Internet Bill of Rights for Canadian businesses and consumers in an era where connectivity is a fundamental human need.
- A rethinking of the powers an obligations of our telecommunications oligopoly—recognizing that they were created by taxpayers, and enjoy common carrier protections only inasmuch as they provide unfettered, unbiased access.
- Investment in world-class data centers and true cloud platforms atop which we can build great Canadian technology companies.
- Encourage risk capital for investment in software and platforms for digital business, evening out tax credit programs with other forms of economic stimulus.
- Enhance and exploit the common global perception that Canada is more data friendly than our Southern neighbour.
The Canadian Olympic team shrugged off its typical humility in Vancouver, deciding instead to own the podium. The strategy worked. We need a rallying cry in technology to match that of those athletes. Instead of being polite and cautious, we need to step up and own the cloud.
If software is going to eat the world, lets make it Canada’s software. If Canada doesn’t wake up our neighbour will eat our lunch. By attracting much of our top talent and acquiring the most promising startups, they have already stolen our lunch money.