Web demographics and the cloud

A funny thing happened on the way to the Forum. In December 2008, according to global internet research firm comScore*, the world reached one billion online users. The country with the single largest online audience is now China with 180 million users, which surpassed the U.S. with 163 million connected users. North America now represents 18.4 per cent of the global online audience compared to 28 per cent for Europe and 42.3 per cent for Asia Pacific (Latin America represents 7.4 per cent and the Middle East and Africa make up 4.8 per cent). To put this in perspective, 66 per cent of the world’s online audience was in the US in 1996. Today, 83 per cent of the world’s online population is outside the US and able to track what is being said in Davos in real-time. In the not-too-distant future, there will be billions of people connected to the internet with some kind of broadband connection. The implications of this type of inter-connectedness is absolutely seismic, and only a few of us fringe technology investors, entrepreneurs and IT providers within the Davos community have begun to discuss and analyse some of the inherent long-term issues and opportunities in this trend. Let me share aspects of one such discussion that is highly relevant.

Last night was an IT Governor’s dinner on cloud computing. We’re speaking of the internet cloud – not stratocumulus. Cloud computing is the fancy new umbrella description of enabling users to access applications or other computer resources from a centralised utility-like offering. Today, if you use an internet email programme, you’re enjoying some of the benefits of cloud computing.

It’s early days for cloud computing, and vendors are still building out a lot of the plumbing that will make it possible to build and deploy applications that can be consumed on-demand by individuals or businesses, just as we currently plug into an electrical outlet to consume electricity. I won’t bore anyone about the virtues of virtualisation, or how future datacentres will be built and managed. Nevertheless, it’s important to note that there’s a lot of important computer science behind cloud computing capable of addressing key issues like support of massive scalability, data security and computer privacy, performance, reliability, and even the delivery of custom functionality to end users and businesses in a hosted or on-demand model.

How is this connected to the growing online population of the world? First, we’re seeing Moore’s law applied to an entire technology stack, not just semiconductor performance, meaning that the cost of building and consuming very sophisticated applications is going to come way down. Second, developing countries and small to medium-sized companies will no longer need to invest huge amounts in capital equipment and proprietary IT resources, as they’ll purchase services directly from cloud-based providers. Third, with the proliferation of smartphones and netbooks, even people without “real” computers will be able to access powerful cloud services, opening a large new market for vendors.

Lastly, let’s leap a few years into the future to imagine one small example of how this all becomes even more interesting. In the future, many people will choose to store all their personal information in the cloud. Why? Because it will be far cheaper, more reliable, portable, and arguably more secure for us to do this versus buying and maintaining a lot of computers and personal devices at home.

Now assume in the future that everyone’s medical records were online and could be accessed in an anonymous way (ie. just looking at medical histories and discarding all personal identifiers) by a smart software agent that would correlate all medical conditions to treatments with the explicit purpose of improving health care, identifying viral diseases quickly, and focusing resources on urgent care issues.

Our dinner group, which included key executives from Autodesk, BMC Software, Computer Associates, Google, Qliktech, and Salesforce, discussed this idea last night, and we speculated that such a collective intelligence platform could potentially save millions of lives. This glimpse into the future was aptly described by one participant as Cloud Computing Phase II, and we clearly have a long journey before we get to this stage with many thorny issues to address, not least of which has to do with consumer privacy. Healthcare is only one of many areas in which large online shared information could be very valuable.

For now, my partners and I are very excited about the potential of cloud computing and how it enables new start-ups and existing portfolio companies to address the vast needs and interests of our rapidly growing global online community.

*Note: comScore is a former WEF Technology Pioneer, and Accel Partners has an investment in comScore

Bruce Golden is a partner at Accel, the venture capital firm

Davos blog 2009

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