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Established firms’ cloudy outlook: An opportunity for the developing world?

As we’ve discussed on WebWorkerDaily before, the cloud makes it possible for some of the smallest non-profits in the developing world to access bite-size, affordable slices of tech and talent. But perhaps, according to a recent blog post by A-list business writer Andrew McAffee, the developing world’s affinity for, and ability to benefit from, the cloud goes further than that.

According to the thought-provoking post, many developing countries are skipping straight over more traditional on-site tech and moving straight to embracing cloud solutions:

I read recently that Rajan Anandan, Google’s managing director for India, says that his country will be a ‘Cloud-first’ market for computing. The companies there, in other words, will go from having very little information technology (as is the case now) directly to embracing Cloud computing without ever going through the intermediary steps of mainframe-, mini-, client-server-, or PC-based computing.

Of course, Google employees all over the world are talking up the Cloud, but I think Anandan’s on to something. Just as many countries in the developing world have largely skipped over land-line telephony and moved straight from having virtually no phones at all to having tons of mobile phones, so too might something similar happen with corporate computing.

McAfee goes on to argue that many established America companies are unwilling to follow suit and rapidly embrace the cloud and that may be disastrous, drawing a parallel to a much earlier upheaval in tech:

A hundred years ago, American factories were in the process of converting from steam to electric power. It was a long, slow, uneven process. And it was led by startup companies and new buildings — the older ones just couldn’t justify the switch to themselves intellectually or financially — it wasn’t clear why electricity was so much better, but it was clear how much it would cost to convert an incumbent.

And how did the incumbents fare as the manufacturing industry transitioned from one power delivery mode to another? By 1935, over 40 percent of the big industrial trusts formed by 1905 had failed, and 10 percent more were limping along. Of the incumbents that survived, most became much smaller, with market shares declining by a third, on average, by the 1930s…. Will Cloud computing be similarly important? Will it contribute to large competitive shifts not only among IT vendors, but also among consumers of technology?

It’s a fascinating point to ponder and obviously an issue of great strategic priority if you’re one of the folks sitting atop an established firm deciding whether to get rid of most of your servers. But McAfee’s focus on how bad stodgy reluctance to change might be for big western firms opens up an equal opportunity to ponder how good the shift to the cloud might be for scrappy start-ups in the developing world, looking to generate not only profits but also general prosperity. Major shifts are, as McAfee, points out, not only a great danger for established firms, but also a great opportunity for the little guys who struggle to get started in a stable market.

Could the shift to the cloud be a major opportunity for entrepreneurs in the developing world? 

Image courtesy of Flickr user mikecogh.