http://www.nytimes.com/2008/03/05/business/smallbusiness/05edge.html

In the article “Storing Information for Profit” by the New York Times, a new technological development called “cloud computing” shows promise in permanently altering the corporate and information network structures of our world. The emergence of cloud computing in the corporate environment offers companies “information that is stored on the World Wide Web and not in a single company’s operating or applications systems.” Technological firms such as Google and IBM are already developing technology to centralize corporate data into one aggregate server. This provides a cost-efficient alternative to the cost of individual firms developing IT by essentially outsourcing this function to a middleman such as BPO Management Services of Anaheim, California and “[relieving] a small business of the need to maintain and constantly upgrade information systems”. In addition, some companies such as Docstoc.com are taking cloud computing to the next level: by aggregating “samples of business and legal documents, including business plans, employment forms, noncompete contracts, living trusts and so forth” into an easily accessible pool of information. Access to this information can greatly enhance the consulting and referral capabilities of a company such as Docstoc.com and prove it to a valuable asset to a small to middle-sized business struggling to maximize the power of IT.

Computer industry experts such as Patrick Dolan, founder of BPO, consider

“Web-based commerce, which depends on powerful centers of computing power, recalls an old concept, “that the computing industry would evolve as the electrical industry did, with central power plants” feeding remote distribution outlets.”

Through their power to accumulate data from various businesses and organizations, cloud computing companies capitalize on creating “local bridges”. Businesses that seek information management companies such as BPO are essentially creating an edge with a local bridge. This edge offers a small business something it cannot gain from any of its other edges: access to a new, previously inaccessible component of the corporate network, that is all the subcomponents of companies that have used an information management group such as BPO. The new local bridge that forms opens up the small business to a vast source of innovative ideas and alternative perspectives. New opportunities may arise that never have come to surface had there not been this edge.

However, cloud computing, although holding the potential to greatly accelerate societal development, can cause great imbalances of power in a network system. Because of the multiple local bridges that form with a company such as BPO, BPO can potentially hold great power in the corporate network. By covering many structural holes in the corporate network, BPO controls access between many different nodes (businesses and their data). Thus, small businesses should exercise great caution when entrusting their firm’s information to an information management group, which like all other companies in the capitalist USA is still driven by the incentive of profits.