Archive for the 'case study' Category

Interop Case Study #3: Cloud Computing

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In recent years, the growth of cloud computing has enabled users to utilize storage or processing power from geographically distant locations over the Internet. Cloud technologies have been lauded as a means for enhancing productivity, efficiency, and innovation by allowing on-demand network access to a shared pool of configurable networks, servers, applications, and services. According to a recent IBM study, the number of businesses adopting cloud computing to revamp existing business models will more than double by 2015, as business leaders are starting to view the cloud not just as a way to cut costs but also as a means for fundamental business innovation.

Due to the growing ubiquity of cloud computing in the digital world, examining issues of cloud interoperability offers profound insights about the legal, public policy, and technological challenges faced by businesses and other institutions engaged in this field. Berkman student fellow Matthew Becker’s recent case study on the topic, developed as part of our ongoing series on interoperability, suggests that greater scientific and technological reform, balanced with salient consideration of legal and social factors (such as user behavior and expectations), is required for successful interoperability in cloud computing.

Financial considerations can often drive small businesses “to the cloud.” Specifically, many businesses with underutilized IT departments have found cloud computing to be highly cost-effective. Simultaneously, on the end-user side, consumers have benefited from and enjoyed free or low-cost software from the cloud, which is becoming available on an increasing number of portable devices.

As explored in the case study and our book Interop, there are two integral dimensions to cloud computing interoperability: the vertical dimension and the horizontal dimension.

  • The vertical dimension involves interoperability of software, applications, and data within a single cloud. In other words, from the consumer’s perspective, does the cloud-based software work or can the cloud-based data be accessed on most Internet-enabled devices? Can this software or data integrate other applications or additional data that the user’s devices can access?
  • The horizontal dimension of cloud computing interoperability involves the concept of interoperability between clouds. In other words, how easily can a business that has cloud-hosted software or data transfer to an alternative cloud provider? Among other considerations, consistencies in cloud computing contracts, security features, privacy shields, authentication management, are vital when discussing this horizontal dimension of cloud computing interoperability. One of the primary foreseeable difficulties with cloud computing in the modern era is the possibility of a firm or individual becoming “locked-in” to the use of the cloud provider or platform with which they started.

Cloud computing interoperability promises many important societal benefits; better interoperability could facilitate much more efficient allocation of scarce computing resources, encourage greater device portability, allow increased access to computational power for small firms and developing countries, and decrease capital expenditures for such firms and nations. One such example is ULAP (University Learning Acceleration Platform), a cloud-computing infrastructure in the Philippines that is designed to help advance technological advancement in a developing country’s university program by taking advantage of open source virtualization technologies and cloud management platforms. Yet another successful example is Netflix, in which it owes its success to cloud computing by introducing on-demand streaming service based on cloud-based infrastructure. However, we must also be aware of the security, privacy, and international legal risks inherent in agreements to store data with and become reliant upon certain cloud providers.

Because cloud computing is an increasingly important part of our digital existence, the potential implications of cloud computing interoperability are profound. Household Internet names such as Amazon, Facebook, Google, Microsoft, Oracle—to name a few—are all affected daily by changes in cloud computing, which in turn affect database technologies, social networking, virtualization, public policy responses, and more. Thus, cloud computing interoperability both plays a role in influential business decisions at the microeconomic level and at the level of government policies that build the foundation on which macroeconomic forces act. Our study concludes by reaffirming this idea as well as by contending that the future direction of cloud computing interoperability will profoundly affect technological innovation in ways that shape our society and our world.

Interop Case Study #2: Bar Code Interoperability

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The second case studies in our interop series looks into Bar Code interoperability, a great case that highlights the aspects inter-industry cooperation as well as collective action problems.  The case was researched by incoming Berkman student fellow Matthew B. Becker.  He submitted the following blog post as an introduction to the case:

When approaching the subject of interoperability, bar codes were an immediate interest of mine. Practically ubiquitous today, bar codes can be found on nearly every package, and are increasingly common in many other applications beyond retail. It is precisely this prevalence that made me wonder how such a technology came to be implemented so widely.

In hindsight, the value of bar codes seems obvious, and it can be difficult to imagine that there might have been a time when their adoption was anything but certain. However, as this study demonstrates, the history was far more complex. Both retailers and manufacturers recognized that implementing bar codes could reduce costs and increase the efficiency of their operations, but only if they were adopted by the majority of manufacturers and a very large number of retailers. As such, few businesses wanted to incur the costs of implementation without assurance that there would be a return on their investment, and for a time, bar codes were thought to have failed. This issue has been called a “chicken-and-egg” adoption problem, where there is a question as to “who should go first.” Similarly, it might also be considered a collective action problem, as it demonstrates a situation where the common interests of all parties were impeded by the immediate concerns and actions of the individuals themselves.

Collective action problems appear to be quite common when exploring the subject of interoperability, which by nature requires the participation of various entities. What makes this example particularly interesting is that the collective action problem was solved without significant government intervention. Instead, the organized efforts of an inter-industry consortium of retailers and manufacturers spearheaded the effort to create and popularize bar codes, which were then furthered by adoption outside of the point-of-sale retail context (an event that was not immediately anticipated), as well as unique historical circumstances that made adoption an easier choice for most manufacturers. Finally, large retailers used their considerable weight to coerce suppliers into implementation.

There is an important connection to another of our case studies that is worth mentioning: bar code adoption was essential to the development of electronic data interchange (EDI), as it allowed computers to “recognize” items that were sold, facilitating the use of accurate and automatic sales histories and inventories. For similar reasons, the adoption of both bar codes and EDI are intrinsically tied to the subsequent rise of big-box retailers, which required efficient and (largely) automated purchasing and re-stocking. As such, bar codes provide an example of an interoperable technology that resulted not only in efficiency gains, but also helped facilitate the restructuring of an entire industry.

To read the full case study: Interoperability Case Study: The Bar Code/UPC

Interop Case Study #1: “Fitness Landscapes and the Electrical Grid”

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As previously noted, “Interop” is part of a series of experiments regarding the format of a book.  In the case of Interop, we publish it along with a set of case studies that have served as the raw data for the analysis and theory we present in the book version. As our early case studies on digital music, digital identity systems, and mash ups, all the materials are freely available online, via SSRN.  Over the next few weeks, we will introduce some of the more recent case studies, several of them authored by wonderful research assistants on our Interop research team.  Today – in time with the very high temperatures outside and the increased energy consumption – we would like to introduce the case study on the “smart grid” written by Paul Kominers. Paul submitted the following abstract to introduce the case he researched with us:

Imagine a mountain climber without a map. Rather than going downwards to return to town as might be sensible, he wants to find the highest point in the entire mountain range. But due to a blizzard, he cannot see very far; he can only tell whether a certain direction takes him higher or lower, and he has to stop every fifty yards or so to reevaluate and pick a new direction.

We can imagine many things happening to this mountain climber. He might find a path to the very highest point on the range. But he easily might not. If he finds himself near the top of the second-highest peak, he will probably follow the path to the top of that peak. In fact, if he finds himself approaching any peak, he will probably follow the path up to the top of the peak, unless the blizzard clears and he can see that he is on a lower peak. If he can see where the higher peak is, he might go down far enough to get onto a path that takes him up the higher peak, and then go straight up. Alternately, he might be lazy. He might find himself somewhere that gives him a vantage point to see where the highest peak is, but decide that he does not want to expend the effort to go from his current vantage point to the highest peak. Good enough is good enough for him.

This is an analogy for a fitness landscape. A fitness landscape is a way of picturing an optimization problem. A problem is analogized to a set of coordinates, with each coordinates having a certain fitness value; this builds up an imaginary, n-dimensional landscape. The goal, then, is to find the fittest point on the landscape, but limited sight range and unwillingness to invest to make big changes can get the search for maximum fitness stuck on a suboptimal or local peak.

Our electrical grid is much like the mountain climber stuck on his suboptimal peak. If we had had the sight range to see the next generation of technology back when we built the grid, we would have taken a different path to build that technology in the first place. And big changes require costly investments of time, money, and political capital, all of which are scarce. Further, the path is not perfectly clear. Although we have every reason to believe that a revised electrical grid would pay off substantially, exactly what a revised grid should look like is an incredibly hard problem. This makes moving even harder.

The next generation of the grid is the Smart Grid, a grid built up of intelligent, interoperable components. The Smart Grid comes from making individual grid components more self-aware of what they are doing at every moment. They can then be joined in networks that allow them to make better decisions about how each of them uses and transmits energy.

Currently, a great deal of discussion and debate is taking place. Government regulators, members of industry, and other stakeholders are coming together to discuss what a new, interoperable grid should look like. They are working together to design a more efficient and responsive electrical grid. In essence, they are finding the path to the higher peak.

Please check out the full case study on SSRN.

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