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As I’ve mentioned previously, there’s been a lot of excitement about cloud communications recently. We’re seeing an inflection point beginning with wide spread agreement about the ROI of hosted solutions and continual increase in awareness of this value.

Nick Carr, author of “The Big Switch,” a best-selling account of the transformative effects of cloud services and cloud computing has a great low-tech historical analogy for this, comparing the shift in our industry to a similar shift 100 years ago in how business and factories obtained power.

He talks about how in the 19^th century, factories or mills would be built on a river. Owners would then have large waterwheels made to generate power for the factory. In essence, every business would need to invest in, and maintain its own local power production. That’s a complex, and costly undertaking, and resulted in mill owners spending more time on complex hydraulics and drive shafts than on their core business.

Of course, this model sounds ridiculous now. Within a few years of the turn of the 20^th century, these premises-based production systems were abandoned, left to decay, a historical anomaly – because now businesses were getting their power from “the cloud” – from new, centralized ‘electric companies’ that revolutionized manufacturing:

“Manufacturers came to find that the benefits of buying electricity from a utility went far beyond cheaper kilowatts. By avoiding the purchase of pricey equipment, they reduced their own fixed costs and freed up capital for more productive purposes. They were also able to trim their corporate staff, temper the risk of technology obsolescence and malfunction, and relieve their managers of a major distraction. Once unimaginable, the broad adoption of utility power had become inevitable….the age of the private power plant was over. The utility had triumphed.”

The above is an excerpt from Mr. Carr’s astonishing book, a best-selling account of the transformative effects of cloud services and cloud computing. Mr. Carr is the keynote speaker at this year’s BroadSoft Connections Users’ conference, which is shaping up to be our best Connections event ever. I’m very much looking forward to Mr. Carr’s keynote, and certainly excited about seeing as many of our customers and partners as possible as well – as it’s our customers who are building the solutions that will eclipse today’s ‘waterwheels’ .