Higher Energy Prices == More Value in Software, Bandwidth

I got to see Arthur Rosenfeld speak at UC Berkeley's Physics Dept. graduation last week, when my younger brother finished up there as an undergrad. Dr. Rosenfeld's lab and LBNL worked in both research and policy, producing technical advancements in energy efficiency focusing on physical buildings.

His talk got me thinking that not only can information processing produce efficiencies ... but actually that higher energy costs may also be a boon to all manner of information processing and software applications, because it increases the general (relative) value both of processing and of bandwidth (and associated infrastructure).

The gains apply not only to applications directly focused on saving fuel (e.g. logistics systems), but also all of the productivity apps that allow more (or the same) industrial capability with less effort, time, and raw materials. This productivity argument is a standard ROI type argument about information systems. It just takes on a new urgency as forecasts for the energy component in these industrial processes show a bigger number.

Also worth re-examining are the applications which are meant not to make moving physical stuff more efficient -- but to obviate the need completely. The U.S. Mail's logistics capability may make Netflix much more efficient than driving an SUV to Blockbuster ... but BitTorrent makes Netflix look like the stone age. It's no surprise that the easiest thing to move as data is a data-like-object.

The other category is meat-like-objects. Telecommuting and satellite work sites are vastly more usable and useful now than they were even 6 years ago when companies (famously Sun) ditched office space after the dot-com crash.

While issues remain with 100%-offsite work, I believe the era of traveling to the office five days a week for 'info-worker' jobs is pretty much over. Already, I see many companies allowing or encouraging people to work somewhere else part of the week, coming in only 2 or 3 days. That movement can become broader based as the support software and bandwidth improves. In the verticals, the telemedicine model will become more prevalent.

We can also create improvements in industries where the physical world is the point, like grocery stores -- and no, I'm not thinking about stuff like WebVan even if Safeway.com does pretty well, and amazon.com can ship you a year's worth of pasta. I'm thinking that sharing and augmenting data from a store (and its upstream supply chain) can reduce the number of trips people take to the store ... you won't go when they don't have what you're looking for; you'll look at the produce or the microbrews remotely and decide whether to bother; you'll spend less time in the store, which means a smaller (both in business hours and space) site can service the same volume of sales.

But I'm getting too specific: my point is not to envision kooky Internet schemes for avoiding bruised apples. It's that all of the software we have (operating systems, applications), hardware (GPUs, quad-core procs), and bandwidth becomes measurably more valuable as they becomes a viable substitute good for energy. And where we always measured productivity by looking at time-replacement, that time becomes doubly valuable when we are also paying more to heat, cool, light, or motorize the environment where people need to spend that time.