The Cloud Economy: Part 3

I disagree a bit with Pine and Gillmore about the Experience Economy.  They describe it as following the agrarian, industrial, then service economy.

To me, all of the economies they outline are about service.

Services are supposed to be the exact opposite of physical goods, but the line between a material good and a service is often cloudy.  To me, it’s all about the ultimate experience my dollar (or time) buys.  It’s no longer important whether I get something physical in return.

For instance, if I could buy a subscription to a service that would transport me instantly from place to place, I would no longer have any use or inclination to have my own car.  There are plenty of examples like that in my life, and I’m sure yours too, where things we thought were important because they were physical have become not as important because digital or service alternatives exist.  It’s why I read (well, for years now) online news channels like and instead of picking up a newspaper or magazine.

So, I’ve tweaked a bit the spreadsheet I shared in a previous entry about the Cloud Economy.  I changed the Virtual Economy (the last column) to the Experience Economy.  That’s a bit more descriptive and on the mark.  The service economy is not included because, again, I believe they are all about service.

A brief summary:

The agrarian economy marked the rise of civilization, where raising crops and domesticating animals enabled food surpluses, which resulted in stratified and higher density populations.  Mercantile and feudal economies followed.

The industrial economy was an evolution of this, where technology advances were made rapidly, allowing goods and services to be delivered on a much wider scale.  This was when marketing and PR used practices akin to “yelling at strangers” (Seth Godin).  The audience volume had to be large because only a very small percentage of those reached would buy what you had to sell.  Heads of industry chose and drove technology improvements and upgrades.

The digital economy marked the beginning stages and the adoption of what we now know as the Web.  In this economy, Web 1.0 marked the rise of permission-based communication and search engines.  Although there were almost innumerable bits and bytes traveling around, we simply didn’t know or understand the value of it all.  It was a very chaotic time and business larges chose and drove technology improvements and upgrades, trickling those down to the lower layers of consumers.  Content was king.

The knowledge economy (Web 2.0) is driven by people who now have tools for collaboration and connection to each other.  Folksonomies and trusted content rule and businesses now find themselves required to have 2 way or multiple level conversations with their constituents. Conversation and your social network is king, with consumers largely driving technology innovation and adoption.

The cloud economy (Web 3.0) is about the democratization of raw computing resources, allowing anyone to be a developer and deliver a service with virtually no IT infrastructure.  Problems that were in the realm of IT will be resolved by knowledge workers.  Cloud computing will be the infrastructure for the vast and complex “social brain” which will dictate the direction and relevance of the conversation.  This provides the building blocks for the next economy.

The experience economy (Web 4.0) is enabled by the cloud infrastructure and technology improvements (such as TB/s bandwidth speed) that will enable truly real-time interaction between a person’s physical and virtual social networks.  Devices will become smaller and the large portion of computing will be done in “the cloud”.  The “experience” will be immersive and real-time.

It’s critical for the leaders who take us into these new territories to understand these different economies and have a passionate vision for their place in the future phases.  Great leaders I’ve had the opportunity to work with in the past always know where they’ve been, where they’re going, and can sprinkle inspiration and motivation on those around them like it’s fairy dust.

Enjoy. -Y

The Cloud Economy Part 3


Author: Ynema Mangum

Ynema Mangum is an experienced, data-driven principal product manager of mission-critical composable infrastructure at HP Enterprise. Constantly curious, her passions draw her to emerging technologies. She joined HP 6 years ago as a solutions architect for private IT cloud computing. She then served as owner of the enterprise social collaboration domain at HP, responsible for its future direction. Prior to her current position, she was a senior product manager for the massive HP ConvergedSystem 900 for SAP HANA. At SUN, she was a product line manager for cloud computing, responsible for the requirements for common subsystems of the Sun Cloud, as well as user personas, industry analysis, and competitive research. Her product experience also includes building web based database management systems at BMC Software targeted at Oracle, Microsoft SQL Server, Sybase, DB2 and DB2 UDB. Y provides an invaluable hybrid mix of strategist, architect, product manager and product marketer with an unbendable passion for the user experience. Her entrepreneurial experience allows her to understand business as a whole and drives her to make decisions and execute quickly. As an added bonus, she is certified in ITIL v3 best practices for IT and Pragmatic Product Management. Ynema is a change agent. She considers herself a determined influencer and a connector whose collaborative nature ensures success in introducing new concepts and services into the mainstream -- even in the most complex environments. She thrives on doing what seems to be impossible, and enjoys taking calculated risks in her personal life -- snowboarding, skiing, SCUBA diving or wake boarding when the season is right.

2 thoughts on “The Cloud Economy: Part 3”

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