When Google grows up

For those who haven't been paying attention, it's time to stop thinking of Google as just a search engine. Web ventures like Google Docs, Google Spreadsheets, Blogger and YouTube might not generate much revenue compared with Google's mammoth search business, but they're not mere side projects. In fact, argues Nicholas Carr, the former editor of the Harvard Business Review and author of the new book The Big Switch, those Web applications are signs of a fundamental change, a shift from the desktop to the Web that could redefine computing -- and Google's business model.

To get a sense of how big this Big Switch is, Carr points to a similar revolution: the advent of electricity. The real electrical innovation, he argues, wasn't Thomas Edison's idea of installing individual power plants in factories. It was Edison's financial clerk, Samuel Insull, who thought of creating a central plant that powers an entire region, turning electricity into a utility and vastly dropping its price.

Today, Carr writes, computing is following that same path from tool to utility. In the future, corporations won't have private data centers or desktop software. Instead, companies like Google (nasdaq: GOOG - news - people ) will host the world's data processing and storage -- we'll just pay the bills.

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