WhiteSites Blog
WhiteSites Blog
Since I started working on websites some 15+ years ago, I have witnessed a huge change in technology which has taken the power away from the traditional larger companies and moved it to smaller companies. However what I see is the potential for these smaller virtual companies to eventually bankrupt most large Municipalities.
This industry term gets thrown around a lot. Most people especially those in the baby boom generation don't fully understand what it means, or how its going to impact their lives. A virutal company is one in which their work force is not centrally located. Most all communications are done via Email, Phone, Text, or Video Chat. Often times they don't even have a central office. Everyone works from a home based office. As a result the company doesn't have the kinds of overhead that traditional companies might have. They usually deal in products like Software, or information services.
First and foremost. A Virtual Company does not need physical office space. They work from home. This was almost unheard of 10+ years ago. But as technology and data connections have gotten faster, it has become more economical to run a company virtually. The end result is commercial office space is going to have a very high vacancy rate.
Urban and Rural Areas will no longer be determined by population density, but instead by Internet Speed. If you live in the middle of no where, but can get a 1 Gbit internet connection, you will be the new urban area. Areas that lack high speed internet, or decent 4G Data coverage will become the new Rural areas. This also means internet connection speeds will determine your destinations when taking a vacation. Rather than just flying to Jamaica for a week, because of great snorkling. The first thing you will research will how fast the local internet is, and how much will I be charged for it.
Your Distance from work will be measured in Ping times, and Upstream / Downstream speeds, rather than driving time. This means you are not limited to hire people who live close to the office, but people all over the world.
Home values will be determined by Internet connection speed. If I was buying a new house the first thing I would ask is who is the internet provider in the area, then I would verify with the provider that they do provide coverage to this house. Reason I bring this up is I have a client that lives in a master planned neighborhood, but AT&T put in all the data lines, giving them customer rights for a certain number of years. The fastest internet he can get is 30 Mbits down, 4 Mbits up. Where if Comcast was available at his house he could get 200 Mbits down, and 50 Mbits up. Younger high tech consumers are going to care about this, and its going to affect home sales. Maybe not tomorrow, but within 10 years I see that being a huge factor when people are trying to sell a house. When Google Announced it was going to bring 1Gbit internet to homes in Austin, this caused many young people to consider moving to Austin, just for Google Fiber. These are things that younger generations think of, while the baby boomers don't have a clue.
Virtual companies benefit from low consumption lifestyles. There are litterally been weeks where I don't have to drive anywhere. Where the rest of Houston gets in their car and fights morning and evening rushhour, or pays the tolls for a faster commute, I don't have to deal wit that. Because of that I have 2 more hours of either work or personal time I get to enjoy each day.
The internet already dominates our entertainment options. Over the next 10 years it will be even more problematic. in 1990 CD sales were huge. This benefitted record companies, Distributors, Retailers, and manufacturers of CDs. 20 years later, you can't find a store that sells CDs. Everything is digital. 14 years ago DVD movies were all the rage, a few years later Blue Ray was it. Today Rather than rent a movie, or buy a movie on a disc, people just stream it using netflix. All movies reside in the Cloud, and they are accessible via your computer, your TV, or even your phone. Facebook has become the new gathering place for friends. Rather than congragate somewhere they just go online.
Any activity that can be done virutally rather than physically will dominate in the long term.
Gambling in a Casino > Online Gambling
Rent a Video > Watch it on Netflix
Sell your stuff at a consignment shop > Sell it on Ebay
Buy stuff at a consignment shop > Buy it on Ebay
Buy Non Perishable Grocieries > Buy them on Amazon
Take a Class at College > Watch Free Tutorials Online
Take your care to a repair shop > Watch a YouTube tutorial and do it yourself
Go to a Stripclub > Stay at home and watch free porn
Go to an NFL / NBA / MLB Game > Watch it from home
Go to a clients and help them with their computer > Remote into their computer and help them
Fill Car with Gas > Plug Car in ( battery powered ones )
Call your Broker to make a stock trade > Do it yourself online
And the list goes on and on
10 years ago if you grew up in the middle of no where ( Nebraska ), you had to move to a bigger city where there were higher paying jobs. This has been a trend for generations. Virtual Companies don't have to hire people based on physical location. They only have to hire people based on internet speed. This means Virtual companies can fill a position with people from anywhere in the world as long as their internet is up to par.
You can hire the best canidate for the job, rather than the best canidate that lives within a 30 minute commute. This is good as it means harder working employees will be able to maximize their pay. Running a Virtual Company isn't the same as a physical one. In the Physical Company relationships between employees and employers are formed, that makes firing, or letting them go harder. In a virtual company its easier to let go of an under performing employee. In a physical company being attractive can often times get you ahead. While in a virtual company all that matters is your performance.
For years our jobs have been outsourced to India and China. People in India and China are smarter and more tech savey than Americans. As a result some of our high tech jobs are also moving over seas. I have had companies in India contact me to see if I wanted to sub contract any of my programming work to them. They only wanted $12 / hour. Keep in mind my current rates are about $60 / hour. For projects that can be modularized, this could actually work well. But all my projects are very detail oriented, and don't use standard libraries that many other firms might use. There is also the creative and language barriers that would get in the way. I could tell a guy from India, write me a function that will fingerprint an image using a given algorithm, but I couldn't tell him to do this and make it look cool. They might be math and book smart, but they lack an understanding for American Culture, which prevents them from tapping into our Entertainment based industry which is a key part of my business. However for the types of tedious data processing that many americans do, this type of work could be virtually outsourced to china. The only thing stopping it is connection speeds and latency. Eventually communication infrastructure will be advanced enough to support this.
When people think of virtual companies they imagine a non centralized setup where every employee lives in a different city and they do GoTo meetings, and video conferencing to collaborate. However this is not reality.
When you sit down at a computer you are working on a desktop. However there is also remote desktop which is the ability to see the desktop of a computer other than the one you are sitting at. This is how I administer my server, and how I sometimes work when I am not at home. Most people think that 1 desktop requires 1 single computer. This is not correct. With the right Windows Operating System you can run multiple concurrent desktops from a single computer. There are companies that take a single rack server, put it in a data center, and then setup 500 desktops on it. Then they let their employees use their own hardware to remote into it. This is much cheaper than buying 500 desktop computers, and office space. This also creates a much more reliable environment, since the datacenter will have redundant power, and data lines, and most offices will not.
Lets face it the cost of living in the USA is not cheap. Especially in larger Cities like San Fran, and New York. So what if you could live in Costa Rica in a huge house, on the beach, and for less money than you currently pay in the states? The only thing holding back that reality is their internet is behind the times. Once Faster Internet is available in such areas, working remotely out of the country could be a reality. This has the potential to cause a surge of our working population to leave the country to escape the cost of living and taxes associated with opperating in the USA. Considering that our government operates in a buy now and pay later assuming we have revenues from a growing tax base, this could cause problems for the economy in the USA. Eventually I could see countries throttling internet speeds from outside countries as a virtual tarrif to help reduce the appeal of setting up shop over seas.
The Government ( Federal, State, City) have to generate revenue from Sales Taxes, Income Taxes, or Property Taxes. If people don't have to be located close to a city for work, they will relocate to the area that gives them the most house for the least amount of money. This will decrease Property Tax Revenues as many people will opt to build in rural areas where property taxes are almost nothing. Since they won't be putting miles on a car like they used to, their car will now last them 20+ years, rather than upgrading to a new one every 4 -5. This means once again less sales tax revenue. This also means less Gasoline used. Meaning less Fuel Tax for the government. As more people deal with Ebay, and purchase goods online, this will take away from Cities and States Sales Tax Revenues. If the Bitcoin Currency continues unregulated this will eventually allow massive amounts of money to be transfered without the ability to tax it.