Exploring Data Centers, AI's Hidden Costs, and the Need for Tech Regulation with Paris Marx

[00:00:12] Let's apply an external critical eye to business-to-business technology. What are the hidden costs of data centers? What about the dirty secret of AI and the investments in governance that are required? Technology isn't necessarily the panacea it's made out to be, and Paris Marx has applied their lens to several of these issues and joins me today.

[00:00:34] Welcome to the Business of Tech Lounge, the live version of the Business of Tech Podcast. It's Wednesday, October 9th, 2024, and I'm Dave Sobel.

[00:00:43] We'll take questions and comments throughout the show, so make sure to put them in chat. If you have a question, we will happily respond to it.

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[00:01:08] Reminder, I am watching that chat, and we'll take questions as we go.

[00:01:12] Now, Paris Marx is a technology writer who's written frequently and among others, Wired, NBC News, and Business Insider, and speaks internationally on the future of transportation.

[00:01:21] They're also a PhD student at the University of Auckland and the host of the critical technology podcast, Tech Won't Save Us.

[00:01:30] Paris, welcome to the show.

[00:01:32] Hello. Great to join you.

[00:01:34] I'm super excited for this conversation. And for my listeners, I'm actually a bit of a fan of Paris as a reader and listener to the podcast.

[00:01:43] And I'm going to start with, you've actually got a new series, Data Vampires, and you're focused on the idea of the hyperscalers.

[00:01:50] Now, it was interesting to me because one of the basic ideas of cloud computing is that for most organizations, operating the core components of IT infrastructure is difficult to do, you know, particularly with the high level of uptimes and now with the increasing level of security needs.

[00:02:06] Email is the classic example, right? In the aughts, Microsoft sold a lot of on-prem servers to run email, calendaring, file sharing, all that kind of stuff, the basic operations.

[00:02:17] But as we rolled through the 2010s, we moved those offerings into the cloud.

[00:02:22] And in particular, small businesses gained a lot of capabilities here.

[00:02:26] But as you've been looking at the hyper center, hyper center or the data center investment, you've got a premise around data centers and some specific concerns.

[00:02:36] Give me a little insight into where your head's at on data centers.

[00:02:40] Absolutely. And, you know, my concern is largely with the hyperscale data centers, right?

[00:02:44] Because of the scale that they reach and the amount of, you know, resources, water, things like that, that are necessary in order to power these things.

[00:02:52] But as you're saying, there's also this other dimension of it, too, right?

[00:02:55] You know, I understand the convenience aspect that they offer, right?

[00:03:00] When you put all these things on the cloud or when you're taking advantage of servers that are run by Amazon, Microsoft, Google, you know, these major providers.

[00:03:09] You know, if that's not your core competency of your business, that makes it a lot easier just to focus on the things that you want to be focusing on.

[00:03:17] So I completely understand that dimension of it, right?

[00:03:19] But then when we flip to the other side of it, we can see that, you know, this gives these companies an immense amount of power over the larger economy, over all the businesses who use these sorts of things.

[00:03:29] And I think that is part of where my other concern comes in, right?

[00:03:33] There's the environmental piece of it, which certainly we can talk about a bit more if you want.

[00:03:36] But then on the other hand, there's this, you know, this kind of power that these major companies have gained over the larger economy that, you know, prompts these discussions about antitrust and monopoly and competition that we've been having these past few years.

[00:03:50] And I really see the data center, the hyperscale data center in particular, as, you know, kind of a great illustration of how that works and a really key node in, you know, that larger discussion.

[00:04:03] So I would agree with you.

[00:04:04] And I think one of the interesting things about this is the classic model should be, theoretically, right, that we build a capitalist playing ground.

[00:04:12] We let everybody fight it all out.

[00:04:14] And I always like to see, you know, and regulation is the guardrails to keep things from going off.

[00:04:19] My example that I use all the time is that, look, if we were to, you and I go into business and we're going to build a chemical treatment plant, the easiest way to get rid of our waste is to dump it, put a plant by a river and dump it on the river, right?

[00:04:33] That's by far the most economical way to do it.

[00:04:37] It's costly.

[00:04:37] And there's been plenty of that over the years.

[00:04:39] Right, exactly.

[00:04:40] And so from a capitalist perspective, it's the way to do it.

[00:04:44] And thus society says, hey, we like, you know, fish that don't have three eyes.

[00:04:48] And so we're going to put guardrails on there.

[00:04:50] And thus politics becomes the discussion of, you know, what is clean water?

[00:04:56] Right.

[00:04:57] We'll get into that.

[00:04:58] It's a dirty word.

[00:04:59] What I'm interested in understanding is, is like, give me a little bit of the insight into your analysis framework of what you're thinking about those costs.

[00:05:07] Because, you know, the argument that is made the plus side of the economy is, hey, we're enabling a lot of business.

[00:05:14] In our world, lots of small businesses are now able to do a whole bunch of stuff they couldn't do before.

[00:05:19] They can sell.

[00:05:20] They can grow their business.

[00:05:20] We've grown the economy over time.

[00:05:24] What are we measuring and balancing off that?

[00:05:27] And kind of what is that analysis framework that you're using to ask those questions?

[00:05:31] Yeah, it's a great question, right?

[00:05:33] Right. And, you know, just to pick up on what you were saying, when you look at, you know, I think the obvious example, at least when you're thinking about like, you know, the tech industry more broadly, is that you have the, you know, the kind of origins of cloud computing in about 2006 with Amazon Web Services.

[00:05:50] And that foundation, obviously, also, you know, helped by the iPhones and kind of the growth of the smartphones starting in 2008, 2009, and then into the early 2010s.

[00:06:00] You know, by the time we reach that period, we have like this explosion of startups being created and stuff like that, prompted by the smartphones release and the way that cloud computing enables that, right?

[00:06:10] Because all of a sudden, you have these companies that are just starting up using Amazon Web Services or, you know, the other alternatives, and then being able to, you know, kind of take off as a result of that.

[00:06:19] And some of them died, of course, but some of them grew quite, quite large.

[00:06:24] But then when we think about the cost of it, you know, if we look back at that period, that was still early days, right?

[00:06:30] There were a ton of concerns that came from the fact that, okay, you know, we had some companies building these bigger data centers, but it wasn't this kind of dominant mode of for like how computation happens and, you know, how all these businesses are using these sorts of things.

[00:06:45] But as we see that growth of that, particularly over the past five years or so, where we see Amazon, Microsoft, and Google in particular, because they are the dominant players in this market, really start to build out these increasingly large hyperscale data centers, you know, more and more of them in different parts, not just of the United States, but around the world.

[00:07:04] You know, what I have noticed, and what I have been noticing for quite some time was that, you know, in places like Northern Virginia, or like Ireland, where already there were a lot of these being built, we were already hearing about the concerns in the community kind of, you know, pre pandemic and some years before that in particular, right?

[00:07:20] But now, as we have seen this push to build out more and more of these data centers in more and more communities around the world, those concerns that were, you know, being expressed by those communities where there were already a lot of data centers being built a few years ago are now being heard in so many more parts of the world, right?

[00:07:38] Because when these massive hyperscale data centers move in, because they are such large facilities, because there are tens of thousands of servers under the roof here, they make a lot of demands on the local energy grid, and or on the local water system, right?

[00:07:53] In order to cool these facilities, but also in order to run all of the servers.

[00:07:58] And so, for example, you know, in Ireland, 21% of all the electricity that the country uses now goes to data centers.

[00:08:05] And in the winter, they often have to issue amber alerts, because, you know, they need to tell people like, can you reduce your energy consumption, or we're going to have to have rolling blackouts because of the amount of energy that these data centers are requiring, and how much that has increased over the past number of years.

[00:08:22] And then in other places, say, like Spain or Arizona, you have these concerns about water, where you have these regions that are already suffering from droughts.

[00:08:30] And these major tech companies are moving in and saying, we want to build these massive hyperscale data centers here, you know, taking advantage of the fact that some of these communities, you know, are struggling economically, and kind of want to accept any economic opportunities that come, you know, that are offered to them.

[00:08:44] But then as a result, you have these constraints on the amount of water that people can access, or these questions and concerns about what that might mean.

[00:08:52] So that's one main piece of it.

[00:08:54] And one final thing I would add is that, you know, when you have these massive energy demands that come of these data centers, especially as you have more and more of them being built, and, you know, the numbers, when you look at them, Synergy Research has been following this, they've really exploded in the past number of years, where there's now over 1000 hyperscale data centers.

[00:09:12] And that number is predicted to, you know, continue expanding significantly in the coming years.

[00:09:18] But what you have in, you see it in communities in the United States, but also in Ireland and other parts of the world, where, you know, regions and governments and energy regulators and utilities and whatnot are bringing renewable energies online to try to displace the fossil fuels to address, you know, try to meet the climate targets that we are collectively setting.

[00:09:39] But what they're finding is that as the renewables come online, the demand for power is increasing so significantly and so quickly, that the fossil fuels have to stay online as well.

[00:09:49] And there was a story, I can't remember if it was in the Financial Times or Bloomberg last month, basically saying that the United States now is adding more fossil fuel infrastructure faster than it has been in a very long time.

[00:10:01] And those are clear concerns, right?

[00:10:03] Especially when we look at Hurricane Milton barreling toward Florida right now.

[00:10:08] So the one that I've been looking at is, of course, they're talking about bringing Three Mile Island back online.

[00:10:12] Yeah, yeah.

[00:10:13] I mean, now, there's a potential positive argument to that, because of course, Microsoft is themselves is pouring a lot of money into making that happen.

[00:10:22] And there's an argument to be made that they're investing more into that.

[00:10:26] Now, I kind of want to get a little bit of like, let's talk a little bit of solution, because our audience is, you know, those implementers of technology that are building their businesses as part of being the ecosystem of that.

[00:10:36] But it's my sense, you know, this is kind of what capitalism does is the answer here where we need to spend more time on regulation and discipline over guiding the market.

[00:10:49] Like how if you were prescriptive about that?

[00:10:51] Again, what's your framework for thinking about the solutions here?

[00:10:54] Yeah, it's a great question, right?

[00:10:57] What we've seen in a number of parts of the world are attempts to bring in regulations around the planning of data centers, right?

[00:11:04] Regulations that give communities a bit more say in, you know, the types of infrastructures that they want to be allowing there.

[00:11:10] You know, if they're okay with the amount of energy demands or water demands that are being made.

[00:11:15] Again, you know, the difficulty there being if you're going to an economically disadvantaged community, they might just have to have to accept anyway, especially if, you know, they're really concerned about trying to get some more economic opportunity or whatnot.

[00:11:28] And then, of course, we've seen in some in some places like Ireland and Singapore temporary moratoriums on data center construction or at least connections of data centers to the grid because they could not keep up with the energy demands that these, you know, that these facilities were making.

[00:11:43] And I think I would make a larger point here, too, right, which connects to what you were saying is that, you know, before the advent of cloud computing, certainly, you know, we were using data centers, you know, the amount of computation that we were using was growing.

[00:11:58] But once you have this major business that is underneath, you know, that is under the control of, say, Amazon, Microsoft or Google, these major, you know, these major tech companies, but also major cloud providers, it creates an incentive for them, you know, because we know how business works, you need to have growth year on year.

[00:12:16] And especially in these cloud businesses, they throw off a lot of profits for these companies, you know, Amazon in particular, has really relied on the profits that have come from Amazon Web Services.

[00:12:26] And so it creates this incentive then to need to continually increase the amount of computation that we are collectively using as a society, you know, regardless of whether that computation is actually providing more wide scale benefits to people, right?

[00:12:41] If it's actually, you know, being used for use cases that are that are positive.

[00:12:46] And instead, I think what you see is that these companies are incentivized to try to increase the amount of computation that we all require that the technical tools that we use require, regardless of whether, you know, that works, because then they make more money in their cloud businesses, they can charge their clients more because they're using more computation in order to, you know, do what they need to do.

[00:13:06] And I think that that is, you know, an incentive that is created for those companies that's not necessarily in the broader interest, but works for their, you know, their business goals, right?

[00:13:17] And, you know, I think that there's a bit of a disconnect there when we think about, you know, the way forward or how we should be thinking about these businesses and restructuring them.

[00:13:26] And whether it makes sense to have that general incentive when we can see, you know, the growing energy demands, water demands, the effects on climate targets and things like that, that are the result of that economic incentive there.

[00:13:40] Well, it's interesting because there's been a rise in cloud computing cost management solutions, particularly for, you know, in for mid-market, you know, upper mid-market.

[00:13:51] But we're starting to see that much more even in small businesses, you know, those extra licenses that are still out there.

[00:13:56] You know, there is my capitalist brain wants to continually say, like, well, there's opportunity here, right?

[00:14:02] Like, we can actually make money off taking money away from the cloud providers and making sure that it keeps within our customers.

[00:14:10] And there's an interesting evolution that I know my listeners have been watching as we've evolved from resellers of technology to implementers of technology.

[00:14:20] We make a significantly more amount of money on the services than we do on, say, selling servers like we did in the aughts.

[00:14:27] So there's an opportunity here to push back.

[00:14:30] And what is interesting is that scale, it's significant.

[00:14:34] For small, for each individual business, you're trimming a little bit.

[00:14:38] But at scale, it becomes interesting.

[00:14:40] And by the way, we haven't even moved into AI because the moment I layer AI onto this conversation, we supercharged the whole thing because of the tremendous compute power involved in there.

[00:14:51] And you recently wrote, I want to kind of dive into this a little bit about the kind of the dirty secret about this.

[00:14:57] And to give you some of my insight, you know, the other dirty secret of AI for businesses is that in order to be effective with it at all, you've got to invest in data management and data governance.

[00:15:09] Because if you throw a bunch of data at, say, Microsoft Copilot, you actually don't get particularly good results back.

[00:15:17] It's not, it's, if you read the fine print of implementation, it's about preparing the data.

[00:15:23] You know, you argued against the idea of kind of robots taking over the job, suggesting that it should, you know, we should look at transforming it.

[00:15:31] I would agree with that.

[00:15:32] Where do you think kind of that space is to find the right balance?

[00:15:38] Like, what are the, what is the balance of effectiveness as you think about these coming changes?

[00:15:44] Yeah.

[00:15:44] So I would say I definitely go back and forth on AI, you know, what implementations it makes sense for, you know, which it doesn't.

[00:15:50] I was speaking to Sasha Luccioni recently, who is the climate lead at Hugging Face.

[00:15:55] And she was essentially describing, you know, the difference between these, these more traditional, you know, AI systems that we were using versus generative AI.

[00:16:03] You know, and basically saying that in some cases, you know, if you're thinking about doing a Google search and then replacing it with, you know, a conversation with chat GPT, but getting a similar result out of that, you're using about 30 times more energy just to get the same answer to the query.

[00:16:18] Right. And does it make sense to have those implementations in those places?

[00:16:23] And I think going back to what I was saying about, you know, the, the incentive to increase the amount of computation that we're using.

[00:16:30] Part of the reason that we have this generative AI that, you know, there's been all the hype about for the past almost two years now is precisely because these major cloud companies were able to have this centralized computation that is necessary to train the models and, you know, then create the implementations, the use cases for, you know, the types of tools that open AI or Google, for example, are, are putting out.

[00:16:55] And, and, and, and without that, you could still do some form of generative AI, but it would need to be much more tailored, right?

[00:17:02] Not these kind of general foundation models that companies like open AI have been creating and have been promoting as the future and also a potential pathway to artificial general intelligence and all this kind of stuff, which I think is pretty ridiculous.

[00:17:15] But, but, but, but it's like, you know, the reason that that happens and the reason that that is the type of generative AI or AI implementations in general that, that are being pursued by the companies is, you know, because of the centralized infrastructures that they've created and also the incentives that have come along as a part of that.

[00:17:35] So, and then the other piece, just to get to what you were saying about jobs, I'm always very skeptical when we talk about AI replacing jobs.

[00:17:42] And part of that comes out of, yes, we have seen technologies in the past be used to transform the way that work is done.

[00:17:49] That doesn't always mean that jobs are replaced, but that jobs can be kind of changed, like how they actually work, the type of works that, the type of work that the workers are doing.

[00:17:57] It's often de-skilling the work.

[00:17:59] So the worker is still there, but they don't require the skill that they used to, to do the thing.

[00:18:03] And then, you know, as a result, you know, management can reduce their wages or, or something like that.

[00:18:09] But for me, I, you know, I guess the example that I think back to is in the mid 2010s when the tech industry was telling us that robots were coming for our jobs, that AI was going to transform everything in the course of a few years.

[00:18:22] And, you know, up to like half of all jobs were going to be eliminated or significantly changed.

[00:18:26] And then that didn't really happen.

[00:18:28] But what we did see is companies like say Uber or Amazon roll out algorithmic management that gave them more power over their workers.

[00:18:36] And so when I see, you know, generative AI coming along and a lot of these similar promises or, or, you know, kind of scare tactics being used, I'm very skeptical that they're actually going to end up replacing jobs.

[00:18:47] But I think that in some sectors, they will try to change the way that work is being done.

[00:18:52] And that won't necessarily be on the one hand better for the workers who do that work.

[00:18:57] But also I'm skeptical that it's better for, you know, the broader society.

[00:19:02] Because I think if we look at the, say, the impacts of the gig economy today, looking back at it, we can see that, okay, it made it more convenient to like, you know, hail a ride or whatever.

[00:19:11] But there were a lot of people who became much more precarious as a result of that transformation.

[00:19:17] And because of, you know, the legal campaign that Uber has, you know, has engaged in since then, we've seen in a number of jurisdictions, it's become easier for companies to classify their workers as contractors instead of employees.

[00:19:31] You know, and I'm concerned about the broader impacts of, of that as well, right?

[00:19:35] If we're thinking about like a fair economy and the cost of living crises that we've been experiencing and all those sorts of things, that doesn't seem like the right way to address those broader social problems.

[00:19:46] So, so I'm with you, by the way.

[00:19:47] And I want to say like, you know, particularly as we're talking about this for the, for the first time, like I'm skeptical of the replacement theory as well.

[00:19:53] Yeah.

[00:19:54] I actually much more interested in the idea of augmenting people and making them better at their jobs than I am about like replacing them.

[00:20:00] Particularly because I've, my own experiences and the data that I'm looking at shows that the best investments are when we're using it to augment capabilities and make something better.

[00:20:10] Now, I want to get your take on this because I feel like shaking our fists at the cloud.

[00:20:15] When I think about Uber or large companies, like I'm kind of being angry at them for being good at the things they're designed to be good at.

[00:20:23] A business is designed to generate profit for its shareholders and to create economic stability.

[00:20:31] I'll use Scott Galloway's phrasing for this, for the people that are involved with that.

[00:20:35] I would argue that it is society's job to protect those, those bits.

[00:20:42] But we talk about it in terms of pushing back on the companies.

[00:20:47] And so, so how do you reconcile that in terms of where we should be spending our focus, both as kind of business leaders and the way we're spending our money, but also then potentially where we're spending our larger human capital?

[00:21:00] Yeah, it's an important question, right?

[00:21:02] And I agree.

[00:21:03] I think, you know, I think that the anger toward the businesses in these major companies comes out of the fact that, you know, they are emblematic of these particular ways of, you know, running a business, treating workers a certain way, what have you.

[00:21:18] And you kind of need to like put the spotlight on that so that people recognize what's actually happening there.

[00:21:23] And then you can talk about the solution to it, right?

[00:21:25] And of course, as you say, just getting angry at Uber will not change the fact that they treat their workers in a particular way.

[00:21:32] There's a really interesting interview that Dara Khosrowshahi gave a few years ago where he basically said, like, we live in capitalism, not laborism.

[00:21:39] So this is what I have to do, right?

[00:21:41] And it was like, fair enough.

[00:21:42] Like, you know, and to me that says, right, so the solution to this is not to say, oh, Uber, you should do better.

[00:21:49] It's to say, governments, why are you not regulating this properly?

[00:21:53] And why are you allowing yourselves to be captured by Uber in this way?

[00:21:56] You know, to rewrite labor rules so that Uber can do what it wants to its workers instead of saying, no, you know, your workers should be employees and that should be a standard across the sector.

[00:22:08] Instead of, you know, pushing Uber itself to do that while not pushing Lyft to do the same or something, right?

[00:22:15] Because I feel like the concerns that I hear sometimes, you know, if you're talking about wages or something like that, even from small business, is that like, if I raise my wages, that makes me anti-competitive with other people who are operating in the sector.

[00:22:29] And but if you kind of increase the floor for everybody, if you put a particular regulation in place, then at least everyone is on the same playing field.

[00:22:36] Right. And I'm sure there will still be people who won't like certain regulations.

[00:22:40] You know, that that's that's life.

[00:22:41] That's, you know, different people have different views on these things.

[00:22:45] But at least then, you know, everyone needs to operate from the same standard.

[00:22:48] And I think part of what has concerned me over the past, say, 15 years is that a lot of the hype around the tech industry and particularly these large tech companies has allowed them to claim that they are kind of separate or distinct from, you know, the traditional businesses in the sectors where they operate and that they should be treated different from a regulatory perspective where their businesses, their businesses can operate in a way that, say, traditional businesses maybe couldn't necessarily.

[00:23:19] Operator, they could get away with things that other businesses wouldn't be able to get away with.

[00:23:24] And for me, I just kind of want to see that, you know, playing field level.

[00:23:28] Maybe I want to see, you know, the levels of the standards raised as well, just just broadly.

[00:23:34] But I think that is where some of my concern comes in.

[00:23:37] So like when I see, you know, discussion around, you know, raising minimum wages or around antitrust for these large tech companies, I don't think that that always goes far enough.

[00:23:48] Necessarily, but I think that those are welcome conversations to try to say, okay, you companies that have really grown enormously over the past 15 years.

[00:23:57] Now you need to start to play by the rules that everyone else plays plays by because part of the reason you've been able to grow so large over that time is because, you know, the attention of regulators was not really on these particular companies.

[00:24:10] But now that they've become so big, you know, that is obviously what has happened there.

[00:24:16] And I think, you know, and I'm sure, you know, people in your sector would recognize this as well.

[00:24:22] But when these major companies have as much power as they have, it allows them to squeeze kind of everybody else.

[00:24:27] Right.

[00:24:27] And that doesn't work out for anybody, I don't think.

[00:24:30] Well, I'd agree with that.

[00:24:32] But there's the counter argument.

[00:24:34] And I kind of want to get your insight into this is that regulation actually does favor the large companies in that they because they've got armies of lawyers.

[00:24:41] Right.

[00:24:41] They are well funded.

[00:24:43] They are able to influence the political system.

[00:24:46] And in particular, like if we look at I'm going to call it GDPR in Europe.

[00:24:50] Right.

[00:24:50] As a as a privacy framework.

[00:24:53] Listeners know that I've long since said the U.S. should have something.

[00:24:57] Nothing is a problem.

[00:24:58] But the Europeans have something.

[00:24:59] And it has tended to favor larger companies that are able to navigate it at the expense of the smaller companies.

[00:25:06] Right.

[00:25:06] And then you have a very, very simple examples like, you know, in in Philadelphia, a bridge collapses.

[00:25:12] And, you know, the governor essentially says, well, we're going to kind of look the other way on regulation and stuff.

[00:25:18] And then they get it repaired in two weeks.

[00:25:20] And there's an argument to be made of, wow, things get done when we move back.

[00:25:25] That's the classic argument on this.

[00:25:28] You know, both that it favors the large and it favors, you know, lack of regulation favors speed.

[00:25:34] How do you how do you reconcile that, particularly for an audience of people that are the smaller companies that are not able to deal with it?

[00:25:42] That infrastructure.

[00:25:43] Yeah, I definitely agree with you on both points.

[00:25:46] Right.

[00:25:47] And this this is part of the difficulty.

[00:25:49] Right.

[00:25:49] Because if you have a company that is as powerful as, say, you know, a Google or a Microsoft, they have the lobbying power to just, you know, go nuts and make sure that the regulations that get written are ones that favor them.

[00:26:02] I remember there's the story in Time Magazine last year about how, you know, you might remember.

[00:26:08] But after, you know, kind of the chat GPT hype started, Sam Altman went on this kind of world tour where he was talking to regulators and governments around the world.

[00:26:17] And the story came out in Time Magazine last January, I believe it was January of 2023, to be clear, saying that, you know, the regulators or maybe it was I don't know.

[00:26:29] It was January of some year.

[00:26:31] Maybe it was early this year.

[00:26:32] Anyway, but so they published this story basically saying that when Sam Altman was in Europe, he spoke to the regulators who were designing the new AI regulations there.

[00:26:44] And he specifically requested a carve out for the types of work that OpenAI was doing.

[00:26:50] And then when these regulations were presented, what do you know?

[00:26:54] That carve out was there, right?

[00:26:55] It was there.

[00:26:56] Right.

[00:26:56] Yeah.

[00:26:56] And so I completely agree with you, right?

[00:26:59] I think that regulations are needed to address these problems.

[00:27:03] But the problem that we have is that our governments can be so easily, you know, captured by these major companies, which on the one hand speaks to why we need to address the amount of power that they've built up.

[00:27:14] But on the other hand, you know, the issues that have been that have built up in government over quite a number of years.

[00:27:20] And of course, this isn't just in the United States.

[00:27:22] I was just talking about Europe, for example, but many other governments where there has not been, I think, the kind of pressure from the other side of things in order to say, you know, not everything should favor these massive tech companies, you know, that have certainly delivered a lot of economic advantage to the American economy, of course.

[00:27:41] But, you know, that constrains, you know, other businesses, smaller businesses, potentially, and also has, which is, I think, the discussion that we're increasingly having a number of negative impacts on the society more broadly that maybe we should have been paying a bit more attention to as these companies were growing and that now we're trying to address after the fact, which makes it harder to do.

[00:28:02] Right. And just on your other piece about, you know, the regulations potentially slowing things down and holding things back.

[00:28:07] I feel like this is like a general problem in North America.

[00:28:12] And I don't have a specific solution to say, like, this is what we need to do to address it.

[00:28:19] But I think that just in general, like you look at when we try to build infrastructure, whether it is, you know, bridges or say mass transportation, you know, you see when, like, say, in New York, they try to build subway lines and it costs just crazy amounts of money.

[00:28:32] Right. It takes forever. Like any time that the government tries to do these projects, it seems to have this really difficult time with it.

[00:28:41] Meanwhile, you can look at, say, and Europe is not perfect, but Europe seems to get things done at lower budgets and more quickly than we do.

[00:28:49] You know, Paris, for example, is in the process of this massive build out of its metro system.

[00:28:53] And it's like, I can't even imagine something like that happening in North America. Right.

[00:28:58] And then, of course, you look at Japan, you know, another kind of peer country, you know, high income country like ours.

[00:29:04] And they, you know, are also able to build infrastructure.

[00:29:08] Like, say, if a bridge is broken, they can replace a bridge quite easily and it doesn't take nearly the amount of time that it takes.

[00:29:14] So I don't have, like, a particular solution there, but it feels like something is broken in how our governments work in North America specifically to try to do this.

[00:29:25] And unfortunately, I don't have a fix, but I agree with you.

[00:29:28] At least we're talking about it.

[00:29:28] And by the way, listeners, if you've got any last questions as we get into the last topic or so, I definitely want to throw them up.

[00:29:34] So, Paris, I want to shift gears a little bit because I wanted to ask you kind of about something that is implied a little bit in what we've been talking about.

[00:29:42] I think I want to get specific about it.

[00:29:43] But you've talked a lot about Google, about Amazon, about Uber.

[00:29:47] It's my observation that you've a little bit less focused on Microsoft, you know.

[00:29:53] And I kind of wanted to ask a little bit why.

[00:29:56] And the reason, to give you some perspective, I know our listeners think about this all the time.

[00:30:00] Microsoft is a very key player in the vast majority of small and mid-sized organizations.

[00:30:07] There's a reason why everybody runs Office and the majority of people are on something like Microsoft 365.

[00:30:12] Give me a little bit of your perspective on Microsoft and either like, are they different in your mind?

[00:30:17] Have they been in another category?

[00:30:19] How do they fall in this spectrum?

[00:30:21] I feel like they've just been so normalized, like in the sense of what their businesses are and how dominant they are.

[00:30:29] And I think the other piece of it as well is that when we're thinking about, say, the harms that have arisen as a result of these businesses that have been developed over the past, say, couple of decades.

[00:30:39] You know, if you think about Amazon's growth or Google search engine or even Apple's App Store, which, you know, is kind of a post 2009, 2010 sort of a thing.

[00:30:49] Like these are more novel developments in what has happened, whereas with Microsoft in particular, you know, we had an antitrust case with Microsoft in the late 90s, early 2000s.

[00:30:59] So we've already kind of been over that.

[00:31:02] And, you know, they got through it rather unscathed in part because of the George W. Bush administration coming in and, you know, signing a pretty favorable deal with them so that they wouldn't be broken into two separate companies.

[00:31:14] And then, of course, you know, Bill Gates kind of rehabilitating his image through philanthropy and these sorts of things.

[00:31:20] So it has been really interesting to me because Microsoft is one of the most valuable companies in the world, but just generally there has not been the same degree of scrutiny on their business practices as there has been with these other major large tech companies.

[00:31:34] And again, I think part of it is just because what they do is so normal, but also not as like consumer facing or not as clearly harmful to consumers as it is with some of these other companies.

[00:31:47] And I feel like that is sort of changing right now, especially seeing what they've been doing with AI and open AI in particular.

[00:31:55] And, of course, the broader investments in the generative AI, you know, kind of startup field where investigators have started looking into whether some of these deals, you know, are kind of anti-competitive, even though Microsoft is not outright buying the companies themselves, but finding a way to invest in the companies and get access to their technology and have a certain degree of say over how they operate.

[00:32:20] And, of course, make them reliant on the Microsoft Azure platform without actually buying them outright, which has been really successful for them in the, you know, the case of open AI in particular.

[00:32:32] So I think that is part of the reason for it.

[00:32:34] And, of course, you know, my focus is mainly because, you know, there are certain companies that I have been focused on over my kind of career of doing this.

[00:32:43] And Amazon and Uber are two of the key ones, you know, and I've been more interested in Apple from like, I guess, a consumer standpoint.

[00:32:50] You know, I use Apple devices and things like that.

[00:32:53] And so that's probably part of the reason that my focuses are on certain companies over others.

[00:32:58] But I do think that it's reflective of kind of the larger approach that, say, tech media or even researchers have been looking at where Microsoft is kind of like the known quantity.

[00:33:09] Like it does some bad stuff that you don't necessarily like.

[00:33:12] But, you know, it's not as it feels not as outrageous as what some of these other companies are doing, maybe because what they're doing feels a bit more novel.

[00:33:20] Whereas Office and Word and things like that have been around for a long time.

[00:33:24] And sure, Microsoft has transformed how those businesses work, especially over the past decade or so.

[00:33:30] But, you know, it's still like, OK, we all rely on Windows.

[00:33:33] You know, we don't use Internet Explorer or Edge anymore.

[00:33:36] You know, we have some new browsers and Microsoft's luckily not forcing us into those any longer.

[00:33:41] But, yeah, I think that is that would be like my explanation of why there's less of a focus on on Microsoft.

[00:33:47] So I'll completely buy into that and I will sort of wrap us up by saying by also observing that they went through the scrutiny, had penalties.

[00:33:56] And many of the Internet companies we just talked about came because of that scrutiny and because of that.

[00:34:01] So for those of you know, I know, again, my small business audience and I feel this pain, too, is when we think about regulation may being a bad thing.

[00:34:09] In some cases, it has been a real unlock for new technologies.

[00:34:13] And I think it's important for us to remember that.

[00:34:14] Yeah.

[00:34:15] And that's part of the discussion now, too.

[00:34:16] Right.

[00:34:16] Like as there's these these antitrust cases against, say, Google and Amazon and these other ones, you know, part of the discussion is, does this make it so that they are not, you know, acquiring their potential competitors?

[00:34:28] And in the next five years or something, we will have companies that are properly competing with them in a way that wouldn't have been possible because of their market dominance at the moment.

[00:34:38] You know, we'll have to wait and see what happens there.

[00:34:40] Right.

[00:34:41] But certainly that's one of the things people are discussing at the moment.

[00:34:45] Well, Paris, I give you this all day, so I'm going to be respectful of your time.

[00:34:48] That new series on the Data Vampires.

[00:34:51] How can people get access to that?

[00:34:53] Absolutely.

[00:34:54] You know, it's just a special series from my podcast, Tech Won't Save Us.

[00:34:56] So any podcast platform where, you know, people listen to podcasts, they can find it.

[00:35:02] You know, it's pretty simple.

[00:35:03] Just look up Tech Won't Save Us.

[00:35:04] And the episodes of that will be coming out every Monday for the rest of October.

[00:35:08] Well, cool.

[00:35:09] Paris, thanks for joining me today.

[00:35:10] This has been fascinating.

[00:35:11] Absolutely.

[00:35:12] It's been really fun.

[00:35:13] Thanks so much.

[00:35:14] Well, I want to preview what's coming up this weekend.

[00:35:16] Colin Graves specializes in helping organizations build robust data capabilities from establishing the right data infrastructure and governance to operationalizing data-driven decision-making.

[00:35:27] He discussed with me the importance of laying a solid foundation before pursuing advanced analytics or those AI initiatives, and he highlights the potential for natural language querying to revolutionize self-service analytics.

[00:35:39] Let's get a preview of that interview dropping this weekend.

[00:35:43] There's three primary phases.

[00:35:45] I mean, you hit the nail on the head.

[00:35:47] A lot of folks come to you and just say, well, if I just program, that continues to deliver value.

[00:35:51] So we have three core phases of our implementation or, I guess, our project lifecycle.

[00:35:58] The first is implement, and that's sort of what you alluded to.

[00:36:02] We're assessing where you are.

[00:36:03] We're identifying the business value or the business problem that needs to be initially solved with data.

[00:36:11] Everybody kind of understands where they want the last domino to fall.

[00:36:14] It's complete utopia.

[00:36:16] Everything's automated.

[00:36:17] My data is super clean and trustworthy, and everyone raves about it.

[00:36:21] They don't really understand the first domino to flick over to cause that chain reaction to happen.

[00:36:28] And so we're standing up typically minimalist data infrastructure at first.

[00:36:34] We don't try and overbuild because, let's face it, we're in the cloud.

[00:36:38] The cloud is very flexible.

[00:36:39] It's very nimble.

[00:36:40] If somebody wants to eventually have a Formula One car, that's great.

[00:36:46] Maybe they can start with a scooter and build that muscle memory from there, get through that change management process.

[00:36:54] So.

[00:36:55] Patreon supporters already have this.

[00:36:57] If you want to listen now, it'll drop on the weekend on both YouTube and the podcast feed.

[00:37:01] If you're interested, I really do encourage you to listen.

[00:37:04] Colin had some real thoughts on the way to deploy data governance.

[00:37:07] Visit patreon.com slash MSPRadio to sign up now.

[00:37:10] And let's thank Sales Builder, our Patreon sponsor whose support makes the show possible.

[00:37:15] Focus on your IT sales workflow with the power of automation and visit them at salesbuilder.com.

[00:37:21] That's B-U-I-L-D-R dot com.

[00:37:24] And vendors, you too can get your name mentioned on the live show.

[00:37:27] It's a simple monthly subscription.

[00:37:29] Visit patreon.com slash MSPRadio to learn more.

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[00:37:46] If you've got a question and are listening to the recording, send it in at question at MSPRadio.com.

[00:37:52] Thanks for joining me for the Business of Tech Lounge, and I will see you next time.

[00:38:03] Bye.