February 7, 2017
The Force of Clouds
by Paul Carroll
Nearly 40 years ago, a Harvard MBA student named Dan Bricklin got tired of having to recalculate all the values in a spreadsheet every time a variable changed. Having been a computer science major at MIT, Bricklin sat down with a buddy and produced an electronic spreadsheet for the Apple II.
Fast forward to the second half of the 1980s. I’m at the Wall Street Journal, and we’re facing the most extraordinary wave of mergers and acquisition activity that anyone has ever seen. These were the days of Michael Milken and the Predators Ball, of Gordon Gecko and his “greed is good” speech in “Wall Street.” What unleashed this tectonic shift in the landscape of business? Dan Bricklin and his rudimentary spreadsheet.
The spreadsheet didn’t let people do anything that they hadn’t been able to do before. Yet it did the work so much faster that it created a revolution. All sorts of bright young analysts could now fiddle with combinations of asset purchases and sales based on different assumptions about interest rates and growth and reimagine the business landscape on their PCs (while generating huge fees for investment banks).
This story came to mind last week as we held our Shaping the Future of Insurance event on the Google campus in Mountain View, CA. That was partly because my longtime colleague Chunka Mui, who first made the spreadsheet/M&A connection for me, did a great presentation on how to think about innovation in insurance and partly because Diane Greene, the Google SVP who runs their cloud business, followed with her vision for where the cloud will take us.
The cloud, like the spreadsheet, doesn’t do anything that we can’t already do, but the cloud is so much more efficient that, I believe, it will lead to tectonic shifts of its own. Data will not only be freed from the silos that make sharing within businesses difficult but will be available for easy combination with other data from within the insurance industry, from companies in other industries and from public sources. It will be possible to slice and dice data assets just as creatively as those spreadsheet jockies did with other assets in the late 1980s, and the result won’t just be larger or smaller companies; the result will be whole new business models that generate knowledge that will make people’s lives fuller and less risky. We can leave Gordon Gecko out of the picture this time.