Mary Meeker is a technology analyst who draws an audience for her interesting and provocative reports on the technology industry.  You can read her latest batch of slides here.

In her most recent report she points to a logical conclusion of storing more and more content in the cloud.  That trend is a switch for an individual from being “asset-heavy” to “asset-light”.  The idea is that asset-heavy lifestyles use more space, time and money.

So physical documents and media take up your space, but not if they’re stored in the cloud.  It costs more money to buy music on physical media (asset-heavy) than to rent it using instant on-demand streaming (asset-light).  Same way with video media (DVD) vs. Youtube.

There are many categories this concept can be applied to.  Books are an obvious one, comparing the cost of books vs. e-reader content, but Meeker takes this idea further, even to labor markets.  The idea is that being an employee is “asset-heavy” because employees are fixed cost and full-time, while free-lancers and contractors are “asset-light”, an on-demand variable cost for employers.

Transportation is also migrating from the “asset-heavy” condition of owning a car to the “asset-light’ situation of using Zipcar or ride-sharing apps.

In a sense Meeker is saying society everywhere is moving from a purchase model to a subscriber model, meaning moving from ownership to renting everything.  Meeker sees technology as pushing us in this direction, but typically renters are less affluent than owners so perhaps the “asset-light” society is also a poorer one, where people can’t afford to buy to own, but can use a car occasionally or rent a streaming video instead of buying the DVD.

Or is society slimming down its inventories to do more just-in-time usage of products and services?  If so, then the economy is becoming more efficient and more green.  Asset-light means less production of physical goods and consumption is more time-aligned with demand.  In the asset-light world you use something when you want it, then it goes away.  In the asset-heavy world, you have to find a place to physically buy something, then you still have it when you’re done wanting it.

Since the asset-light society is more efficient, it will be the future for society or at least parts of the society.  Paper books are already in decline as e-books rise.  Perhaps the concept of the labor market becoming “asset-light” is the biggest change to a more efficient society.

Whether we become slaves to the cloud or if the cloud sets us free is not so relevant.  Information is becoming less physical and more virtual.  You won’t have your own data warehouse, it will be a portion of disk and memory in the cloud.  You won’t have the actual data, but your virtual identity will be a collection of preferences and usage history.  These preferences and history will be what you will take from provider to provider to access the data of the future.

The explosion of information availability where all knowledge is instantly available anywhere is where assets are as light as they can get.  The filter for this knowledge will be your own preferences and history which direct what data gets streamed to you.

So get used to owning less, but knowing more.

One Response to “Your future is asset-light”

  1. [...] This is not a dive off the fiscal cliff to poverty.  Or is it?  Read the story here.  Posted by admin at 7:00 [...]

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