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Why Big Tech Companies are Building Cities, and Why Many are Worried

tech companies building cities

Situated in Menlo Park, south of San Francisco, is a 59 acre of land adjacent to the Facebook campus, this piece of land is proposed to be a fully self-contained and functional city called Willow Village. Here is why big tech companies are building cities, and why many are worried.

However, there is one notable thing about Willow Village that makes it different from other communities in the US; it is owned and being developed by American social media giant, Facebook Inc. Proposed Plan for Willow Village, source: menlopark.org

The Facebook Village

In a few years’ time, Facebook employees will be able to work, live, and sleep without leaving the property of the 5th most valuable tech company in the world. This city is proposed to have more than 1500 homes, a pharmacy, a grocery store, office buildings, conference spaces, a 193 room hotel, and a public park.

Recently, there has been a trend of big tech getting involved in large construction projects with Alphabet Inc., Google’s parent company, investing One Billion Dollars in its plans to build 20000 homes in Mountain View and Apple finishing one of the world’s most expensive buildings; Apple Park estimated at Five Billion Dollars.

Privately Owned Cities

The future will surely see employees of large tech companies living luxury lives in private owned cities, rent-free, and with many benefits in the comfort of the property owned by the company they work for.

The financial crisis of 2008 ushered in a dramatic change in the way individuals choose college degrees. While the total number of available jobs took a downward turn during the recession, college students were far more likely to stay in school or go back and apply for a more marketable major. More people applied to majors that were more marketable or could provide better jobs rather than majors that interested them. 

According to a 2005 study, unemployment rates have an effect on the way people choose college majors, this can be seen in the way majors related to healthcare, engineering and computer science exploded after the great recession while the number of applicants in education, philosophy, and religious studies saw a decline. 

With the average salary of a US computer and information technology worker being $88,240 — which is $39,810 more than the average salary of all other occupations — it is easy to see why high school graduates are flocking to these majors in large numbers. 

Computer science students

With the influx of computer science students, many people wonder why the market is not saturated. Students are picking college majors according to their career prospects, getting a degree in computer science is easy to obtain and salaries are exceptionally high, which means the market should be flooded with computer scientists.

The problem is that demand for computer scientists has increased tremendously, however, the market is not flooded because universities have a hard time producing computer science professors, which in turn reduces the number of computer science graduates.

Rather than having to wait at least nine years to get a bachelor’s, masters, and then a doctorate, CS graduates would rather enter the job market and get paid the same salary they would have if they worked as a college teacher or even more because of the extra five years experience.

Why Are Tech Companies Building Cities?

The shortage of computer science professors has put universities in a tight spot, they can either choose to accept a particular amount of high school graduates applying for computer science majors, or they can increase class sizes to increase the number of CS graduates and risk hitting the staff to student ratio and lowering the schools ranking.

New shortage in grads

Today, there is a shortage of computer science graduates, so tech companies or organizations that wish to employ these graduates have to go the extra mile to please them with high salaries, stock options, bonuses, and many more benefits or, risk losing them to other nearby tech companies, leaving employees with an advantage.

Due to the fact that tech companies are so concentrated in certain areas like Silicon Valley, changing jobs is especially easy with huge tech companies like Google, Facebook, and Apple; being just a couple of miles from one another, Tech companies have a hard time retaining their employees as employees do not even have to change homes if they decide to switch jobs. Tech companies, therefore, have especially low turnover rates.

Average stay of employee in one company

The average employee at Google or Apple stays a little less than 2 years before calling it quits. The low retention rates of tech companies pose a huge problem and many are striving to remedy it.

Ways to garner retention of employees

With the low retention rate of employees, companies have to find new ways to retain their employees thus employers have to go the extra mile to make workers happy, with gym memberships, cell phones, fitness, and wellness programs, wifi equipped busses and subsidized uber rides.

A very good and effective way of keeping employees though is to involve themselves in every aspect of their lives. This is where company-owned homes come in, It is much harder to leave a company if that same company owns your home and that of your friends and family. 

By increasing employees’ dependence on the company, we can surely expect to see the average lifespan of employees increase, Companies have been trying to do this by building homes, with Facebook, even going as much as paying a $10000 bonus to employees who live close to the office.

Why Many Other Businesses (and People) are Worried

All the many benefits employees get from companies trying to keep them, surely increase employees’ well-being and retention rates, which is beneficial to both staff and organizations but might come at the expense of society.

Companies try to make commuting to work more enjoyable and living with the ultimate goal of increasing employees’ retention rates by providing transport like wifi equipped buses, cab rides and houses for employees, but by doing so, they use public infrastructure like bus stops without improving the quality of public transportation.

Affordable housing

Because of the tech boom and the concentration of tech companies in tech hubs like New York and San Francisco, housing has been made less affordable as there has been an increase in the average rent of these cities.

There have been a lot of concerns about the fact that as big tech companies expand their physical presence, the line between public and private is blurred.

Not only are the lines blurred, but local governments find themselves not governing but being governed by these companies.

Take for example; in 2014, facebook funded a police station next to its campus along with offering to pay an officer $200000 as a yearly salary. It is time for the country to reevaluate the power companies have over the government.

Please add your opinion in the comments. I’d like to know.

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Why IoT Needs an Open Ecosystem to Succeed

iot open ecosystem

Imagine if the internet had been built as a closed ecosystem controlled by a small set of organizations. It would look very different from the internet we know and rely on today. Perhaps this alternate version would run on a pay-per-use model, or lack tools and services that have been developed over the years by independent contributors and scrappy startups. Here is why IoT needs an open ecosystem to succeed.

The Open Internet

Instead, of a closed internet — we mostly enjoy an open internet. This is in part due to its origins: the internet was built to be fundamentally open, and this is what has allowed it to grow, change, and be adopted as quickly as it has been. In fact, the trend of an open approach propelling innovation is one that we see repeatedly for emerging technologies.

When it comes to the Internet of Things (IoT), we’re at the precipice of a similar innovation boom as witnessed with the internet.

IoT is slated for explosive growth: by 2021, Gartner expects that 25 billion connected things will be in use, enabling our smart homes, factories, vehicles, and more.

As more and more IoT devices come online, edge computing will become a necessity. Edge computing enables data to be processed and analyzed in real-time for business-critical use cases, such as self-driving cars, safety and security, and industrial automation.

As with the internet, we need an open, consistent infrastructure foundation for IoT and edge computing in order for these technologies to reach their full potential. While the challenges of building an open IoT are different than those we faced with building an open internet, this is an important problem for our industry to solve now, before we witness further fragmentation and vendor lock-in.

Where we are today with IoT

We’re currently in what I like to call the “AOL stage� of IoT—the phase of getting devices connected at scale, and working through the balance of proprietary vs. open approaches.

Back in the 1990s, America Online opened up access to the internet to the masses with an easy-to-use CD; by popping it in, anyone could easily sign up and get connected. However, the tradeoff for this simplicity was getting locked into the AOL ecosystem as the conduit for communication and search.

Over time, users became savvier, realizing they could connect to the internet directly through their ISPs and access more powerful search capabilities (Google, for example). As more people came online through their medium of choice, innovation picked up speed, giving birth to the internet boom and the ecosystem we know today.

IoT is inherently heterogeneous and diverse, made up of a wide variety of technologies and domain-specific use cases.

To date, the market has created a dizzying landscape of proprietary IoT platforms to connect people and operations, each with wildly different methods for data collection, security, and management. It’s like having many different “AOLs� trying to connect devices to the internet—needless to say, this fragmentation has resulted in unnecessary complications.

Companies beginning their IoT journeys are locked in with the vendor they start with, and will be subject to additional costs or integration issues when they look to scale deployments and take on new use cases. Simply put, IoT’s diversity has become a hindrance to its own growth. 

To avoid going down this path, we must build an open ecosystem as our foundation for IoT and edge computing. It’s only when open standards are set that we can scale the commercialization of offerings and services, and focus on realizing ROI.

Open ecosystems facilitate scale

What would an open ecosystem for IoT look like? When creating an ecosystem, there’s a spectrum of approaches you can take, ranging from closed to open philosophies. Closed ecosystems are based on closely governed relationships, proprietary designs, and, in the case of software, proprietary APIs.

The tight control of closed ecosystems sometimes referred to as “walled gardens,� can provide great customer experience, but come with a premium cost and less choice. Apple is a widely cited example of this approach. 

There are open approaches that offer APIs and tools that you can openly program.

The open approach tools enable an ecosystem of products and services where the value is derived from the sum of its parts.

Open-source software like Android is an example; it’s a key driver of a truly open, vendor-neutral ecosystem because of how it empowers developers. Having an open standard like Android’s operating system for developers to build upon not only promotes further innovation but also bolsters a network effect. 

To fully grasp the business trade-offs of closed vs. open ecosystems, let’s compare Android and Apple’s iOS. While Apple provides a curated experience, Android device makers have less control over the overall experience through deep software/hardware integration, and therefore need to find other differentiators.

Nevertheless, openness facilitates choice and scale—Android has over 70 percent of the global mobile OS market share. Even with Android’s openness, providers like Samsung have still been able to carve out market share by investing in innovation and a broader device ecosystem strategy.

An open future for the IoT

The IoT can have as great of an impact as the internet has had, but generating hundreds of closed, siloed ecosystems dictated by vendor choice is not the path to scale. A bright future for IoT is dependent upon our ability to come together as an industry to build an open ecosystem as our foundation.

Across hardware, operating systems, connectivity, applications, and cloud, we must bridge key elements and unify, rather than reinvent, standards in order to empower developers to focus on value creation.

Commercial offerings built on top of that open foundation may very well take a more “closed� approach; however, starting development with an open foundation will always provide the most scalability, flexibility, and transparency to maximize options for the long term.

Open-source collaboration is an excellent accelerator for this open foundation. The Linux Foundation’s LF Edge and Kubernetes IoT Edge Working Group, and the Eclipse Foundation’s IoT and Edge Native Working Groups are just a few of the initiatives exploring architectures and building frameworks to unite industry efforts and enable IoT and edge computing ecosystems to scale.

As they say, the whole can be greater than the sum of its parts, and I look forward to seeing the immense potential of becoming a reality when we have a common foundation to innovate on.

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