Wij willen met u aan tafel zitten en in een openhartig gesprek uitvinden welke uitdagingen en vragen er bij u spelen om zo, gezamelijk, tot een beste oplossing te komen. Oftewel, hoe kan de techniek u ondersteunen in plaats van dat u de techniek moet ondersteunen.

An epic number of citizens are video-conferencing to work in these lockdown times. But as they trade in a gas-burning commute for digital connectivity, their personal energy use for each two hours of video is greater than the share of fuel they would have consumed on a four-mile train ride. Add to this, millions of students ‘driving’ to class on the internet instead of walking.

Meanwhile in other corners of the digital universe, scientists furiously deploy algorithms to accelerate research. Yet, the pattern-learning phase for a single artificial intelligence application can consume more compute energy than 10,000 cars do in a day.

This grand ‘experiment’ in shifting societal energy use is visible, at least indirectly, in one high-level fact set. By the first week of April, U.S. gasoline use had collapsed by 30 percent, but overall electric demand was down less than seven percent. That dynamic is in fact indicative of an underlying trend for the future. While transportation fuel use will eventually rebound, real economic growth is tied to our electrically fueled digital future.

The COVID-19 crisis highlights just how much more sophisticated and robust the 2020 internet is from what existed as recently as 2008 when the economy last collapsed, an internet ‘century’ ago. If a national lockdown had occurred back then, most of the tens of millions who now telecommute would have joined the nearly 20 million who got laid off. Nor would it have been nearly as practical for universities and schools to have tens of millions of students learning from home.

Analysts have widely documented massive increases in internet traffic from all manner of stay-at-home activities. Digital traffic measures have spiked for everything from online groceries to video games and movie streaming. So far, the system has ably handled it all, and the cloud has been continuously available, minus the occasional hiccup.

There’s more to the cloud’s role during the COVID-19 crisis than one-click teleconferencing and video chatting. Telemedicine has finally been unleashed. And we’ve seen, for example, apps quickly emerge to help self-evaluate symptoms and AI tools put to work to enhance X-ray diagnoses and to help with contact tracing. The cloud has also allowed researchers to rapidly create “data lakes” of clinical information to fuel the astronomical capacities of today’s supercomputers deployed in pursuit of therapeutics and vaccines. 

The future of AI and the cloud will bring us a lot more of the above, along with practical home diagnostics and useful VR-based telemedicine, not to mention hyper-accelerated clinical trials for new therapies. And this says nothing about what the cloud will yet enable in the 80 percent of the economy that’s not part of healthcare.

For all of the excitement that these new capabilities offer us though, the bedrock behind all of that cloud computing will remain consistent — and consistently increasing — demand for energy. Far from saving energy, our AI-enabled workplace future uses more energy than ever before, a challenge the tech industry rapidly needs to assess and consider in the years ahead.

The new information infrastructure

The cloud is vital infrastructure. That will and should reshape many priorities. Only a couple of months ago, tech titans were elbowing each other aside to issue pledges about reducing energy usage and promoting ‘green’ energy for their operations. Doubtlessly, such issues will remain important. But reliability and resilience — in short, availability — will now move to the top priority.

As Fatih Birol, Executive Director of the International Energy Agency (IEA) last month reminded his constituency, in a diplomatic understatement, about the future of wind and solar: “Today, we’re witnessing a society that has an even greater reliance on digital technology” which “highlights the need for policy makers to carefully assess the potential availability of flexibility resources under extreme conditions.” In the economically stressed times that will follow the COVID-19 crisis, the price society must pay to ensure “availability” will matter far more.

It is still prohibitively expensive to provide high reliability electricity with solar and wind technologies. Those that claim solar/wind are at “grid parity” aren’t looking at reality. The data show that overall costs of grid kilowatt-hours are roughly 200 to 300 percent higher in Europe where the share of power from wind/solar is far greater than in the U.S. It bears noting that big industrial electricity users, including tech companies, generally enjoy deep discounts from the grid average, which leaves consumers burdened with higher costs.

Put in somewhat simplistic terms: this means that consumers are paying more to power their homes so that big tech companies can pay less for power to keep smartphones lit with data. (We will see how tolerant citizens are of this asymmetry in the post-crisis climate.)

Many such realities are, in effect, hidden by the fact that the cloud’s energy dynamic is the inverse of that for personal transportation. For the latter, consumers literally see where 90 percent of energy is spent when filling up their car’s gas tank. When it comes to a “connected” smartphone though, 99 percent of energy dependencies are remote and hidden in the cloud’s sprawling but largely invisible infrastructure. 

For the uninitiated, the voracious digital engines that power the cloud are located in the thousands of out-of-sight, nondescript warehouse-scale data centers where thousands of refrigerator-sized racks of silicon machines power our applications and where the exploding volumes of data are stored. Even many of the digital cognoscenti are surprised to learn that each such rack burns more electricity annually than 50 Teslas. On top of that, these data centers are connected to markets with even more power-burning hardware that propel bytes along roughly one billion miles of information highways comprised of glass cables and through 4 million cell towers forging an even vaster invisible virtual highway system.

Thus the global information infrastructure — counting all its constituent features from networks and data centers to the astonishingly energy-intensive fabrication processes — has grown from a non-existent system several decades ago to one that now uses roughly 2,000 terawatt-hours of electricity a year. That’s over 100 times more electricity than all the world’s five million electric cars use each year.

Put in individual terms: this means the pro rata, average electricity used by each smartphone is greater than the annual energy used by a typical home refrigerator. And all such estimates are based on the state of affairs of a few years ago.

A more digital future will inevitable use more energy

Some analysts now claim that even as digital traffic has soared in recent years, efficiency gains have now muted or even flattened growth in data-centric energy use. Such claims face recent countervailing factual trends. Since 2016, there’s been a dramatic acceleration in data center spending on hardware and buildings along with a huge jump in the power density of that hardware.

Regardless of whether digital energy demand growth may or may not have slowed in recent years, a far faster expansion of the cloud is coming. Whether cloud energy demand grows commensurately will depend in large measure in just how fast data use rises, and in particular what the cloud is used for. Any significant increases in energy demand will make far more difficult the engineering and economic challenges of meeting the cloud’s central operational metric: always available.

More square feet of data centers have been built in the past five years than during the entire prior decade. There is even a new category of “hyperscale” data centers: silicon-filled buildings each of which covers over one million square feet. Think of these in real-estate terms as the equivalent to the dawn of skyscrapers a century ago. But while there are fewer than 50 hyper-tall buildings the size of the Empire State Building in the world today, there are already some 500 hyperscale data centers across the planet. And the latter have a collective energy appetite greater than 6,000 skyscrapers.

We don’t have to guess what’s propelling growth in cloud traffic. The big drivers at the top of the list are AI, more video and especially data-intense virtual reality, as well as the expansion of micro data centers on the “edge” of networks.

Until recently, most news about AI has focused on its potential as a job-killer. The truth is that AI is the latest in a long line of productivity-driving tools that will replicate what productivity growth has always done over the course of history: create net growth in employment and more wealth for more people. We will need a lot more of both for the COVID-19 recovery. But that’s a story for another time. For now, it’s already clear that AI has a role to play in everything from personal health analysis and drug delivery to medical research and job hunting. The odds are that AI will ultimately be seen as a net “good.”

In energy terms though, AI is the most data hungry and power intensive use of silicon yet created — and the world wants to use billions of such AI chips. In general, the compute power devoted to machine learning has been doubling every several months, a kind of hyper version of Moore’s Law. Last year, Facebook, for example, pointed to AI as a key reason for its data center power use doubling annually.

In our near future we should also expect that, after weeks of lockdowns experiencing the deficiencies of video conferencing on small planar screens, consumers are ready for the age of VR-based video. VR entails as much as a 1000x increase in image density and will drive data traffic up roughly 20-fold. Despite fits and starts, the technology is ready, and the coming wave of high-speed 5G networks have the capacity to handle all those extra pixels. It requires repeating though: since all bits are electrons, this means more virtual reality leads to more power demands than are in today’s forecasts.

Add to all this the recent trend of building micro-data centers closer to customers on “the edge.” Light speed is too slow to deliver AI-driven intelligence from remote data centers to real-time applications such as VR for conferences and games, autonomous vehicles, automated manufacturing, or “smart” physical infrastructures, including smart hospitals and diagnostic systems. (The digital and energy intensity of healthcare is itself already high and rising: a square foot of a hospital already uses some five-fold more energy than a square foot in other commercial buildings.)

Edge data centers are now forecast to add 100,000 MW of power demand before a decade is out. For perspective, that’s far more than the power capacity of the entire California electric grid. Again, none of this was on any energy forecaster’s roadmap in recent years.

Will digital energy priorities shift?

Which brings us to a related question: Will cloud companies in the post-coronavirus era continue to focus spending on energy indulgences or on availability? By indulgences, I mean those corporate investments made in wind/solar generation somewhere else (including overseas) other than to directly power one’s own facility. Those remote investments are ‘credited’ to a local facility to claim it is green powered, even though it doesn’t actually power the facility.

Nothing prevents any green-seeking firm from physically disconnecting from the conventional grid and building their own local wind/solar generation – except that to do so and ensure 24/7 availability would result in a roughly 400 percent increase in that facility’s electricity costs.

As it stands today regarding the prospects for purchased indulgences, it’s useful to know that the global information infrastructure already consumes more electricity than is produced by all of the world’s solar and wind farms combined. Thus there isn’t enough wind/solar power on the planet for tech companies — much less anyone else — to buy as ‘credits’ to offset all digital energy use.

The handful of researchers who are studying digital energy trends expect that cloud fuel use could rise at least 300 percent in the coming decade, and that was before our global pandemic. Meanwhile, the International Energy Agency forecasts a ‘mere’ doubling in global renewable electricity over that timeframe. That forecast was also made in the pre-coronavirus economy. The IEA now worries that the recession will drain fiscal enthusiasm for expensive green plans.

Regardless of the issues and debates around the technologies used to make electricity, the priority for operators of the information infrastructure will increasingly, and necessarily, shift to its availability. That’s because the cloud is rapidly becoming even more inextricably linked to our economic health, as well as our mental and physical health.

All this should make us optimistic about what comes on the other side of the recovery from the pandemic and unprecedented shutdown of our economy. Credit Microsoft, in its pre-COVID 19 energy manifesto, for observing that “advances in human prosperity … are inextricably tied to the use of energy.” Our cloud-centric 21st century infrastructure will be no different. And that will turn out to be a good thing.


TechCrunch

Alibaba Cloud announced today that it will invest another RMB 200 billion (or about $ 28 billion) into its infrastructure over the next three years, prompted in part by increased demand for services like video conferencing and live streaming as businesses adapt to the COVID-19 pandemic.

The investment will focus on expanding Alibaba Cloud’s technology, including its operating system, servers and chips, in its data centers. The provider currently has 63 availability zones, located in Asia, Australia, the Middle East, Europe and the United States.

In press statement, Jeff Zhang, president of Alibaba Cloud Intelligence and chief technology officer of Alibaba Group, said, “By increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world.”

In its last quarterly earnings report, issued in February, Alibaba reported cloud revenue grew 62% to $ 1.5 billion. Alibaba Cloud is the top cloud provider in the Asia Pacific market, according to Gartner.


TechCrunch

Mesosphere was born as the commercial face of the open source Mesos project. It was surely a clever solution to make virtual machines run much more efficiently, but times change and companies change. Today the company announced it was changing its name to Day2IQ or D2IQ for short, and fixing its sights on Kubernetes and cloud native, which have grown quickly in the years since Mesos appeared on the scene.

D2IQ CEO Mike Fey says that the name reflects the company’s new approach. Instead of focusing entirely on the Mesos project, it wants to concentrate on helping more mature organizations adopt cloud native technologies.

“We felt like the Mesosphere name was somewhat of constrictive. It made statements about the company that really allocated us to a given technology, instead of to our core mission, which is supporting successful Day Two operations, making cloud native a viable approach not just for the early adopters, but for everybody,” Fey explained.

Fey is careful to point out that the company will continue to support the Mesos-driven DC/OS solution, but the general focus of the company has shifted, and the new name is meant to illustrate that. “The Mesos product line is still doing well, and there are things that it does that nothing else can deliver on yet. So we’re not abandoning that totally, but we do see that Kubernetes is very powerful, and the community behind it is amazing, and we want to be a value added member of that community,” he said.

He adds that this is not about jumping on the cloud native bandwagon all of a sudden. He points out his company has had a Kubernetes product for more than a year running on top of DC/OS, and it has been a contributing member to the cloud native community.

It’s not just about a name change and refocusing the company and the brand, it also involves several new cloud native products that the company has built to serve the type of audience, the more mature organization, that the new name was inspired by.

For starters, it’s introducing its own flavor of Kubernetes called Konvoy, which it says, provides an “enterprise-grade Kubernetes experience.” The company will also provide a support and training layer, which it believes is a key missing piece, and one that is required by larger organizations looking to move to cloud native.

In addition, it is offering a data integration layer, which is designed to help integrate large amounts of data in a cloud-native fashion. To that end, it is introducing a Beta of Kudo, an open source cloud-native tool for building stateful operations in Kubernetes. The company has already donated this tool to the Cloud Native Computing foundation, the open source organization that houses Kubernetes and other cloud native projects.

The company faces stiff competition in this space from some heavy hitters like the newly combined IBM and Red Hat, but it believes by adhering to a strong open source ethos, it can move beyond its Mesos roots to become a player in the cloud native space. Time will tell if it made a good bet.


TechCrunch

Wavecell, a cloud-communications platform for companies in Southeast Asia, announced today that it has been acquired by 8×8 in a deal worth about $ 125 million. The acquisition will help San Jose, California-based 8×8 expand in Asia, where Wavecell already has offices in Singapore, Indonesia, the Philippines, Thailand and Hong Kong.

Wavecell’s cloud API platform, which includes SMS, chat, video and voice messaging, is used by companies such as Paidy, Lalamove and Tokopedia. It has relationships with 192 network operators and partners like WhatsApp and claims its infrastructure is used to share more than two billion messages each year.

The terms of the deal includes $ 69 million in cash and about $ 56 million in 8×8 common shares. Founded in 2010, Wavecell’s investors included Qualgro VC, Wavemaker Partners and MDI Ventures.

In a prepared statement, 8×8 CEO Vik Verma said “8×8 is now the only cloud provider that owns the full, global-scale, cloud-native, technology stack offering voice, video, messaging, and contact center delivered both as pre-packaged applications and as enterprise-class APIs. We’re excited to welcome the Wavecell employees to the 8×8 family. We now have a significant market presence in Asia and expect to continue to expand in the region and globally in order to meet evolving customer requirements.”


TechCrunch

While AWS leads the cloud infrastructure market by wide margin, Microsoft isn’t doing too badly, ensconced firmly in second place, the only other company with double-digit share. Today, it announced a big deal with AT&T that encompasses both Azure cloud infrastructure services and Office 365.

A person with knowledge of the contract pegged the combined deal at a tidy $ 2 billion, a nice feather in Microsoft’s cloud cap. According to a Microsoft blog post announcing the deal, AT&T has a goal to move most of its non-networking workloads to the public cloud by 2024, and Microsoft just got itself a big slice of that pie, surely one that rivals AWS, Google and IBM (which closed the $ 34 billion Red Hat deal last week) would dearly have loved to get.

As you would expect, Microsoft CEO Satya Nadella spoke of the deal in lofty terms around transformation and innovation. “Together, we will apply the power of Azure and Microsoft 365 to transform the way AT&T’s workforce collaborates and to shape the future of media and communications for people everywhere,” he said in a statement in the blog post announcement.

To that end, they are looking to collaborate on emerging technologies like 5G and believe that by combining Azure with AT&T’s 5G network, the two companies can help customers create new kinds of applications and solutions. As an example cited in the blog post, they could see using the speed of the 5G network combined with Azure AI-powered live voice translation to help first responders communicate with someone who speaks a different language instantaneously.

It’s worth noting that while this deal to bring Office 365 to AT&T’s 250,000 employees is a nice win, that part of the deal falls on the under the SaaS umbrella, so it won’t help with Microsoft’s cloud infrastructure marketshare. Still, any way you slice it, this is a big deal.


TechCrunch

Cloud gaming — however a company chooses to define that — is shaping up to be a big part of the next generation of consoles and other platforms. But Mario creator and Nintendo veteran Shigeru Miyamoto says his company won’t be so quick to jump on the bandwagon.

Speaking to shareholders at Nintendo’s annual general meeting, Miyamoto and other executives addressed a variety of issues, among them what some interpret as a failure to keep up with the state of the industry. Sony and Microsoft (together, amazingly) are about to lock horns with Google, Nvidia, and others in the arena of game streaming, but Nintendo has announced no plans whatsoever regarding the powerful new technology.

As reported by GamesIndustry.biz, Miyamoto was unfazed by this allegation.

“We believe it is important to continue to use these diverse technical environments to make unique entertainment that could only have been made by Nintendo,” he said. “We have not fallen behind with either VR or network services… Because we don’t publicize this until we release a product, it may look like we’re falling behind.”

But although this hinted that Nintendo is working in this direction, Miyamoto didn’t sound convinced that cloud gaming was a home run.

“I think that cloud gaming will become more widespread in the future, but I have no doubt that there will continue to be games that are fun because they are running locally and not on the cloud,” he said.

The Nintendo focus on local multiplayer and complete offline single-player games is certainly emblematic of this point of view. And while Nintendo has been slow to adopt the latest gaming trends, it has shown that it can pull them off very well, indeed like no other, for example with the excellent Splatoon 2 and its constantly evolving seasons and events.

Nintendo President Shuntaro Furukawa said they see how gaming technology is evolving and that it’s important to “keep up with such changes,” but like Miyamoto made no indication that there was anything concrete on the way.

Instead, he indicated (again in true Nintendo style) that the company would reap the benefits of cloud gaming whether or not it took part in the practice.

“if these changes increase the worldwide gaming population, that will just give us more opportunities with our integrated hardware and software development approach to reach people worldwide with the unique entertainment that Nintendo can provide,” he said.

In other words, a rising tide lifts all boats, and if the others did the work to raise the water level, well, that’s their business.

The rumor on everyone’s mind after E3 is whether a new Switch or Switches are on the way. Naturally Furukawa demurred, saying that of course they were aware of speculation, but wouldn’t comment. However, he added: “It would spoil the surprise for consumers and is against the interests of our shareholders, so we are withholding any discussion.”

Of course a new Switch is on the way — that’s about as much as a confirmation anyone would be able to get from Furukawa or the other highly trained executives at Nintendo, even if the new hardware was coming out tomorrow. But at this rate it seems more likely that the new hardware will be timed to pull in buyers around the holidays — which may have the knock-on effect of taking the wind out of Microsoft and Sony’s sails (and sales) when they debut their next-generation consoles next year.


TechCrunch

Independent restaurant owners may be doomed, and perhaps grocery stores, too.

Such is the conclusion of a growing chorus of observers who’ve been closely watching a new and powerful trend gain strength: that of cloud kitchens, or fully equipped shared spaces for restaurant owners, most of them quick-serve operations.

While viewed peripherally as an interesting and, for some companies, lucrative development, the movement may well transform our lives in ways that enrich a small set of companies while zapping jobs and otherwise taking a toll on our neighborhoods. Renowned VC Michael Moritz of Sequoia Capital seemed to warn about this very thing in a Financial Times column that appeared last month, titled “The cloud kitchen brews a storm for local restaurants.”

Moritz begins by pointing to the runaway success of Deliveroo, the London-based delivery service that relies on low-paid, self-employed delivery riders who deliver local restaurant food to customers — including from shared kitchens that Deliveroo itself operates, including in London and Paris.

He believes that Amazon’s recent investment in the company “might just foreshadow the day when the company, once just known as the world’s largest bookseller, also becomes the world’s largest restaurant company.”

That’s bad news for people who run restaurants, he adds, writing, “For now the investment looks like a simple endorsement of Deliveroo. But proprietors of small, independent restaurants should tighten their apron strings. Amazon is now one step away from becoming a multi-brand restaurant company — and that could mean doomsday for many dining haunts.”

The good news . . . and the bad

He’s not exaggerating. While shared kitchens have so far been optimistically received as a potential pathway for food entrepreneurs to launch and grow their businesses — particularly as more people turn to take out —  there are many downsides  that may well outweigh the good, or certainly counteract it.

Last year, for example, UBS wrote a note to its clients titled “Is the kitchen dead?” wherein it suggested the rise of food delivery apps like Deliveroo and Uber Eats could well prove ruinous for home cooks, as well as restaurants and supermarkets.

The economics of food delivery have grown too alluring, suggested the bank. It’s already inexpensive because of cheap labor — and that cost center will disappear entirely if delivery drones take flight. Meanwhile, food will become cheaper to make because of central kitchens, the kind that Deliveroo is opening and Uber is reportedly venturing into. (In March, Bloomberg reported that Uber is testing out a program in Paris where it’s renting out fully equipped, commercial-grade kitchens to serve businesses that sell food on delivery apps like Uber Eats.)

The favorable case for cloud kitchens argues that restaurants renting from them pay less than they would for their own real estate. But the reality is also that most of the businesses moving into them right now aren’t small restaurateurs but fast-food brands that already have a following and aren’t known for their emphasis on food quality but instead for quickly churning out affordable food.

As Eric Greenspan, a chef who has appeared regularly on the Food Network and opened and closed numerous restaurants, says in a short new documentary about cloud kitchens: “Delivery is the fastest growing market in restaurants. What started out as 10 percent of your sales is now 30 percent of your sales, and [the industry predicts] it will be 50 to 60 percent of a quick-serve restaurant’s sales within the next three to five years. So you take that, plus the fact that quick-serve brands are kind of the key to getting a fat payout at the end of the day . . .”

Greenspan continues on to explain that during an age when fewer people frequent restaurants, running one simply makes less and less sense. “[Opening] up a brick-and-mortar restaurant these days is just like giving yourself a job. Now [with centralized kitchens], as long as the product is coming out strong, I don’t need to be there as a presence. I can quality control remotely now. I can go online and [log out of a marketplace Uber Eats or Postmates] and not piss off any customers, because if I just decided to close the restaurant one day, and you drove over and it was closed, you’d be pissed. But if you’re looking for [one of my restaurants] in Uber Eats and you can’t find it because I turned it off, well, you’re not pissed. You just order something else.”

Big players only need apply . . .

The model works for now for Greenspan, who is operating out a cloud kitchen in L.A that happens to belong in part to Uber cofounder Travis Kalanick. He was quicker than some to grok the opportunity that shared kitchens present. In fact, it was early last year that Kalanick announced he was investing $ 150 million in a startup called City Storage Systems that focused on repurposing distressed real estate assets and turning them into spaces for new industries, like food delivery.

That company owns CloudKitchens, which invites food chains — as well as independent restaurant and food truck owners — to lease space in one of its facilities for a monthly fee, charging additional fees for data analytics that it says are meant to help the entrepreneurs boost their sales.

The pitch to restaurateurs is that CloudKitchens can increase their sales while reducing their overhead. But the company is also amassing all kinds of data about its tenants and their customer preferences in the process — data that could presumably benefit CloudKitchens in various ways. Little wonder that Amazon wanted entrée into the industry, or that there is already at least one serious competitor in China — Panda Selected — which raised $ 50 million led by Tiger Global Management earlier this year.

No one can fault savvy entrepreneurs for seizing on what looks like a gigantic business opportunity. Still, the kitchens, which make all the sense in the world from an investment standpoint, should not be embraced so readily by everyone else as a panacea.

Ripple effects . . .

One of the biggest areas of concern is that in order to work, central kitchens rely on the same people who drive Ubers and handle food deliveries — people who aren’t afforded health benefits and whose financial picture is precarious as a result. (As with Uber drivers, Deliveroo employees tried to gain status as “workers” last year with better pay, but they were denied them. The EU Parliament more recently passed new rules to protect so-called gig economy workers, though they don’t go far. Meanwhile, in the U.S, Uber and Lyft continue to fight legislation that would give employee status to contract workers.)

Matt Newberg, a founder and foodie from New York, says he could see the writing on the wall when he recently toured CloudKitchen’s two L.A. facilities along with the shared kitchens of two other companies: Kitchen United which last fall raised $ 10 million from GV, and and Fulton Kitchens, which offers commercial kitchens for rent on an annual basis.

Newberg filmed what he saw (which you can watch below) and suggests that he was taken aback by the conditions of the first facility that CloudKitchens opened and operates in South L.A.

Though most restaurant kitchens are chaotic scenes, Newberg said that as “someone who loves food and sustainability” the facility didn’t feel “very humane” to him when he walked through it. It’s windowless for one thing (it’s a warehouse). Newberg also says it was filled with people who appeared to him to be low-wage workers. Not last, he says he also counted 27 kitchens packed into what are “maybe 250-square-feet to 300 square-foot spaces,” and a lot of people who appeared to be in panic mode.

“Imagine lots of screaming, lots of sirens triggered when an order gets backed up, tablets everywhere.”

Adds Newberg, “When i walked in, I was like, holy shit, no one even knows this exists in L.A. It felt like Ground Zero. It felt like a military base. I mean, it seemed genius, but also crazy.”

Newberg says CloudKitchen’s second, newer location is far nicer, as are the facilities of Kitchen United and Fulton Kitchens. “That [second CloudKitchen warehouse] felt like a WeWork for kitchens. Super sleek. It was as quiet as a server farm. There were still no windows, but the kitchens are nicer and bigger.”

Growing pains . . .

Emails to CloudKitchens went unreturned, but every startup has growing pains, and presumably, shared kitchen companies are not immune to these. Still, Moritz, the venture capitalist, warns that most restaurateurs should remain wary of them. Writing in the FT, he says that in the early 2000s, his firm, Sequoia, invested in a chain of kebab restaurants called Faasos that planned to deliver meals to customers’ homes but wound up getting crushed by high rents and turnover, among other things.

To save itself, it opened a centralized kitchen to sell kebobs. Now, he writes, Fassos produces a wide variety of foods, including other Indian specialities but also Chinese and Italian dishes under separate brand names.

It’s the same playbook that Eric Greenspan is using, telling Food & Wine magazine last year that his goal was to have no fewer than six delivery-only concepts running simultaneously. Greenberg, who is obviously media savvy, can probably pull it off, too, just like Fassos. But for restaurants that are not known franchises or have the star appeal of celebrity chef, the future might not look so bright.

Writes Moritz: “In some markets there is still an opportunity for hardened restaurant and kitchen operators — particularly if they are gifted in the use of social media, to build a following and refashion themselves. But they need to move quickly before it becomes too expensive to compete with the larger, faster-moving companies. The mere prospect of Amazon using cloud kitchens to provide cuisine catering to every taste — and delivering these meals through services such as Deliveroo — should be enough to give any restaurateur heartburn.”

It should also worry people who care about their neighborhoods.

Cloud kitchens may make it faster and cheaper than ever to order take-out. But there will be consequences. Most of us simply have yet to imagine them.


TechCrunch

Created by R the Company. Powered by SiteMuze.