Whether you’re on board yet or not, we have officially entered the era of cloud computing. This technology segment is a phenomenon for many reasons, one of which is because much of the uptake is by groups that traditionally didn’t drive adoption or get very involved in infrastructure decisions: Application groups and software developers.
These end-users are adopting cloud at fierce rates – but why? Based on the theory William Stanley Jevons, a Victorian-era economist who contemplated the idea of whether a lower price for a commodity would motivate people to shift spending to other commodities, cloud is opening doors for new users, a recent CIO article pointed out.
“Users who found traditional IT pricing burdensome and cloud computing on-demand pricing congenial have begun finding vast new uses for computing, based on the cloud’s lower costs. Applications that could never have been cost-justified under traditional IT economics suddenly become affordable,” the report said.
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Now that cloud has transitioned from hype to reality, we have entered a second phase of cloud computing known as “The Public Cloud Economics.” The recent announcement of the German Stock Exchange, Deutsche Börse, accelerated the cloud economics to the public level. The organization announced a plan to operationalize by Q1 2014 a public trading platform for infrastructure as service resources, allowing IT resources to be traded like securities and energy, electronically.
“The time when contract negotiations took months will be over for most businesses. Standardizing IaaS offerings will revolutionize the cloud computing market in a similar way to how the GSM standard changed cellular telephony. Cloud services will be provided faster and in more varied ways,” said Ruediger Baumann, CEO of Zimory, the cloud management software provider that will provide the underlying cloud technology for the Deutsche Börse Cloud Exchange.
This move pushes the discussion of cloud economics to the level of public trading of long-term capacity, spot capacity or even futures, noted Forrester Research (News - Alert) analyst Phil LeClare.
“The variety of multiple global cloud providers, local players, and even private cloud capacity, combined with different contract types such as the Amazon on-demand and reserved instance, have all stimulated the economic model of a cloud broker,” he said.
And based on the theory of Jevons, given the lower transaction cost of the new alternative, it’s likely adoption will grow faster than expected as users find new ways to apply the technology.
Edited by Rory J. Thompson