4 ms·

Obviously I have zero information about how they came to that conclusion, but it sounds to me like they looked too far into the future. With basically every ma

Obviously I have zero information about how they came to that conclusion, but it sounds to me like they looked too far into the future. With basically every major tech company (Amazon, Google, Microsoft, IBM) now having some cloud offering and so many companies switching their on-site infrastructure for the cloud, it seems like it's only a matter of time until compute time becomes a commodity. Once that happens pricing becomes a race to the bottom and margins become much smaller.

amerine 7y ago
Why does this argument get made so much? Why is it assumed that the market will behave this way?
- dijit 7y ago
  Because we have 100 years of free market capitalist based economic history that it would be unwise to ignore?
  - wmf 7y ago
    Enterprise computing was already pretty mature in the pre-cloud era yet prices were (and still are) very high. So when exactly does this commoditization kick in? 50 years? 100?
    - dijit 7y ago
      Enterprise computing? In what sense? Colocated hosting is indeed a race to the bottom, as are renting of bare metal servers and VPS’s
- reggieband 7y ago
  Probably because "product life-cycle" is MBA 101. Not sure if this is the original from HBR but it is from 1965: https://hbr.org/1965/11/exploit-the-product-life-cycle https://hbr.org/1965/11/exploit-the-product-life-cycle From "Maturity Stage": > The market maturity stage typically calls for a new kind of emphasis on competing more effectively. The originator is increasingly forced to appeal to the consumer on the basis of price, marginal product differences, or both.
zjaffee 7y ago
Compute being a commodity doesn't matter when storage has significant lock in, with cheaper prices for using the localized storage service of a particular cloud provider. Even if moving a containerized application across cloud services was as simple as clicking a few buttons, if you're doing any sort of logging, and especially later any computation over those logs, you will be locked in one way or another.
paulddraper 7y ago
> compute time becomes a commodity The cloud is enormously expensive if people are buying it for "compute time". But that's the miscalculation: thinking people buy cloud for "compute time". By and large they do not. They buy cloud for flexible provision, robust management, easier deployment, and better monitoring. And those are differentiated qualities.
- milesward 7y ago
  I see a very different list of core benefits: more of ops, compliance, procurement is someone else's problem; capital conservation; and it's what the kids use to go fast, familiarity.

amerine 7y ago

Why does this argument get made so much? Why is it assumed that the market will behave this way?

dijit 7y ago
Because we have 100 years of free market capitalist based economic history that it would be unwise to ignore?
- wmf 7y ago
  Enterprise computing was already pretty mature in the pre-cloud era yet prices were (and still are) very high. So when exactly does this commoditization kick in? 50 years? 100?
  - dijit 7y ago
    Enterprise computing? In what sense? Colocated hosting is indeed a race to the bottom, as are renting of bare metal servers and VPS’s
reggieband 7y ago
Probably because "product life-cycle" is MBA 101. Not sure if this is the original from HBR but it is from 1965: https://hbr.org/1965/11/exploit-the-product-life-cycle https://hbr.org/1965/11/exploit-the-product-life-cycle From "Maturity Stage": > The market maturity stage typically calls for a new kind of emphasis on competing more effectively. The originator is increasingly forced to appeal to the consumer on the basis of price, marginal product differences, or both.

zjaffee 7y ago

Compute being a commodity doesn't matter when storage has significant lock in, with cheaper prices for using the localized storage service of a particular cloud provider. Even if moving a containerized application across cloud services was as simple as clicking a few buttons, if you're doing any sort of logging, and especially later any computation over those logs, you will be locked in one way or another.

paulddraper 7y ago

> compute time becomes a commodity The cloud is enormously expensive if people are buying it for "compute time". But that's the miscalculation: thinking people buy cloud for "compute time". By and large they do not. They buy cloud for flexible provision, robust management, easier deployment, and better monitoring. And those are differentiated qualities.

milesward 7y ago
I see a very different list of core benefits: more of ops, compliance, procurement is someone else's problem; capital conservation; and it's what the kids use to go fast, familiarity.