Cloud Computing: Moore’s law gives way to Bezos’s law

Grazed from GigaOM.  Author: Greg O’Connor.

Cloud providers Google, AmazonWeb Services (AWS) and Microsoft are doing some spring-cleaning, and it’s out with the old, in with the new when it comes to pricing services. The latest cuts make it clear there’s a new business model driving cloud that is every bit as exponential in growth — with order of magnitude improvements to pricing — as Moore’s Law has been to computing.

If you need a refresher, Moore’s Law is “the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years.” I propose my own version, Bezos’s law. Named for Amazon CEO Jeff Bezos, I define it as the observation that, over the history of cloud, a unit of computing power price is reduced by 50 percent approximately every three years…


I’ll show the math below, but if Bezos’ law reflects reality, the only conclusion is that most enterprises should dump their data centers and move to the public cloud, thus saving money. Some savings occur over time by buying hardware subject to Moore’s Law, plus the fixed cost of maintenance, electrical power, cooling, building and labor to run a data center. In the end, I’ll show how prices are reduced by about 20 percent per year, cutting your bill in half every three years…

Read more from the source @ https://gigaom.com/2014/04/19/moores-law-gives-way-to-bezoss-law/