The Virtuous Cycle of Cloud Computing

Grazed from TechNet. Author: Brad Anderson.

In the Day 1 keynote at the recent re:Invent conference, there was an interesting point made about the virtuous cycle that can occur for the cloud vendor and for customers. As I listened to the keynote, I kept thinking: “They are missing the biggest benefit for the entire industry; if the public cloud vendor has the right strategy and is thinking about how to benefit the largest population possible, then they are completely missing how this virtuous cycle can grow to benefit every organization in the world – even if they are not using the public cloud.”

Let me explain a bit more about what I mean. (And, before I get too much farther along, I want to note that this post ties into the cool news yesterday about our work with the Open Compute Project.). The virtuous cycle of a public cloud looks a lot like the image below. As the usage of the public cloud grows, you need more hardware to meet demand – and for sustained growth you will need a lot of hardware…

This need for hardware increases your purchasing power and you can then negotiate lower prices as you purchase in bulk. As your purchasing power grows and your costs drop, you then pass those savings on to your customers by dropping your prices. The lower prices increases demand and the virtuous cycle continues…

Read more from the source @ http://blogs.technet.com/b/in_the_cloud/archive/2014/01/29/the-virtuous-cycle-of-cloud-computing.aspx

Subscribe to the CloudCow bi-monthly newsletter @ http://eepurl.com/smZeb