Cloudonomics: The Business Value of Cloud Computing

by Joe Weinman

reading this book, you probably have already internalized a substantial portion of it. The executive summary has assertions along these lines: 1. Cloud computing is a revolutionary new technology and business model. 2. “Cloud” is interchangeable with “pay per use” or “on demand.” 3. Large cloud providers enjoy massive economies of scale. 4. Economies of scale are the key to cloud benefits. 5. Large economies of scale lead to large price advantages. 6. Scale and innovation enable proprietary technologies and thus sustainable competitive advantage. 7. Further benefits derive from replacing capital expenditures with operating expenses. 8. Because the largest providers drive the largest benefits, only a handful of cloud providers will survive. 9. Rational decision makers will select the lowest-cost option. 10. Therefore, all IT will move to the cloud, in the same way that all electricity has moved to the electric utility “cloud.” 11. Colocation, hosting, managed services, and outsourcing will therefore be completely replaced by the cloud. 12. The cost reduction that the cloud offers will in turn drive lower IT spend. 13. However, security and availability are big issues . . . 14. . . . and so is energy use: Computing uses an increasing, nontrivial portion of the world’s energy.