The standard argument for the cloud is that large providers achieve large economies of scale, and thus will be cheaper than a ‘do-it-yourself’ approach to IT,” says Cloudonomics author Joe Weinman. However, he argues, this is neither a necessary nor sufficient condition for cloud computing to be of value to companies. After all, people rent cars all the time, at a unit cost per day much higher than that of owning. Similarly, Weinman argues that the true cost reduction value of cloud infrastructure has nothing to do with lower unit cost, but with a no commit, pay-per-use model. “In effect, it doesn’t matter that much what you pay when you use cloud services, the key cost reduction driver is what you pay when you don’t use them: zero.”
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