Why Cloud Computing Will Never Be Free

Abstract

The last time the IT industry delivered outsourced shared-resource computing to the enterprise was with timesharing in the 1980s, when it evolved to a high art, delivering the reliability, performance, and service the enterprise demanded. Today, cloud computing is poised to address the needs of the same market, based on a revolution of new technologies, significant unused computing capacity in corporate data centers, and the development of a highly capable Internet data communications infrastructure. The economies of scale of delivering computing from a centralized, shared infrastructure have set the expectation among customers that cloud-computing costs will be significantly lower than those incurred from providing their own computing. Together with the reduced deployment costs of open source software and the perfect competition characteristics of remote computing, these expectations set the stage for fierce pressure on cloud providers to continuously lower prices.