The Freemium model comes to Amazon EC2

Amazon will offer free cloud services developers starting this November.

Jarrod Phipps, a student in this course, has wrote a blog post giving his thoughts on Amazon's new pricing model. He asserts:

"The main reason I believe Amazon would go this route is that cloud services are moving closer towards commodity as the cloud vendor marketplace continues to crowd. This pricing model is likely an attempt to grab customers early and hope that high intra-vendor switching costs cause them to remain loyal to EC2. We know computing cycles, bandwidth, and storage are only getting cheaper, is this the first step towards a perpetually free cloud-hosting environment for web applications?"

What are your thoughts on Amazon's new pricing?

Microsoft moves deeper into the clouds with Office 365

Microsoft just announced its answer to Google Apps, Microsoft Office 365.

Microsoft Office 365, the company’s next generation in cloud productivity that brings together Microsoft Office, SharePoint Online, Exchange Online and Lync Online in an always-up-to-date cloud service.

Google has gained a lot of traction with small businesses and educational institutions with Google Apps. But it appears that Microsoft's packaging and pricing was designed to directly challenge Google's assault on this market.

Pricing Scenarios

Microsoft Office 365 (e-mail only) $24 / user account / year

Microsoft Office 365 Small Business $72 / user account / year

Microsoft Office 365 Enterprise $288 / user account / year

Google Apps Standard Free ( 50 user limit)

Google Apps Premier $50 / user account / year

How should Google respond to the introduction of this new suite?

Larry Ellison's view of "Cloud Computing"

A Plan for Long Term Growth

A proper US investment recovery plan has five parts.

The first is a significant boost in investments in clean energy and an upgraded national power grid. ...

The second is a decade-long programme of infrastructure renovation, with projects such as high-speed inter-city rail, water and waste treatment facilities and highway upgrading...

The third component is more education spending at secondary, vocation and bachelor-degree levels, to recognise the reality that tens of millions of American workers lack the advanced skills needed to achieve full employment at the salaries that the workers expect. The unemployment crisis is largely a structural crisis of job skills. It is hitting young workers – many of whom should still be learning – and older workers who lack a degree....

That's from the five part economic recovery plan of Jeffrey Sachs which is squarely focused on long term growth, even as it helps us out of our current slump. Click on the link to learn parts four and five.

Mathematical Proof of the Inevitability of Cloud Computing

(Posted by Mona Masghati)

In the emerging business model and technology known as cloud computing, there has been discussion regarding whether a private solution, a cloud-based utility service, or a mix of the two is optimal. My analysis examines the conditions under which dedicated capacity, on-demand capacity, or a hybrid of the two are lowest cost. The analysis applies not just to cloud computing, but also to similar decisions, e.g.: buy a house or rent it; rent a house or stay in a hotel; buy a car or rent it; rent a car or take a taxi; and so forth.

Follow this link to continue: http://cloudonomics.wordpress.com/

Clash of the Clouds

(Posted by Mads Srinivasan)

http://www.economist.com/opinion/displaystory.cfm?story_id=14637206

It may be a good exercise to discuss this statement in the class: "the economics of the cloud may be different from those of the PC. Network effects are unlikely to be as strong. Much of the cloud is based on open standards, which should make it easier to switch providers"

If the economics of clouds is based on open standards, how can company extract value from their cloud offerings? Looks like there is no "winner take all" in the cloud. Is the pie big enough for multiple players? Do some companies have inherent competitive advantage over others?