I think we can see the beginning of the IT future that Nick Carr was sketching in "The Big Switch". He likened the coming cloud services to the way the electric grid rolled out. Originally, a lot of companies built their own generators, only later hooking up to the grid as it got built out. Eventually, the grid became a utility that everyone (other than very rare niche players with special needs) used.

Go have a look at Amazon's pricing for reserved instances. A small instance will run you a maximum of $1138 over 3 years (plus data transfer costs in and out, which are priced by the GB). Now imagine the company with its own data center, backup generator, air handlers (large electricity bill) - and its nimble competitor that decided to push all of that out to Amazon. The latter company just dropped its overhead costs to the floor, and probably got better reliability with it.

This is going to be huge.

Technorati Tags: cloud