The latest cuts make it clear there’s a new business model driving cloud that is every bit as exponential in growth — with order of magnitude improvements to pricing — as Moore’s Law has been to computing.Both Moore's and Kryder's laws held for multiple decades. Below the fold I ask whether a putative Bezos' law could be equally long-lived?
If you need a refresher, Moore’s Law is “the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years.” I propose my own version, Bezos’s law. Named for Amazon CEO Jeff Bezos, I define it as the observation that, over the history of cloud, a unit of computing power price is reduced by 50 percent approximately every three years.
The article follows Google's announcement:
Google was first to announce “deep” cuts in on-demand instance pricing across the board. To make the point that cloud pricing has been long overdue, Google’s Urs Hölzle showed in March just how much cloud pricing hasn’t followed Moore’s Law: Over the past five years, hardware costs decreased by 20 to 30 percent annually, but public cloud prices fell by just 8 percent annually:Google's graph shows the cost of hardware dropping rapidly over the past 8 years, and much less rapidly over the next 8, until early in the next decade it is essentially flat. This is realistic; while there may still be economies to be wrung out of system architecture, data center design and operations it is clear that the major drivers of cost decreases, Moore's and Kryder's laws, have flattened out. O'Connor makes the casual assumption, belied by the graph he references, that because costs have dropped exponentially in the past they will continue to drop at the same exponential rate in the future.
Patrick Sinz on Dave Farber's IP list provides the appropriately skeptical response:
But nevertheless the numbers in the article tend to demonstrate that the cloud providers margins have a good tendency to grow (per compute unit) and this would tend to make them LESS attractive not more ....
I do agree though that we'll migrate "en masse" to the cloud, but not because it's a "good" solution, but because it's "almost good enough", and that the real advantage of cloud provider is that they provide "prime network real estate". If you want to distribute data and service globally you want to have compute units "close to your users" (in terms of ping latency) that are globally distributed.
But the sad reality for the customers will be that in exchange for a lower initial investment we will end up paying more, and have less choice and no control over our infrastructure.