The article is at BusinessWeek by way of the GigaOM Network. I will post more detailed comments on each law at my Cloudonomics blog, based both on some underlying proofs and simulations that I've posted at Complex Models.
My thesis is that large enterprises have many of the same technologies at their disposal as cloud service providers do, so, for example, virtualization, even though widely used by cloud service providers, hardly provides strategic value to an enterprise, since an enterprise can leverage exactly the same technology. Consequently, the advantages of service providers must derive from the fact that they are inherently multi-tenant and multi-enterprise, providing true on-demand infrastructure or services through dynamic allocation and multiplexing; via larger scale; and via strategic, engineered, dispersion.
The 10 Laws of Cloudonomics are:
- Utility services cost less even though they cost more.
- On-demand trumps forecasting.
- The peak of the sum is never greater than the sum of the peaks.
- Aggregate demand is smoother than individual.
- Average unit costs are reduced by distributing fixed costs over more units of output.
- Superiority in numbers is the most important factor in the result of a combat (Clausewitz).
- Space-time is a continuum (Einstein/Minkowski).
- Dispersion is the inverse square of latency.
- Don't put all your eggs in one basket.
- An object at rest tends to stay at rest (Newton).
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