Looking at cloud computing from an economic point of view

Soon after the discovery of gold in the American Nevada Mountains in 1848, many gold diggers poured into California State, triggering a vigorous gold rush. But who knows that the fortune in this gold rush is not the man who digs the gold, but the man who sells the water at the mine.

But when there are more water people, who else can send money?

Cloud computing platforms are equivalent to gold mines, and a variety of application providers based on cloud platforms are the ones who buy water from the mines. In this way, the combination of infrastructure and value-added services, the enterprise is no longer a separate individual, but a commercial ecological community.

Let's take a look at four forms of cloud computing, private cloud, public cloud, mixed cloud, and community cloud.

Private cloud is a computing resource platform built in-house, IBM owns and uses many private cloud platforms inside the enterprise, such as developing Test cloud IBM Ring Cloud. Developers do not see the physical machine, everyone uses the virtual machine every day, what kind of environment they want to assign to him. Recently, I am doing a project of large-scale data analysis, which needs to analyze the data of P unit and use thousands of virtual machine resources.

The public cloud is a computing platform built on public networks, such as the cloud services provided by websites such as Amazon. Community Cloud is a variant of the public cloud and private cloud, in fact, several enterprises share a cloud computing platform, between the public cloud and private cloud, the main feature is the separation of right to use and ownership. Hybrid cloud is a combination of private cloud and public cloud computing resources, such as many banks and insurance companies in the end of the month when the report requires a lot of computing resources, if the peak configuration of hardware equipment is wasteful, 80% of the time 80% of the machine is idle. You can connect the machines within the enterprise to cloud service providers such as Amazon and, when needed, hire machines through cloud computing services.

According to the economics concept, cloud computing makes the right to use and ownership of IT infrastructure separate from the delivery channel level. At the delivery service level, the process of cloud computing being used and abandoning the infrastructure is done in a service manner. At the level of delivery mode, the private ownership and ownership of private cloud are combined; the use and ownership of the public cloud are separate, and the owners allow open crowds, open businesses to access, community cloud users are restricted target groups, and mixed clouds combine public and private clouds.

Even more than basic infrastructure, cloud computing can provide application services. In other words, not only can help the customer to do the system well, the platform is built, provides the tool to the customer, enables the customer to use this platform to carry on the work deployment. Further, cloud computing service providers can also build applications and provide application services to customers on the platform.

This is an extremely important economic thing for end users, and that is the new service delivery model that cloud computing brings.

The infrastructure is so flexible because it is a form. Take Taobao shopping, in fact, customers are using a customer service. Users just use the browser to search, order, select logistics methods, payment, this series of actions by the Taobao back-Office system to support. From this perspective, Starbucks offers coffee services, and restaurants offer dining services.

Cloud computing through the new form of it resource usage patterns, so that the same physical resources can do more things, cost less, more efficient, and have a more convenient customer experience, but these are only very basic level of price value.

The greater value of cloud computing lies in leveraging the business innovation opportunities created by this new IT form. Cloud computing has revolutionized traditional business models and business models because of its own economic model.

First, cloud computing has a scale effect, and Google has millions of servers. But Google's fixed assets are not just these servers, but the network effects. The more people on the phone, the greater the network value of the telephone. This also applies to the cloud services provided on the Internet, the more people use, the greater the value. Google's search results are actually being revised every day based on the search results of each searcher, and if Google offers a high rate of search results, it's because every user is contributing to that.

And Amazon's cloud services, because the number of consumers buying books is huge, so Amazon can provide a very strong recommendation list, which is based on the reader's purchase data. This is the traditional cross-selling, Amazon's sales of more than half of the books sold in this way, this is Amazon's unique, not copied business secrets.

This is the network effect, all cloud services in fact more or less have this feature. What is the net effect plus the results of global access? From the point of view of economics, the marginal cost is decreasing, and the efficiency is increasing, and the marginal cost tends to be zero.

Cloud computing also brings personalized value, almost all cloud services provide search, and recommendation is another search. Web site can be based on the user's current search action, by the system automatically recommend which consumers may be interested in, thus forming the recommended list. This is also true of social networks, where the preference of experts and celebrities in certain areas can become a new trend and a new fad in this field. Mobile interconnection has brought unknown attributes, further let our preferences have a spatial segmentation, through these can fully put the consumer's personality and preferences are caught. And these will have the greatest commercial value, because the Internet to provide users with personalized services, which is the user's most wanted, this with the industrial economy large-scale sales are not the same.

Cloud computing also brings a long tail effect, and a lot of personalized requirements add up to great value. Consumers may well not know that the obscure books on Amazon's web site add up to more than 70% of total sales, while the best-selling book accounts for only 30%. So the value of cloud services is to create a "blue sea." In terms of economics, cloud services have more than a few orders of magnitude of competitive power.

Cloud computing production can also be crowdsourcing, which is also the characteristics of all Internet services. Let's look at Apple, which relies on crowdsourcing to develop software on both the iphone and the ipad, and does not need to consume Apple's resources, and every software developed on this platform will pay Apple 30% of its profit if it is profitable.

Network effect, personalized service, long tail effect, blue ocean and crowdsourcing, cloud computing brings not only the change of IT infrastructure use, but also the reshaping of economic concept, and the change of business model to accelerate the service economy era.

(Responsible editor: Lu Guang)