This is one war we can all be happy to see start. Microsoft and Amazon have fired some warning shots in the past few months, but yesterday Amazon sent a clear message to Redmond that this is a war and they are ready to fight.
That’s awesome for us the consumers. Regardless of where they finally drive the price, we can have some sense of confidence that the money we pay for cloud computing cycles and storage are now being driven by the forces of a fair market. Adam Smith would be proud today, because the market is at work balancing itself without the intervention of outside forces.
Only time will tell how this plays out, but my guess is that prices for cloud computing will move slightly lower over the course of the next 6 months. At some point it will stabilize around 10 to 20% lower than we see today in certain cases. It is unlikely that we will see prices take on the Moore’s Law effect some have associated with the cloud phenomenon.
The short message is, if you were worried you were going to get price-jacked at the entry ramp to the cloud, you can set that fear aside.
On a closing note I have a prediction that we will see someone attempt to produce a clearing house for cloud purchasing. Hiding the complexity of finding the lowest price, farming simple jobs to cloud based computing for that day, week or month. It will resemble a stock exchange or hedge fund implementation for cloud computing resources. Think of it, a company built around the idea of leveraging future prices based on market events and predictions. Oh yea, they tried that with energy didn’t they, it was called Enron…