Do Economies of Scale Exist in the Cloud
I’m always skeptical about lower prices – there must be a catch – there’s a reduction in capability – there’s an option that I must have that will increase the price above normal, etc. But here we have it – a service we have been selling for quite a while, Microsoft Office 365. We have been very successful, with good demand and good reception from our clients and now I can tell them the price just went down.
I am very confident that the feature/functionality of online services will increase in the future. In the electronics marketplace increased functionality has generally become available at the same price as last year’s model. If we do see lower pricing it is because the functionality and options have been scaled back.
Yesterday I was reading an article about Moore’s Law and it suggested that I was losing this benefit to the provider when moving to a subscription service – well maybe I’m not losing it – maybe I’m still getting the benefit.
Moore’s Law: a rule of thumb in the history of computing hardware whereby the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. — Courtesy Wikipedia
I know our clients did not decide on a subscription based on-line service to get a benefit from Moore’s Law. They did it because it makes good sense for them – it fits their business plan – it is better than the alternative – it is a good deal. Well now it is even a better deal than before and I can’t wait to talk with them about it.
Microsoft Office 365 Subscription Costs Reduced by 20%
Let me know what you think about the price of online services; their current capability; and, Moore’s Law by leaving a comment below.
Joe Treanor | President, RoseBud Technologies