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Is Cloud Computing Becoming a Race to the Bottom?

Usually when we mention the phrase race to the bottom, the two things that immediately come to mind are computing and mobile technology. Based on the recent behavior shown by market leader, Amazon, and big time challenger, Microsfot, you can put cloud computing on that list. Microsoft has announced that it is going to go lower than the recent prices slashed by Amazon web services (AWS). Obviously, Microsoft is doing this to remain relevant in the cloud computing game. It is also doing this as a survival tactic. You have to remember that the days of localized software is probably going to end sometime soon. That’s right. The days of going to a store to pick up software and then install in your computer is going to go the way of the dodo bird. In fact, the days of downloading software and installing it to your computer is gonna be gone too. What’s the new model? You just log on to a particular website, access a remotely hosted piece of software, do your thing, produce your output and your done. The great thing about that model is that you don’t pay for a huge piece of software to do just one or two output files. You pay for the service that you use. Moreover, upgrading, maintaining the software is done remotely through the remote server. Finally, there are no security issues because all the security is all handled by the remote server. How awesome is that? Well, it appears that a lot of people are finding this the awesome way to go, and that’s why cloud computing is blowing up. Microsoft wants to be the dominant player in that market because it is not dumb. It is seeing that the old software model is fast disappearing. The biggest growth in cloud computing, not surprisingly, is in the enterprise sector. This is where Microsoft has an iron lock on the competition and it’s not about to let that go. And this move in regard to storage services is just a part of that overall strategy. We suspect that Microsoft will do whatever it takes to become the number one cloud player and this is a brilliant move on its part.

Who’s the real winner here? Once again, it’s the consumer because this is not just about storage, this is not just about software, it’s also about an open source. You will start seeing more and more hyped up, souped up and, otherwise, highly expensive pieces of software going down in price because they’ve gone to the cloud. And that is a great thing.