Friday, April 15, 2016

Cloud Business Follows Office Space Strategy

The NY Times article on cloud computing shares a little secret on how they make money, with micro charges that add up.  "That is one way to think about what is going on at the world’s biggest cloud-computing companies. Instead of grains of sand, think about computing cycles, the activity that goes on in a computer server that is running software. For a price, think about one line of software code for two one-millionths of a penny."  And these micro charges add up to a billion dollar business.  As the article describes, fortunes add up when you keep adding these pennies. 

Perhaps they got the idea from the movie Office Space. In the movie, Peter has a plan to steal half a penny from each transaction.  It quickly pays off as he sees his bounty grow by hundreds of thousands of dollars.  For folks like Amazon, Microsoft and others, those micro payments from cloud computing provide legal riches as well.  It seems that counting pennies does work!