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Price Sells Cloud

Stocks in this article: IBMAMZNNFLXRAXGOOG

Not everything in the price list is transparent. What's an extra-large? What's the difference between a high storage, high input-output, and high CPU instance? Who cares? Amazon keeps cutting prices, forcing even Google (GOOG) to respond, InformationWeek reports, and the price war shows no signs of abating.

Sorry but there's no hand-holding, no "customer service" at those prices. But the customers don't care.

There's something else happening as a result of these low prices. The customer mix is changing, from computer people who care about issues including customer service, to marketing people who are building a new ad-supported mobile web with lots of TV on it, CIO Magazine writes.

So what IBM considers a bug is, to the market, a feature. Self-service and open source mean cloud prices are even lower than they might otherwise be, while demand for public cloud is exploding. Who cares if cloud isn't being used for business process management? It's creating new business.

Cloud isn't waiting for computer people to adapt to it. All the talk about "private cloud" -- cloud-based systems hosted at a company premises -- or "hybrid cloud" -- moving seamlessly between these private clouds and public clouds such as Amazon's -- is just so much noise to the people driving the market.

Cloud is like many other computing revolutions I've covered in my career, from the PC itself to the Internet to mobile. The experts aren't driving the train, and it may take them years to catch up with what's happening in the market right now.



At the time of publication the author had positions in IBM and GOOG.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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