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How Bezo’s Law Will Drive Migration to the Cloud

Greg O'Connor

Greg O’Connor

Over at GigaOM, by Greg O’Connor from AppZero writes that the future of cloud computing is the availability of more computing power at a much lower cost. Along these lines, he proposes Bezos’s Law.

Named for Amazon CEO Jeff Bezos, I define it as the observation that, over the history of cloud, a unit of computing power price is reduced by 50 percent approximately every three years. I’ll show the math below, but if Bezos’ law reflects reality, the only conclusion is that most enterprises should dump their data centers and move to the public cloud, thus saving money. Some savings occur over time by buying hardware subject to Moore’s Law, plus the fixed cost of maintenance, electrical power, cooling, building and labor to run a data center. In the end, I’ll show how prices are reduced by about 20 percent per year, cutting your bill in half every three years.

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While I’ve always argued that business agility and flexiblity is the reason to move to the Cloud, Bezo’s Law makes migration inevitable for all. Readers, what do you think?

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