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The new economics also made it more feasible to give away a service because advert-
isingrevenuewassufficienttomakethebusinessviable.Manysiteswerefreeformostfea-
tures but offered “premium” services at an additional cost. This “freemium” (free + premi-
um) business model was a great way to attract large numbers of customers. Being free
meant there was very little barrier to entry. Once the user was accustomed to using the ser-
vice,sellingthepremiumfeatureswaseasier.Ifadvertisingrevenuewassufficient,thefree
users were no burden.
Software, hardware, and power costs were all significantly lower with this new ap-
proach, enabling the emergence of new business models. Could the price drop to the point
that computing becomes cost free? The answer will surprise you.
B.5 The Cloud Computing Era (2010-present)
The trend so far as been that each era has computing capacity that is more economical than
the previous era. Increases in capacity and reliability went from having super-linear cost
growth to linear and sub-linear cost growth. Can it get any better? Could it become free?
Many landlords live “rent free” bysimply having enough profitable tenants to cover the
cost of the apartment they live in. This is the economic thinking that enables cloud com-
puting: build more computing resources than you need and rent the surplus.
Availability Requirements
Aroundthistime,mobilecomputingbecamemoreaffordableand,inturn,moreaccessible.
Cell phones became smartphones running operating systems as sophisticated as those
found on PCs. Mobile applications created demand for even better latency and reliability.
Mobile applications create demand for lower-latency services—that is, services that re-
spond faster. A mobile map application would not be useful if it took an hour to calculate
the best driving route to a location. It has to be fast enough to be usable in a real-world
context, responding in a second or two. If such calculations can be done hundreds of times
asecond,itopensthedoortonewapplications:theabilitytodragpointsinthemapandsee
the route recalculated in real time. Now instead of one request, dozens are sent. Because
the application is so much more usable this way, the number of users increases. Thus ca-
pacitydemandsincrease bymultiple ordersofmagnitude, whichrequiresquantumleapsin
support infrastructure.
Mobileapplicationsdemandnewlevelsofreliability.Amapapplicationisnotveryuse-
ful if the map service it relies on is down when you need it. Yes, map tiles can be cached
but real-time traffic reports less so. As mobile apps become more and more life-critical,
thereliability oftheir supportingservices becomes moreimportant. Asreliability improve-
ments leap forward, more life-critical applications become possible.
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