From the Computer Utility to Cloud Computing - To the Cloud: Big Data in a Turbulent World - page 45

capability because they house the storage and processing capabilities.
Cloud services, especially “public” ones, can meter precisely how much
storage and processing are being used at any particular time, albeit with
different providers applying different pricing methods. Pricing is deter-
mined by the cost to receive, process, and respond to a request for storage,
processing, and distribution. Although a wide range of factors is involved,
cloud providers directly control the costs of hardware and software because
they engineer their own systems, and the costs of other factors, such as
facilities, stafing, and electricity, depend on the particular market within
which they operate. Finally, there is no shortage of customers. Indeed
the market most likely will grow to one in which a handful of providers
serve practically everyone, just as, for example, water and energy markets
do. As Clark concludes, “All that's lacking is a regulator. Whether the
cloud computing industry should be regulated is a complex issue that will
undoubtedly become a major debate before too long” (Clark 2012a; M.
O'Connor 2013).
One can debate whether a government regulator will ever become
essential to the cloud computing industry. What cannot be debated is
whether cloud computing will be subject to governance; that is, to the
need for general management, coordination, and oversight. This can be
accomplished by agencies of government, as has been the case historically
for most utilities, or it can be accomplished by those with market power.
These are both governance structures, notwithstanding the mythology
of the market's “invisible hand.” The myth tends to focus on the magic
of invisible coordination more than on the hand, which, in reality, is
quite visible. It is apparent to most observers of cloud computing that,
however they might feel about government regulation, there is a grow-
ing concentration of power among a handful of cloud providers, most of
which are also key players in the production and distribution of software
and content. Utility markets often become government regulated because
one or a few producers, who use their position to exercise signiicant
power over services and pricing, come to dominate. 1 Historically, this has
been the case throughout the history of communication media that was
marked in the United States, for example, by Western Union's control
over telegraphy, AT&T's over telephony, and the broadcasting networks'
domination over radio and then television. In each case regulation was
called on to temper the threats of monopoly or oligopoly control. This