1) Infrastructure Overhead becomes zero
– I need NOT invest in secure powerbackups (like a big battery for electricity power-outs-true in India), data disaster management (read raid), software licensing compliance.
All this is done for me by infrastructure providers like Google and Amazon.
For simple office productivity, I type on Google Docs that auto-saves my data,writing on cloud. I need not backup- Google does it for me. Ditto for presentations and spreadsheets. Amazon gets me the latest Window software installed whenever I logon- I need not be bothered by software contracts (read bug fixes and patches) any more.
2) Renting Hardware by the hour- A small business owner cannot invest too much in computing hardware (or software). The pay as you use makes sense for them. I could never afford a 8 cores desktop with 25 gb RAM- but I sure can rent and use it to bid for heavier data projects that I would have had to let go in the past.
3) Renting software by the hour- You may have bought your last PC for all time
An example- A windows micro instance costs you 3 cents per hour on Amazon. If you take a mathematical look at upgrading your PC to latest Windows, buying more and more upgraded desktops just to keep up, those costs would exceed 3 cents per hour. For Unix, it is 2 cents per hour, and those softwares (like Red Hat Linux and Ubuntu have increasingly been design friendly even for non techie users)
Some other software companies especially in enterprise software plan to and already offer paid machine images that basically adds their software layer on top of the OS and you can rent software for the hour.
It does not make sense for customers to effectively subsidize golf tournaments, rock concerts, conference networks by their own money- as they can rent software by the hour and switch to pay per use.
People especially SME consultants, academics and students and cost conscious customers – in Analytics would love to see a world where they could say run SAS Enterprise Miner for 10 dollars a hour for two hours to build a data mining model on 25 gb RAM, rather than hurt their pockets and profitability in Annual license models. Ditto for SPSS, JMP, KXEN, Revolution R, Oracle Data Mining (already available on Amazon) , SAP (??), WPS ( on cloud ???? ) . It’s the economy, stupid.
Corporates have realized that cutting down on Hardware and software expenses is more preferable to cutting down people. Would you rather fire people in your own team to buy that big HP or Dell or IBM Server (effectively subsidizing jobs in those companies). IF you had to choose between an annual license renewal for your analytics software TO renting software by the hour and using those savings for better benefits for your employees, what makes business sense for you to invest in.
Goodbye annual license fees. Welcome brave new world.