What Will The Race To Zero Do To The Cloud?

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Race To Zero CloudOnly a decade ago, the cloud was a nascent technology in which no one really put a great deal of stock. A lot can change in ten years, no? These days, everyone’s racing to get involved with the cloud, whether for its incredible scalability, its unbeatable flexibility, or its cost-effectiveness.

Unfortunately, this newfound popularity has had an unexpected side effect – the market is now crawling with cloud vendors. It’s inundated almost to the point of bursting (no pun intended). And that means competition has never been higher for clients.

This in turn has led to another trend, known colloquially as The Race To Zero. It’s essentially what it sounds like; a brutal price war between cloud vendors, particularly those in the storage sector. Cloud service providers, desperate to outdo one another, are slashing prices and increasing storage limits on a regular basis – great news for clients, not so much for vendors.

This isn’t just a war between the little guys, either – it goes all the way to the top.

“While prices for just about everything else are going up, cloud storage prices are nosediving,” writes Rick Delgado of Cloud Computing News. “The competition between leaders such as Google, Amazon, and Box is driving prices down and providers across the industry are being pressured into joining the race to zero.”

“The race has been accelerating,” Delgado continues. “And many experts are not shy to admit that storage will soon be free.”

Want an idea of just how much storage costs have gone down in recent years? Consider that a one gigabyte hard drive in 1993 cost almost $9,000. Today, a gigabyte costs four cents.  

While the race to zero might have cloud vendors and tech companies sweating, it’s actually a pretty fantastic trend for cloud hosting clients. The reason for that can be summed up in one word: innovation. Eventually, vendors won’t be able to lower prices any further – at that point, they will need to figure out other ways to differentiate themselves from the competition.

It’s impossible to say what they’ll come up with, but whatever it is, it will almost certainly benefit clients.

Not only that, the plummeting cost of the cloud means the barrier to entry for startups and small businesses is lower than ever – and will continue to sink as the price war comes to its natural conclusion. The playing field for small organizations will be more level than ever; freed of the costs associated with maintaining a computing infrastructure, entrepreneurs will be able to invent, create, and develop as they see fit.

I don’t believe I need to explain why that’s an exciting prospect.

The Race to Zero will have a few negative consequences, of course – though they’re the same consequences that come hand-in-hand with any market shift. Many cloud vendors will find it difficult to balance the costs associated with maintaining infrastructure in the face of plummeting prices. Others will be incapable of innovation to the degree necessary to keep up with their rivals.

There will be casualties, in other words. Vendors will go out of business. But ultimately, the Race to Zero is a net positive for cloud computing and for enterprise as a whole – and when the race finally ends, everyone will be a winner.  

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