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KOURI: Heads in the cloud

The practice of “cloudbursting” is changing how people view property

Cloudbursting, the ability to rent additional servers in the cloud on demand, has been an extremely successful concept in enterprise computing recently. When a researcher has the need to perform complex computations, rather than investing in a supercomputer, he can rent a cluster of Amazon’s idle servers for just the duration of the calculations. He pays for the power when he needs it, and when he doesn’t he avoids having an expensive asset sitting idle and depreciating.

Expansion into the cloud has been made possible in part by improved networking. Analogous to decreased shipping costs, increased bandwidth reduces the difficulty involved in moving large sets of data from the firm to the cloud. What will enable the Cloudification of things is the decreased friction in loan logistics.

Take Zipcar, for example. Some people do not need a car seven days a week. Rather than having a depreciating asset sitting in a car park, Zipcar users can rent a vehicle for only the time which they need. The proliferation of GPS tracking devices has reduced the risk involved in trusting customers to return a vehicle, which allows the Zipcar business to be viable.

Another example is the fashion site Rent the Runway. Rather than paying for an outfit and wearing it just a few times, customers can rent these items for a special occasion. Thanks to better shipping routes and delivery algorithms, shipping costs have actually decreased while fuel costs increase.

From records to eight tracks, from CDs to iTunes, the music industry has never been complacent with any particular medium. Shifting from iTunes, users have begun favoring “rented” music with services like Spotify, Pandora and iTunes Match.

There are many other examples of users transitioning from ownership to renting, most of which have been enabled by reduced friction in transactional logistics. Going forward, there are many other businesses that have the ability to “cloudify” their business model.

Further, the nature of this model need not be business-to-consumer. Consumer-to-consumer rentals can also lead to a more efficient usage of underutilized assets. Photography equipment, vacation homes, office space, restaurants, energy production equipment and farming equipment are just a few possibilities.

It’s been estimated that Manhattan was sold by Native Americans to explorers for only $24. The reasoning for the low price was that the Native Americans believe that it was impossible to “own” land. It’s easy, then, to see that humanity’s definition of ownership has never been consistent across time and cultures—whether online or on-land.

Andrew Kouri is an Opinion columnist for The Cavalier Daily.

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