[daxfohl]

One could argue the cloud services companies aren't really pure software as alluded to in the article, but a software veneer over a gig economy for the underlying hardware. This perspective would allow for a bit deeper of a comparison between what's working and what's not.

[wbronitsky]

I don’t understand this argument at all; it seems to be only buzzwords.

What is the relation of the gig economy to a cloud hosting service, other than most gig economy apps are built on cloud servers? Also, how does looking at the problem this way enlighten us?

[rossdavidh]

I think the idea is that a cloud company is primarily renting hardware. Therefore, it doesn't scale like a software company; as its number of customers goes up, its number of employees and amount of capital equipment has to go up as well. This would mean it should not have a multiple like a pure-play software company, where the costs go up little if any as the number of customers goes up, because almost all of the software's development costs are up front.

[wbronitsky]

I assume you mean that these companies are in the business of renting hardware, not that they themselves rent the hardware they are using.

I believe the virtualization they are offering allows the service to scale a bit more like software, but I do agree that these cloud providers don’t have 0 marginal cost.

Either way, thank you for de-buzzwording the original argument. It makes much more sense in English

[daxfohl]

Sorry for all the buzzwords....It was 6 AM PST and coffee hadn't kicked in yet.

Interestingly the de-buzzwording of the argument makes sense for the actual thing called "gig economy" too. It could just as well be called the "human rental business".

[wbronitsky]

Hey it happens, no value judgements really; I do it myself all the time. The problem lies in my misunderstanding more than anything else.

“Human rental business” absolutely makes whatever economy that is sound much more like the reality these workers live in. We should use it more instead of the euphemisms we all use now.

[daxfohl]

In fact it highlights the difference too. Cloud services companies own the hardware they rent. Human rental services are pass-thru accounts. Cloud services are more financially successful.

A similar thing happened with eBay and Amazon: Amazon owned the products they sold (initially anyway) and eBay was pass-thru. Amazon was more successful.

So Bezos is currently thinking, how can we own some Amazon humans and provide them for rent?

[9nGQluzmnq3M]

Renting hardware is how VPS companies (remember those?) made money. While that's a part of cloud company business, their real margins are in services, particularly proprietary software: for example, the same AWS t3.small that costs $0.0209/hr suddenly doubles in price to $0.041/hr when it's a db.t3.small running Aurora.