[ghshephard]

That, $0.2cents/second of course, is on the margin. The real challenge to doing this is, of course, not the hardware/hvac/colo costs, but the several millions (tens of millions?) of dollars associated with building the software infrastructure required to scale/deploy the CPU/Storage/Services dynamically. And then there is the well staffed devops/NOC environment required. And the single-minded dedication to building these services so reliable, that you can run your primary business on. Oh, and course having a massively scaled business to both offset all those devops/noc/engineering efforts, and beta-test your scaling environment/server/storage infrastructure.

Other than Amazon, I can only think of Google being in a position in which such an enterprise can take off.

We tried this at Loudcloud, and it turns out you need more than a bunch of smart people, lots of money, and single-minded focus towards building on-demand infrastructure.

[EwanToo]

Of course today you can get over 90% of the required software off the shelf, see cloudstack and openstack, both used in clusters of 1000s of production servers running 10,000s of VMs.