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WHAT CLOUD USERS (SaaS PROVIDERS) SHOULD KNOW ABOUT DISECONOMIES OF SCALE?

Authors: Nilay Oza

Category: research article

Keywords: Cloud Economics, Economies of Scale, SaaS providers, Diseconomies of Scale, Cloud Software, Oligopoly

Abstract: This paper identifies potential diseconomies of scale for cloud users. The paper questions if the scale benefit currently available to cloud users is sustainable for long term. The paper highlights specific economies and diseconomies across supply-side savings, demand-side savings and multi-tenancy efficiency from cloud user perspectives. The paper argues that diseconomies will kick in if cloud users do not maintain scale benefit. The paper offers concrete recommendations for cloud users to maintain the scale benefit by offsetting sources of diseconomies. Finally, implications for future from potential diseconomies are presented.

Permanent link to this page: http://urn.fi/URN:NBN:fi-fe201203181574

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