Cloud computing is a term used to describe the delivery of information systems without the presence of physical hardware or the purchase of software in some instances. What this means for an average business is that they can purchase a slice of the processing capability, data storage or content delivery of large-scale computer systems, but at a fraction of the price of purchasing the same equipment.

Amazon web services (aws.amazon.com) has been one of the pace-setting firms in cloud computing. An arm of the well-known online retailer, the web services division offers a broad range of services from computing to database services, payments and billing, data storage and even a staffed support service. The pricing depends on the services offered, and until recently the competition was scarce. In February 2010, Microsoft released its cloud computing offering called Microsoft Azure. The immediate response of Amazon was to reduce all prices by \($0.02\) per gigabyte, which at the highest usage levels represented a price drop of 40 per cent. In the accounting field, a number of providers offer cloud-based services, charging a small monthly fee (e.g. http://quickbooksonline.intuit.com/ charges \($12-75\) per month) or even free (e.g. www.billfa ster.com). Increasingly, accounting software providers are providing a basic product free, in the hope that enough paid subscribers will sign up over the longer term.

Questions 

1 Do you think a largescale provider like Amazon can influence prices of cloudcomputing in the longer-term?

2 What is your opinion on a long-term price of zero, as currently offered by some cloud providers of accounting software? Is this model sustainable in the long run?