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
This paper covers potential diseconomies in cloud computing from cloud users point of view. The paper is interesting and topical but requires clarification, better argumentation, and justification of the theoretical base.
Major comments:
- Introduction is very short and half of it is used to explain the content of the paper. The motivation of the work, importance of the topic, research aim, and intended contribution of the paper should be argued better. That is, why is it important to study the diseconomics of scale in cloud computing and why is it worthwhile to the reader waste his/her time to read the article. Because of the page limitation, I recommend to delete the second paragraph from the introduction, as it does not include anything important.
- The second section is not very informative. First you tell some basic facts/terms about cloud computing (we can assume that the reader of the journal already know these) and the second paragraph is very confusing. The first paragraph should present the most import and latest works related to the topic so that the reader will see that you master the literature. In the second section, sorry to say, I was really lost that who is the provider and what is the difference between user and consumer? Can consumer be also user, or can user be consumer or provider? This section requires a lot of clarification. Why do not use well accepted terms “IaaS provider”, PaaS provider”, “SaaS provider” and then consumer/customer/end-user?
- The literature that you use to refer sources of economics of scale is not very scientific. It would be more strength if you add some literature from economic studies and use those together to support your arguments related to cloud computing. This applies also to the diseconomics of scale section.
- The arguments that you present in the diseconomics of scale section are relatively weak as it do not base on an empirical study and it is not well grounded from the existing literature. In addition, diseconomics of scale (in cloud computing) seems to be related to the market situation and competition in the market. Maybe by adding some insights from Porter’s competitive advantage theory would help and make the section more plausible.
- I do not see any reason for the sub-section 4.3. It should be deleted or better integrated to the topic.
Minor comments:
- Do not use brackets in the title
- “kick in” does not sound very academic
- It would be good to refer to Table 2 before “R6”.