In 2021, governments around the world hate the Cloud Czars.
They don’t like seeing companies both build infrastructure and rent it out to competitors. They don’t want Amazon to compete with Netflix or Walmart. They don’t want Microsoft hosting Salesforce, then building its own suite. They don’t like Google doing search while it rents its cloud. They don’t like the Apple app store. They blame Facebook for Trump.
It’s not just here. China is doing all the things Americans just pretend to want, taking down Alibaba, Tencent and Baidu with new regulations and demands. Of course, the same people who want Facebook destroyed pretend that China is going after Alibaba because “it’s communist” and Jack Ma a threat to the regime. (As if Mark Zuckerberg isn’t?)
Here’s the problem. Clouds are expensive. The price started a decade ago at $1 billion/quarter. Now it’s about $5 billion/quarter. That money isn’t borrowed. It all comes from cash flow. The game was said to be too rich for AT&T, too rich for IBM, too rich for HP and Verizon.
Somehow it wasn’t too rich for Facebook.
Cash flow is still how the clouds are paid for. This is what makes clouds cheap. Their owners aren’t borrowing to build, as the so-called “data center REITs” are. They’re not shoveling rental profits to shareholders either. They’re subsidized by advertising and the Czars’ own services. Free services, made free by advertising, created the clouds.
In demanding the clouds be broken up, governments threaten those free services. That’s the real bottom line. That free shipping from Amazon is also possible only because of its cloud.
This is the question regulators need to answer, the question reporters aren’t asking them. How can the free web survive if you break up the Cloud Czars? How will the clouds be paid for if not with cash flow?
