Could Tech Push The Price Of Starting Up Down To Zero?
It might sound like a crazy idea to suggest that technology could somehow push the price of starting up down to zero. But with the advent of new technology, it no longer appears to be outside of the realm of possibility, especially for startups in the tech and computing sector.
The reasons for this have to do with a group of intersecting technologies which are growing in power exponentially. Just imagine for a second that you’re an entrepreneur who wants to start up a new software company that provides e-commerce platforms to internet retailers. In the past, you would have had to set up your own offices, build your own internal computer networks and design the app from scratch. But today, things are a little different. Most of the computing services core to a business can be outsourced, there’s really no need for an office thanks to communication apps, and the idea of designing an app from scratch is long gone. Software packages allow businesses to operate at a much higher level.
Crucially, all this technology is on an exponential downward trend. What this means – mathematically at least – is that much of it will soon be so cheap that it will be effectively free. We’ve already seen this in the realm of emails where the price is so negligible that most companies don’t factor it into their cost calculations, despite sending millions of emails every month. And we’re going to see the same processes popping up elsewhere too.
Data Centers Will Soon Be Almost Free
Take data centers, for instance. For years, data centers have been very expensive to run. Despite the fact that processors are getting more and more efficient, demand for their services is so high that even Moore’s law can’t keep up. But data centers are about to benefit from a double whammy of exponential technologies. Not only are companies like AMD and Nvidia designing smaller and smarter server chips, but the cost of providing energy to data centers is also on an exponential decline. It turns out that the cost of providing a kilowatt of solar energy goes down by about 10 percent a year. No – it’s not as dramatic as Moore’s law, but the cumulative effect of these annual decreases has been staggering. It’s conceivable that both better efficiency and increased use of cheap energy will outstrip increases in the demand for data centers, pushing the price down to zero.
The Ubiquitous Cloud Will All But Eliminate Software Costs
Another exciting area is the cloud. Companies are already able to get very cheap Windows VPS services and outsource much of their IT. But with increased competition and variety, these services will push costs down even more.
Businesses will effectively be able to buy in the cognitive services that they need. Say, for instance, a business needs an accountant or an engineer for the day. Well, all they’ll have to do it hook up to the appropriate cloud application, and they’ll be able to connect with the person that they need, close to the cost of the raw labor input. This will eliminate search costs and the cost of installing in-house hardware.