Cloudonomics: The Business Value of Cloud Computing, + Website

CHAPTER 23

Lazy, Hazy, Crazy

The foundation of economics for much of the twentieth century was the notion that humans are rational economic decision makers. Given a choice between buying an apple for 53 cents or one for 54 cents, a rational consumer would choose the former. Moreover, if the price were stochastic, a person would use probability to determine the expected price, perhaps adjusted by a utility function representing personal value, and select accordingly.

Unfortunately, as an avalanche of elegantly designed experiments over the last several decades has shown, such cool, calculating rationality rarely matches actual human behavior. Instead, it might be said—more colloquially than behavioral economists would probably prefer—that we are lazy, hazy, and crazy.1

Human behavioral anomalies are important to the cloud, because they impact everything from value propositions to customer decision-making processes, in some cases favoring cloud characteristics, such as the lack of up-front commitment and on demand, but in some cases acting as obstacles to adoption.