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Cloud computing, if anything, depends on the idea that we will have ample and cheap bandwidth that will allow us to access various types of information and services on any kind of device, anywhere. The rapid growth of cloud as outlined by Amazon CTO Werner Vogels at our Structure 2011 conference only underscores the need for more bandwidth.

This need only goes up as we start living in an on-demand world, streaming instead of storing information locally. Folks at online storage-as-a-service provider Backblaze decided to compare the decline in bandwidth prices and the local storage costs and found out that local drives are still more efficient. (I am assuming that they are looking exclusively at data from the US, because things might be different in some other parts of the world where they sell really cheap super-broadband.) While that is true on pure cost basis, but as I have argued before, the value for hardware lies in services because they increase engagement with the hardware.

So perhaps if we are going to debate about bandwidth and storage, maybe we should also factor the falling prices of in-house bandwidth — because in the end, those 2 terabyte drives are not of much use unless they are on the network and streaming some music or serving up some documents.