We at LIRNEasia have always seen transaction costs at the heart of much of what we do. Our interest in ICTs in value chains, for example, has been focused on changes to transaction costs made possible by ICTs. This fascinating article on the business models underlying cloud computing foregrounds the scale economies perfected by the likes of Amazon. But perhaps the real story is in the negligible transaction costs of billing? This economics of tiny things demonstrates the global power of the few companies, including Microsoft and Google, that can make fortunes counting this small and often.
This is not immediately relevant to our market segment, but it will become so over time. This has the potential to displace laptops and small smartphones. The economies of scale will kick in, and prices will come down. And a key element in the Internet eco system will be put in place. According to a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Smart Connected Device Tracker, worldwide phablet shipments (smartphones with screen sizes from 5.
When Bill Melody was appearing as an expert witness in the AT&T case back in the 1980s, he used to be assailed about economies of scale that AT&T supposedly enjoyed, which made them per se more efficient than any of the challengers. His answer was not that they did not exist, but that they were overridden by diseconomies of coordination. His conclusion is being supported by two scientists from Santa Fe Institute. The discussion of corporations comes at the end of a fascinating article on the laws governing cities in the NYT. This raises the obvious question: Why are corporations so fleeting?