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Summary

Although "unlimited" offerings of anything can be attractive marketing tools, they can generate serious unintended consequences if they are implemented without a clear understanding of how humans react to abundance.

Whether storage or seafood buffet, "all you can eat" has limits

In late 2014 Microsoft made a surprising announcement that all Office365 users would get "unlimited" OneDrive storage. The announcement was significant in differentiating Microsoft from other cloud players, such as Google and Amazon, that maintained individual storage limits for end users. A year later and Microsoft have recently advised that unlimited storage will no longer apply, citing concerns with individual users consuming 75TB or 14,000 times the average 5GB OneDrive user.

Microsoft will suffer negative customer perceptions from users with larger than average needs, who will now find they are required to pay for their "unlimited" consumption. However, it is interesting to understand the drivers of human behavior that are at play.

Ovum has previously identified the challenges in maintaining useable performance in public Wi-Fi deployments. As the density of users increases, it is common for performance to degrade to be unusable. This is a modern day example of the "tragedy of the commons," the behavioral economics theory espoused by the ecologist Garrett Hardin, where, in the absence of constraints, individual consumption decisions deplete a common resource to the detriment of all involved.

Outside of the technology industry, purveyors of "all you can eat" buffets have known about this for some time. Once you remove the financial constraint, a percentage of customers will "overconsume" and eat into your profit. Buffet managers typically implement physical limits by setting a "one plate only" caveat.

Internet service providers also need to manage the risks implicit in offering "unlimited" broadband packages. Although these packages are unlimited in the sense that there is no additional charge for more consumption, most agreements limit performance once a certain threshold is reached to ensure a few heavy users don't degrade performance for the rest.

A fundamental concern with the concept of unlimited cloud storage is that it breaks the essential premise underlying "as-a-service" delivery – that costs are proportional to usage. The more you consume, the more you pay. The rising cost not only acts as a break on demand, but also provides revenue to deliver the additional resource. Take that constraint away and there is only one possible outcome, whether we are discussing storage, bandwidth, or seafood buffets.

What all these examples have in common is the need to manage resource consumption based on the outliers in the customer base rather than the average, and to anticipate the human trait of overconsumption in situations of abundance.

Appendix

Further reading

Enterprise Case Study: Scalability, Reliability, and Security for High-Profile Events, IT0007-000815 (May 2015)

Author

Al Blake, Principal Analyst, Public Sector

al.blake@ovum.com

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