Christopher Golda

Abundance thinking–understanding the implications of “practically free”–is a core competence of our age. It brought us everything from the iPod to Gmail. -Chris Anderson

The economy of abundance suggests that the consumer will choose abundance over scarcity. There are several examples of this - just think of YouTube, the television of abundance. The problem is that the premise of an economy of abundance is that advances in technology have driven costs to zero. This isn’t the case, as cost is entirely electricity-based in the IT world, and this becomes poignant with the same example of YouTube. Simply put, YouTube was not a profitable business. It then becomes obvious that true, sustainable success will be based on innovative business models and frugal computing. It’s no coincidence that Google are pioneers in frugal computing, as advocates of a new power supply standard for computers, innovators in hardware efficiency, etc. It’s clear that the economy of abundance is realized by companies with well-established infrastructure like Google, Yahoo, Amazon, et al. The rest of us can expect to be investing in services such as Amazon’s S3, which have great prospects of reducing the non-zero costs.

Addendum: For a more in-depth analysis of the paradox of abundance, read Nicholas Carr’s post on frugal computing.