Microsoft’s Jim Gray has published a succinct analysis of computing economics in light of distributed/grid computing, concluding that it’s not the free ride that it might appear, for many computing applications.

(Thanks, Jim!)

The Cost of Computing

Computing is free.
The world’s most powerful computer is free (SETI@Home is a 54 teraflops machine) (see Resources). Google freely provides a trillion searches per year to the world’s largest online database (2 petabytes). Hotmail freely carries a trillion eMail messages per year. Amazon.com offers a free book search tool. Many sites offer free news and other free content. Movies, sports events, concerts, and entertainment are freely available via television.

Actually, it’s not free, but most computing is now so inexpensive that advertising can pay for it.
The content is not really free; it is paid for by advertising. Advertisers routinely pay more than a dollar per thousand impressions (CPM). If Google or Hotmail can collect a dollar per CPM, the resulting billion dollars per year will more than pay for their development and operating expenses. If they can deliver a search or a mail message for a few micro-dollars, the advertising pays them a few milli-dollars for the incidental “eyeballs”. So, these services are not free - advertising pays for them.