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The principle of collaborative consumption is becoming more and more prevalent in today’s society.  The basic concept of collaborative consumption is the idea of purchasing the time accessible to an item as opposed to purchasing the item to own. It is a system based on renting and sharing that the technological realm is starting to adopt. A technology that has become a facilitator to this principle is cloud computing.

Cloud computing is essentially collaborative consumption applied to the web. Instead of users being confined to computing power of their individual servers, they are able to tap into a virtually unlimited amount of power from a resource pool containing hundreds of servers, called a “cloud.”

Cloud computing is a great asset to businesses looking for an innovative and cost effective way to store all of their files, manage bandwidth, and to prepare for times when a greater need for computing power is required. Many companies structured around the collaborative consumption method are benefitting from the space and scalability cloud computing has to offer. Businesses have become more flexible and are able to provide more goods to a broader range of customers at any time.

A good example of a company that uses collaborative consumption as a service model is Netflix.  Instead of owning a video library with thousands of different films ready to view on demand, for just a few dollars a month customers have access to thousands of films without directly owning them.  Cloud computing is what provides Netflix the flexibility and power required to accommodate their millions of subscribers. Cloud computing also provided Netflix with a security blanket in April 2011 when their hosting provider, Amazon, experienced a system failure. Netflix was able to switch to one of their many backup servers in the cloud and still function at normal capacity. Cloud computing not only helped make Netflix elastic and able to provide a service using a collaborative consumption foundation, it helped the company itself become secure.

Other organizations using the collaborative consumption method have actually attributed their popularity and their growth to cloud computing. The “deal-of-the-day” website Groupon is a good example of such a company. Mashable.com, in an interview with director of operations Ryan Miller, and finance manager Chris Bland, reports on how cloud computing helped Groupon “scale its business so quickly and with such agility.” Groupon is able to perform many of their research, advertising, accounting, and business models due to cloud computing. Mashable also reports that Groupon, like Netflix, receives their power from Amazon. Groupon is growing rapidly and needs to be able to provide a quality experience for an ever expanding array of customers around the world. Because of the power provided by Amazon, Groupon is able to handle these demands.

A common weakness of the collaborative consumption method, however, is the quality of product. Pandora, the online music streaming website, was able to overcome this weakness with cloud computing. Pandora is renowned for providing a vast music selection for free. Millions around the world tune in around the clock to listen to all types of music. Although Pandora users can access their favorite types of music at any time, users do not technically own the music itself. Mark Brennan, senior IT director at Pandora, states that Pandora runs on 27 different clouds which provide more than enough power to store music and allow millions of listeners to participate unobstructed.

As the web expands daily, connections between users will become even closer. This creates the perfect opportunity and environment for organizations specializing in collaborative consumption to distribute their products and services. Cloud computing has become an efficient facilitator of this movement.