The Rental Economy

One of the determining characteristics of any economy is who owns what assets. Different economic systems (capitalism, socialism, communism) differ primarily based on who owns and who rents capital assets. Ownership of assets shifts and evolves over time thanks to technological disruption, economies of scale and shifting income distributions.

But many of the most disruptive tech companies of the last 20 years have been successful precisely because they have disrupted asset ownership in a novel way, with dramatic consequences. Amazon is the poster child of this phenomenon. Not only did Amazon see building and owning an entire national delivery infrastructure as not only reasonable but as an absolute business necessity, it also built Amazon Web Services which powered the rise of the enterprise Cloud. The Cloud has been a dramatic platform shift for businesses and has changed the paradigm around owning computing power, storage and ancillary services. In the 1990s and early 2000s, tech companies needed to build and maintain their own server racks and hire in-house teams focused on just this.

With Amazon Web Services this all went away. Instead, businesses could rent compute or storage space through AWS which continuously…