That was an interesting article. I found it on digg.com
However , I am a bit confused about this scarce component and non-scarce component.
Consider a web application (say something like Gmail without ads) that uses bandwith + resource for each number of transactions it receives from it's clients.
The web application itself is non-scarce, its just one copy running on server(s), cloud, but can serve millions of clients (provided scalable infrastructure env). So now the scarce good would be the extra storage, bandwith, usage, and support for the client ? The scarce good is directly connected to the non-scarce good which is the application code running on the server(s).
I am confused. Why dont the web application simply charge a flat fee per month ? wouldn't this be doing the same thing ?
So in this case scenario, and my understanding of the article, to increase market share, there's 2 possible strategy.
1) charge a mark-up bandwith,storage,resource consumption fee (so it costs 10cents/GB, app sells $80cents/GB), but let users consume it for free (like free trial 5GB quota).