To quote Steve Riley from the 2012 DevSummit Keynote: "If you're still paying for it when it's off, it's not the Cloud." Though I may be quoting out of context, that line struck me. The keynote video is now online so see for yourself. Iconoclastic and entertaining. Check it out. The rest of what follows is my own sentiment alone.
Elasticity in computation should be accompanied by elasticity in licensing. Pay for what you need when when you need it. That's a utility model. ArcGIS Server in the Cloud todaY is a BYOL (Bring Your Own License) affair. And those license terms are legacy--a legacy perhaps not worth preserving. This carries the past to our present and future, placing constraints on an otherwise disruptive, evolutionary, and revolutionary technology.
Ideally one should be able to spin up whatever one likes, for however long one requires, to meet an ongoing or transient business need (freedom to experiment?). And then pay only for what's used. Elasticity is a pillar of the Cloud. And those who build upon it should perhaps request more solid and less wispy foundations.
The Cloud is both a technology and a business model. I can't see Dave Chapelle's hypothetical entrepreurs; the "two guys and a credit card" from the 2010 DevSummit Keynote, being able to leverage ArcGIS Server in the Cloud with existing license terms. Entrepreneurs, and those in government who think like entrepreneurs ("Do More With Less" may be incented to go elsewhere for their geospatial Cloud needs without more flexible licensing.
So please strongly consider a pay-as-you-grow, metered licensing model for ArcGIS Server. One that fully unlocks the value of Cloud Computing. The good GIS technology can do in the world positively correlates with the number of folks actively using it to solve real-world problems. Cloud computing can potentially help GIS users deploy more resources toward what really matters. The degree to which that potential is realized depends in part on licensing terms.
So Think Outside the Polygon and reimagine ArcGIS Server licensing in the Cloud. I personally believe Esri will continue to increase its portfolio of service options. Hopefully it will reimagine pricing and licensing along the way. Like Steve Riley said, albeit in another context about another vendor, "watch this space."
Here are some other ideas worth repeating.
Offer ArcGIS for Home at ArcEditor (Standard) license level--not just ArcView (Basic)https://community.esri.com/ideas/3895Offer ArcGIS Server for Home / ArcSDE for Home educational-use programshttps://community.esri.com/ideas/5210Offer ArcGIS Desktop through the Software As A Service (SaaS) Cloud model for both deployment and licensinghttps://community.esri.com/ideas/5281Include ArcGIS Desktop with standard EDN subscriptions (Esri Developer Network)https://community.esri.com/ideas/5273Publish instructor led training lecture and exercise manuals online in PDF format - ArcSDE, ArcGIS Server, ArcGIS Desktophttps://community.esri.com/ideas/3682Include ArcGIS for Home with Esri Enterprise License Agreements (ELAs)https://community.esri.com/ideas/4009Keynote @ Esri 2012 Dev Summit by Steve Riley of Riverbed Systems:In the Cloud, Everything You Think You Know is Wrong. http://www.esri.com/events/devsummit/videos/video3.html