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By sharing consumable and "intangible" computing power between multiple "tenants", utilization rates can be improved (as servers are not left idle) which can reduce costs significantly while increasing the speed of application development.
A side effect of this approach is that "computer capacity rises dramatically" as customers do not have to engineer for peak loads.
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Although there have been efforts to match the legal environment (such as US-EU Safe Harbor), providers like Amazon Web Services usually deal with international markets (typically the United States and European Union) by deploying local infrastructure and allowing customers to select their countries.