Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition
Tel Aviv University - Eitan Berglas School of Economics; Tinbergen Institute
Berglas School of Economics; Centre for Economic Policy Research (CEPR)
CEPR Discussion Paper No. DP8907
Cloud computing is defined to be Internet based computing technology, where the term 'cloud' simply means Internet -- and cloud computing refers to services that are accessed directly over the Internet. There are essentially three categories of cloud computing. (i) Iaas (Infrastructure as a Service) -- number crunching, data storage and management services (computer servers), (ii), SaaS (Software as a Service) -- web based applications, and (iii) PaaS (Platform as a Service) -- essentially an operating system in the cloud. Much of the attention and literature has focused on the revolution in Iaas services provided via the cloud. Despite the major changes in technology in IaaS services, estimates indicate that more than 90% of the cloud computing market (in terms of revenues) will involve (virtual) operating systems and applications software services (i.e., PaaS and SaaS services.) In this paper, we examine how several key economic factors will likely affect competition in SaaS/PaaS services in the cloud.
Number of Pages in PDF File: 19
Keywords: cloud computing, network effects, platform competition, two-sided markets
JEL Classification: L13, L86
Date posted: April 4, 2012
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