Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition

Communications & Strategies, No. 85, 1st Quarter 2012, pp. 109-123

15 Pages Posted: 12 Jan 2013

See all articles by Chaim Fershtman

Chaim Fershtman

Tel Aviv University - Eitan Berglas School of Economics; Tinbergen Institute

Neil Gandal

Berglas School of Economics, Tel Aviv University; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: 2012

Abstract

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.

Keywords: cloud computing, platform competition, network effects, two-sided markets

JEL Classification: L13, L86

Suggested Citation

Fershtman, Chaim and Gandal, Neil, Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition (2012). Communications & Strategies, No. 85, 1st Quarter 2012, pp. 109-123. Available at SSRN: https://ssrn.com/abstract=2199421

Chaim Fershtman (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 7167 (Phone)
+972 3 640 9908 (Fax)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Neil Gandal

Berglas School of Economics, Tel Aviv University ( email )

Tel Aviv University
Tel Aviv 69978
Israel
+972 3 640 9907 (Phone)
+972 3 640 9908 (Fax)

HOME PAGE: http://www.neilgandal.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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