Discussion Paper Details

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

Author(s): Chaim Fershtman and Neil Gandal

Publication Date: March 2012

Keyword(s): cloud computing, network effects, platform competition and two-sided markets

Programme Area(s): Industrial Organization

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.

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Bibliographic Reference

Fershtman, C and Gandal, N. 2012. 'Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition'. London, Centre for Economic Policy Research.