Working Paper: CEPR ID: DP8907
Authors: Chaim Fershtman; Neil Gandal
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; network effects; platform competition; two-sided markets
JEL Codes: L13; L86
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| transition to cloud services (L86) | weaken indirect network effects (D85) |
| weaken indirect network effects (D85) | greater diversity in platform offerings (L17) |
| organizational structure of cloud computing (L22) | competitive dynamics in the cloud ecosystem (D26) |