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Competition in the Cloud: Unleashing Investment and Innovation Within and Across Platforms

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Author Info

  • Tim COWEN

    (Sidley Austin LLP)

  • Annabelle GAWER

    (Imperial College London)

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    Abstract

    Innovation in the cloud is challenging Europe's telecoms industry and its regulatory system. The shift from 'desktop to data centre' and the provision of computing in the form of a service means that cloud offerings are increasingly dependent on the quality of the underlying communications infrastructure. Critical parts of the infrastructure are regulated, and the role that regulation plays may limit services innovation and in turn may mean that communications infrastructure could become the 'weakest link' in a cloud offering. This article presents an argument that draws on law, economics, and business platforms strategy to expose the incentives and impediments to innovation in cloud computing. It assesses how European policy goals, the Lisbon Treaty and regulatory action interact, and proposes a change in the EU regulatory regime to reflect a duty to promote innovation as a stated goal. This change would encourage new business models to emerge, allowing the incumbent EU telecom network providers the opportunity to contribute to innovation in the cloud. Such innovation would help spur investment and wider competition across platforms which would help realise Europe's objective to drive growth and competitiveness.

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    File URL: http://repec.idate.fr/RePEc/idt/journl/CS8502/CS85_COWEN_GAWER.pdf
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    Bibliographic Info

    Article provided by IDATE, Com&Strat dept. in its journal Communications & Strategies.

    Volume (Year): 1 (2012)
    Issue (Month): 85 (1st quarter)
    Pages: 45-62

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    Handle: RePEc:idt:journl:cs8502

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    Related research

    Keywords: platforms; double-sided markets; innovation; incentives; cloud; competition law; ecosystem; telecom; market performance; market structure; regulation; technologies.;

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    References

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    1. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, 06.
    2. Annabelle Gawer & Rebecca Henderson, 2007. "Platform Owner Entry and Innovation in Complementary Markets: Evidence from Intel," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 1-34, 03.
    3. Joseph Farrell & Michael L. Katz, 2003. "Innovation, Rent Extraction, and Integration in Systems Markets," Development and Comp Systems 0303005, EconWPA.
    4. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
    5. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-43, Summer.
    6. David S. Evans & Andrei Hagiu & Richard Schmalensee, 2006. "Invisible Engines: How Software Platforms Drive Innovation and Transform Industries," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262050854, December.
    7. Teece, David J., 1986. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 15(6), pages 285-305, December.
    8. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
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