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

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Author Info

  • Chaim FERSHTMAN

    (Department of Economics, Tel Aviv University, Israel)

  • Neil GANDAL

    (Department of Economics, Tel Aviv University, Israel)

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    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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    File URL: http://repec.idate.fr/RePEc/idt/journl/CS8505/CS85_FERSHTMAN_GANDAL.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: 109-123

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    Handle: RePEc:idt:journl:cs8505

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    Related research

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

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    References

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    1. Hiroshi Ohashi, 2003. "The Role of Network Effects in the US VCR Market, 1978-1986," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(4), pages 447-494, December.
    2. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-43, Summer.
    3. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
    4. Jay Pil Choi & Chaim Fershtman & Neil Gandal, 2010. "Network Security: Vulnerabilities And Disclosure Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 58(4), pages 868-894, December.
    5. Crawford, Gregory S & Yurukoglu, Ali, 2011. "The Welfare Effects of Bundling in Multichannel Television Markets," CEPR Discussion Papers 8370, C.E.P.R. Discussion Papers.
    6. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
    7. Chou, Chien-fu & Shy, Oz, 1990. "Network effects without network externalities," International Journal of Industrial Organization, Elsevier, vol. 8(2), pages 259-270, June.
    8. Federico Etro, 2011. "The Economics of Cloud Computing," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(2), pages 7-22, May.
    9. David Dranove & Neil Gandal, 2003. "The Dvd-vs.-Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 363-386, 09.
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