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

Author

Listed:
  • Tim COWEN

    (Sidley Austin LLP)

  • Annabelle GAWER

    (Imperial College London)

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.

Suggested Citation

  • Tim COWEN & Annabelle GAWER, 2012. "Competition in the Cloud: Unleashing Investment and Innovation Within and Across Platforms," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(85), pages 45-62, 1st quart.
  • Handle: RePEc:idt:journl:cs8502
    as

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    File URL: http://repec.idate.org/RePEc/idt/journl/CS8502/CS85_COWEN_GAWER.pdf
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    References listed on IDEAS

    as
    1. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87 World Scientific Publishing Co. Pte. Ltd..
    2. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    3. Farrell, Joseph & Katz, Michael L, 2000. "Innovation, Rent Extraction, and Integration in Systems Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 48(4), pages 413-432, December.
    4. David S. Evans & Andrei Hagiu & Richard Schmalensee, 2008. "Invisible Engines: How Software Platforms Drive Innovation and Transform Industries," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550687, July.
    5. 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.
    6. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-143, Summer.
    7. 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, March.
    8. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

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

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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