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The Economics of Cloud Computing
Abstract
This chapter examines the economic impact of the diffusion of a new technology as cloud computing. This will allow firms to rent computing power and storage from service providers, and to pay on demand, with a profound impact on the cost structure of all the industries, turning some of the fixed costs in marginal costs of production. Such a change will have a substantial impact on the incentives to create new business, and through this, on: investments and macroeconomic growth, job creation in all industries and job reallocation in the ICT sector, and public finance accounts, through the direct impact on the public sector spending and the indirect one on the tax revenues. In this study, the author investigates the consequences of the diffusion of cloud computing on market structures and competition and tries to disentangle the above mentioned aspects with a particular focus on a simulation run for the European economy.
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