Economics and Value of Information Systems


Platform as a Service is at the peak of inflated expectations. The term denotes some of the latest developments in the Information and Communication Technology industry, which are significantly changing the way services are produced, consumed, and deployed. While companies are investing in the underlying technology of cloud-based platforms, the emphasis on business model innovation and re-thinking the revenue streams falls behind. This study shows that current revenue streams of cloud-based platforms are unpretentious and follow simple patterns. Most cloud-based platform providers focus only on direct revenue streams, which are typically based upon subscription fees. Multi-sided business models and innovative ways of revenue generation are rarely present, even though the manner in which cloud platforms are commercialized is the deciding factor for the economic outcome.