Events

Dr. Will Peichun Wang
Chief Economist
Unity Technologies

We estimate welfare benefits of the public cloud and study the impact of customer inertia on welfare. We develop a novel demand model that allows for both multiple product choices and continuous usage, and estimate the model using proprietary customer-level data. We find the average consumer surplus from cloud usage to be 216% of its cost, and that smaller customers disproportionately benefit from public cloud. We also find significant inertia on the cloud, reducing welfare benefits by 62%. Finally, we show that cloud migration services and introductory discounts can improve both consumer surplus and provider revenue.