Skip to main content
SpringerLink
Log in
Book cover

International Conference of Software Business

ICSOB 2018: Software Business pp 108–124Cite as

Exploring Business Model Changes in Software-as-a-Service Firms

  • Conference paper
  • First Online:

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 336))

Abstract

This paper reports the findings from research on the changes in the business models of Software-as-a-Service (SaaS) firms. The extant literature defines these firms through the use of cloud computing technologies as part of their products and service. However, current literature is missing consideration of the effects of adopting these technologies on the elements of business model, including value proposition, activities, structure and revenue logic. This paper presents findings from 324 responses to a questionnaire survey on how these business model elements of software firms have changed as a result of adopting cloud computing technologies and competitive pressures, and identifies the differences in changes between the SaaS firms originating from software product and software services business. The findings suggest that the SaaS firms are generally unifying their core product offering and pricing across customers and increasing their sales efforts. Besides, the two types of SaaS firms are different in terms of their software-related activities. The present study therefore provides insights into development of the software market, where SaaS firms are claimed to challenge the proprietary software vendors. The findings also imply that the conceptualization of SaaS in IS adoption and IT outsourcing studies can be improved.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

References

  1. Al-Debei, M., Avison, D.: Developing a unified framework of the business model concept. Eur. J. Inf. Syst. 19(3), 359–376 (2010)

    Article  Google Scholar 

  2. Andriole, S.: Seven indisputable technology trends that will define 2015. Commun. Assoc. Inf. Syst. 30, 61–72 (2012)

    Google Scholar 

  3. Armbrust, M., et al.: A view of cloud computing. Commun. ACM 53(4), 50–58 (2010)

    Article  Google Scholar 

  4. Aspara, J., Lamberg, J.A., Laukia, A., Tikkanen, H.: Strategic management of business model transformation: lessons from Nokia. Manag. Decis. 49(4), 622–647 (2011)

    Article  Google Scholar 

  5. Baden-Fuller, C., Morgan, M.: Business models as models. Long Range Plan. 43(2–3), 156–171 (2010)

    Article  Google Scholar 

  6. Benlian, A., Hess, T., Buxmann, P.: Drivers of SaaS-adoption – an empirical study of different application types. Bus. Inf. Syst. Eng. 1(5), 357–369 (2009)

    Article  Google Scholar 

  7. Benlian, A., Koufaris, M., Hess, T.: Service quality in software-as-a-service: developing the SaaS-Qual measure and examining its role in usage continuance. J. Manag. Inf. Syst. 28(3), 85–126 (2011)

    Article  Google Scholar 

  8. Casadesus-Masanell, R., Ricart, J.: From strategy to business models and onto tactics. Long Range Plan. 43(2–3), 195–215 (2010)

    Article  Google Scholar 

  9. Chesbrough, H., Rosenbloom, R.S.: The role of the business model in capturing value from innovation: evidence from Xerox Corporation’s technology spin-off companies. Ind. Corp. Change 11(3), 529–555 (2002)

    Article  Google Scholar 

  10. Choudhary, V.: Comparison of software quality under perpetual licensing and software as a service. J. Manag. Inf. Syst. 24(2), 141–165 (2007)

    Article  MathSciNet  Google Scholar 

  11. Currie, W.L., Desai, B., Khan, N.: Customer evaluation of application services provisioning in five vertical sectors. J. Inf. Technol. 19(1), 39–58 (2004)

    Article  Google Scholar 

  12. Cusumano, M.: Finding your balance in the products and services debate. Commun. ACM 46(3), 15–17 (2003)

    Article  Google Scholar 

  13. Cusumano, M.: The changing software business: moving from products to services. IEEE Comput. 41(1), 20–27 (2008)

    Article  MathSciNet  Google Scholar 

  14. Dsouza, A., Kabbedijk, J., Seo, D., Jansen, S., Brinkkemper, S.: Software-as-a-Service: implications for business and technology in product software companies. In: PACIS 2012 (2012)

    Google Scholar 

  15. Davies, A., Brady, T., Hobday, M.: Charting a path towards integrated solutions. MIT Sloan Manag. Rev. 47(3), 39–48 (2006)

    Google Scholar 

  16. Demil, B., Lecocq, X.: Business model evolution. in search of dynamic consistency. Long Range Plan. 43(2–3), 227–246 (2010)

    Article  Google Scholar 

  17. DeVellis, R.: Scale Development: Theory and Applications. Sage Publications, London (2003)

    Google Scholar 

  18. Dillman, D., Smyth, J., Christian, L.: Mail and Internet Surveys: The Tailored Design Method, 2nd edn. Wiley, Hoboken (2007)

    Google Scholar 

  19. Hedman, J., Kalling, T.: The business model concept: theoretical underpinnings and empirical illustrations. Eur. J. Inf. Syst. 12(1), 49–59 (2003)

    Article  Google Scholar 

  20. Kern, T., Willcocks, L., Lacity, M.: Application service provision: risk assessment and mitigation. MIS Q. Exec. 1(2), 113–126 (2002)

    Google Scholar 

  21. Kindström, D.: Towards a service-based business model – key aspects for future competitive advantage. Eur. Manag. J. 28(6), 479–490 (2010)

    Article  Google Scholar 

  22. Laatikainen, G., Ojala, A., Mazhelis, O.: Cloud services pricing models. In: Herzwurm, G., Margaria, T. (eds.) ICSOB 2013. LNBIP, vol. 150, pp. 117–129. Springer, Heidelberg (2013). https://doi.org/10.1007/978-3-642-39336-5_12

    Chapter  Google Scholar 

  23. Lehmann, S., Buxmann, P.: Pricing strategies of software vendors. Bus. Inf. Syst. Eng. 1(6), 452–462 (2009)

    Article  Google Scholar 

  24. Luoma, E., Rönkkö, M., Tyrväinen, P.: Current Software-as-a-Service business models: evidence from finland. In: Cusumano, M.A., Iyer, B., Venkatraman, N. (eds.) ICSOB 2012. LNBIP, vol. 114, pp. 181–194. Springer, Heidelberg (2012). https://doi.org/10.1007/978-3-642-30746-1_15

    Chapter  Google Scholar 

  25. Magretta, J.: Why business models matter. Harvard Bus. Rev. 80(5), 86–92 (2002)

    Google Scholar 

  26. Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J., Ghalsasi, A.: Cloud computing — the business perspective. Decis. Support Syst. 51(1), 176–189 (2011)

    Article  Google Scholar 

  27. McCullagh, P.: Regression Models for Ordinal Data. J. R. Stat. Soc., Ser. B (Methodol.) 42(2), 109–142 (1980)

    MathSciNet  MATH  Google Scholar 

  28. Mell, P, Grance, T.: The NIST definition of cloud computing. national institute of standards and technology (2011)

    Google Scholar 

  29. Miller, D.: Configurations of strategy and structure: towards a synthesis. Strateg. Manag. J. 7(3), 233–249 (1986)

    Article  Google Scholar 

  30. Miller, D., Friesen, P.: Innovation in conservative and entrepreneurial firms: two models of strategic momentum. Strateg. Manag. J. 3(1), 1–25 (1982)

    Article  Google Scholar 

  31. Osterwalder, A., Pigneur, Y., Tucci, C.: Clarifying business models: origins, present, and future of the concept. Commun. Assoc. Inf. Syst. 16, 1–25 (2005)

    Google Scholar 

  32. Podsakoff, P., MacKenzie, S., Lee, J., Podsakoff, N.: Common method biases in behavioral research: a critical review of the literature and recommended remedies. J. Appl. Psychol. 88(5), 879–903 (2003)

    Article  Google Scholar 

  33. Rajala, R., Rossi, M., Tuunainen, V.: A framework for analysing software business models. In: ECIS 2003, pp. 1614–1627 (2003)

    Google Scholar 

  34. Rajala, R., Westerlund, M.: Business models – a new perspective on firms’ assets and capabilities: observations from the finnish software industry. Entrep. Innov. 8(2), 115–125 (2007)

    Article  Google Scholar 

  35. Rappa, M.: The utility business model and the future of computing services. IBM Syst. J. 43(1), 32–42 (2004)

    Article  Google Scholar 

  36. Schief, M., Buxmann, P.: Business models in the software industry. In: HICSS 2012, pp. 3328–3337. IEEE (2012)

    Google Scholar 

  37. Schwarz, A., Jayatilaka, B., Hirschheim, R., Goles, T.: A conjoint approach to understanding IT application services outsourcing. J. Assoc. Inf. Syst. 10(10), 748–781 (2009)

    Google Scholar 

  38. Stuckenberg, S., Fielt, E., Loser, T.: The impact of software-as-a-service on business models of leading software vendors: experiences from three exploratory case studies. In: PACIS 2011. Queensland University of Technology (2011)

    Google Scholar 

  39. Susarla, A., Barua, A., Whinston, A.: A transaction cost perspective of the ‘Software as a Service’ business model. J. Manag. Inf. Syst. 26(2), 205–240 (2009)

    Article  Google Scholar 

  40. Teece, D.: Business models, business strategy and innovation. Long Range Plan. 43(2–3), 172–194 (2010)

    Article  Google Scholar 

  41. Tyrväinen, P., Selin, J.: How to sell SaaS: a model for main factors of marketing and selling Software-as-a-Service. In: Regnell, B., van de Weerd, I., De Troyer, O. (eds.) ICSOB 2011. LNBIP, vol. 80, pp. 2–16. Springer, Heidelberg (2011). https://doi.org/10.1007/978-3-642-21544-5_2

    Chapter  Google Scholar 

  42. Wirtz, B., Schilke, O., Ullrich, S.: Strategic development of business models: implications of the web 2.0 for creating value on the internet. Long Range Plann. 43(2–3), 272–290 (2010)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Faculty of Information Technology, University of Jyväskylä, P.O. Box 35, Agora, 40014, Jyväskylä, Finland

    Eetu Luoma, Gabriella Laatikainen & Oleksiy Mazhelis

Authors
  1. Eetu Luoma
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Gabriella Laatikainen
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Oleksiy Mazhelis
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Eetu Luoma .

Editor information

Editors and Affiliations

  1. Blekinge Institute of Technology, Karlskrona, Sweden

    Krzysztof Wnuk

  2. Utrecht University, Utrecht, The Netherlands

    Sjaak Brinkkemper

Rights and permissions

Reprints and permissions

Copyright information

© 2018 Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Luoma, E., Laatikainen, G., Mazhelis, O. (2018). Exploring Business Model Changes in Software-as-a-Service Firms. In: Wnuk, K., Brinkkemper, S. (eds) Software Business. ICSOB 2018. Lecture Notes in Business Information Processing, vol 336. Springer, Cham. https://doi.org/10.1007/978-3-030-04840-2_8

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-04840-2_8

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-04839-6

  • Online ISBN: 978-3-030-04840-2

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation