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Author Sääksjärvi, Markku ♦ Lassila, Aki ♦ Nordström, Henry
Source CiteSeerX
Content type Text
File Format PDF
Language English
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Value Driver ♦ Saas Model ♦ Value Source ♦ Online Service ♦ Customer-vendor Relationship ♦ Effective Supplier Network ♦ Service Business ♦ Evolving Literature ♦ Software Innovation ♦ Saas Concept ♦ Ecommerce Business Model ♦ Service Business Model ♦ New Online Renting ♦ Continuous Flow ♦ Time Major Risk ♦ Research Article ♦ New Saas Model ♦ Cpu Time-sharing ♦ Fair Revenue ♦ Technical Arrangement ♦ Online Innovation ♦ Application Development Investment ♦ Software Product Business ♦ New Software ♦ Coherent Picture ♦ Supplier-customer Relationship ♦ Ecommerce Relationship ♦ Customer Benefit ♦ Service Model ♦ Typical Utility ♦ Software Industry Organization Report ♦ Value Creation Model ♦ Major Stakeholder ♦ Customer-friendly Way ♦ Attractive Revenue Logic
Description The evolving literature on the new Software as a Service (SaaS) concept gives a coherent picture of the technical arrangements required between the vendor and the customer in order to enable the new online renting of applications. Many of these articles describe the new SaaS model as a new and customer-friendly way of IT outsourcing, where the vendor will own both the software and the IT infrastructure required for the online service, and where both parties will benefit from simple and attractive revenue logic, which is no longer based on the application development investment. What is not clearly observed yet is that the SaaS model will ultimately change the supplier-customer relationship from one-to-one to one-to-many. Therefore, it will also change the customer-vendor relationship to a typical utility based ecommerce relationship. Better understanding of the Software as a Service model will therefore require applying an ecommerce business model. In this paper we will use the value creation model of Amit and Zott (2001) to analyze the value drivers proposed in the research articles and software industry organization reports of the SaaS concept. We will synthesize the benefits and risks of the major stakeholders and discuss the types of value sources covered. We conclude that the promised customer benefits are not easily realized as many of them are at the same time major risks for the provider. Therefore, the SaaS model will require both an effective supplier network and an innovative and fair revenue logic involving lock-in in order to enable a continuous flow of shared software innovations and to succeed in transforming the software product business into service business.
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article
Publisher Date 2005-01-01
Publisher Institution Proceedings of the IADIS International Conference e-Society 2005