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Exploring the Organizational Impact of Software-as-a-Service on Software Vendors

The Role of Organizational Integration in Software-as-a-Service Development and Operation


Sebastian Stuckenberg

Software-as-a-Service has gained momentum as a software delivery and pricing model within the software industry. Existing practices of software vendors are challenged by a potential paradigm shift. This book analyzes the implications of Software-as-a-Service on software vendors using a business model and value chain perspective. The analysis of qualitative data from software vendors highlights the role of organizational integration within software vendors. By providing insights regarding the impact of Software-as-a-Service on organizational structures and processes of software vendors, this study advances the understanding of Software-as-a-Service which is also highly relevant for practitioners who are involved in the development and operation of enterprise software solutions.
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1. Introduction



Software-as-a-Service describes a software distribution and payment concept that is characterized by a responsibility shift of operations and maintenance activities of software solutions from the customer to the software vendor, together with the introduction of a continuous usage-based pricing scheme (Choudhary, 2007b; Ma, 2007; Xin & Levina, 2008). Software vendors do not only focus on the development of software, but also take care of its delivery to the customer. Customers access the vendor-managed solutions via the Internet by using web browsers (Saaksjarvi et al., 2005). Software-as-a-Service can be classified as the software layer of the overarching Cloud-Computing stack model above the related models of Platform-as-a-Service and Infrastructure-as-a-Service (Weinhardt et al., 2009).

The adoption of Software-as-a-Service solutions by the customer, as well as the number of software vendors offering their solutions in a service mode, has gained significant growth rates over the last years (Merz et al., 2011). Surveys indicate that 71% of the questioned organizations have used Software-as-a-Service solution within the last three years and three-quarter of these organizations plan on increasing their Software-as-a-Service spending (Correia et al., 2012). Software-as-a-Service revenue is expected to grow by 18% in 2012, reaching US-$ 14.5 billion (Mertz et al., 2012). Although certain aspects of the concept are not entirely new and have already surfaced in preceding concepts like Application Software Provisioning (ASP), the recent technological and infrastructure advances have fueled the dissemination of solutions and helped to overcome the pitfalls of previous concepts, for instance, in terms technological...

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