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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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5. The Role of Organizational Integration for Software-as-a-Service


5.The Role of Organizational Integration for Software-as-a-Service

The first research phase in the previous chapter has identified reasons for integration aspects to gain importance in the development and operation of Software-as-a-Service solutions. Figure 5.1 summaries the changed setting of Software-as-a-Service providers compared to traditional on-premises vendors. While in the on-premises model, software is developed and shipped to the customer to be installed, customized, operated and eventually used, the vendor takes over the operation activity in the Software-as-a-Service context and offers a ready-to-use systems (Luoma & Rönkkö, 2012). The service character of Software-as-a-Service stresses the importance of the fulfillment phase, as the value creation of services is typically concentrated in this phase (Ramaswamy, 1994).

Figure 5.1.: Changing business model

Given that both the responsibility for software operations and the direct customer relation are closely linked to internal and external communication and coordination aspects, the second phase of empirical research in this chapter draws on an organizational integration perspective to further analyze the implications of the Software-as-a-Service concept for software vendors. More specifically, by drawing on the literature on organizational integration, it aims at providing a better understanding of the consequences of a software vendor’s responsibility for operations, as well as its new task to directly communicate with the end-customer or end-user (see question marks in Figure 5.1). In line with the discussion in the previous chapter, the focus remains on the coordination dimension of organizational structures. The organizational integration concept is linking...

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