How Firm Age and Size Influence Value Creation from Cloud Computing

Most studies of value creation from cloud computing have examined firms that are old in age and large in size. We theorize different value appropriation pathways from cloud computing dependent upon the age and size of a firm, such that there are different pathways for younger firms as compared to established firms, and smaller firms as compared to larger firms. We hypothesize that established firms gain more Business Performance from Enterprise Cloud Capability – a higher-order capability formed of three second-order cloud computing capabilities, through the mediation effect of Business Responsiveness, whereas younger firms gain more Business Performance directly from Enterprise Cloud Capability. We further hypothesize that smaller firms achieve higher Business Performance through the mediating effect of Business Scalability, whereas larger firms achieve more Business Performance directly from Enterprise Cloud Computing. Partial least squares analysis of matched pair survey data from 197 firms in India provides support for our theor

Investigating the on-demand service characteristics:an empirical study

Purpose Technological developments and new customer expectations of immediacy have driven businesses to adopt on-demand service models. The purpose of this paper is to study the characteristics of a range of on-demand services in order to better understand the meaning of "on-demand" and its implications for service management. This enables the on-demand service logic to be applied to other service contexts, where it may add value for customers. Design/methodology/approach The study starts with a focused literature review and continues with a multiple case study methodology, as the on-demand service concept is in the early stages of theory development. Seven cases were studied, based on a maximum variation sampling strategy. Findings The results show that on-demand services are characterized by three interrelated characteristics: being highly available, responsive and scalable. Analysis further reveals that on-demand services display differences within the conceptual boundaries of these characteristics, i.e. they vary in terms of their availability, responsiveness and scalability. Originality/value Drawing on these findings, the study contributes to the service literature by being the first to specifically conceptualize and define the on-demand services concept and reveal three key characteristics that clarify the distinctive nature of this service type. Accordingly, on-demand services are clearly differentiated from other services. Additionally, the paper discusses the variety within on-demand services and develops an on-demand service continuum that gives detailed insights into the conceptual variations within such services

Investigating the on-demand service characteristics: an empirical study

Purpose: Technological developments and new customer expectations of immediacy have driven businesses to adopt on-demand service models. The purpose of this paper is to study the characteristics of a range of on-demand services in order to better understand the meaning of “on-demand” and its implications for service management. This enables the on-demand service logic to be applied to other service contexts, where it may add value for customers. Design/methodology/approach: The study starts with a focused literature review and continues with a multiple case study methodology, as the on-demand service concept is in the early stages of theory development. Seven cases were studied, based on a maximum variation sampling strategy. Findings: The results show that on-demand services are characterized by three interrelated characteristics: being highly available, responsive and scalable. Analysis further reveals that on-demand services display differences within the conceptual boundaries of these characteristics, i.e. they vary in terms of their availability, responsiveness and scalability. Originality/value:

Hybrid pricing in enterprise software-as-a-service company

Pricing is a fundamental activity that involves multiple functions of a company. Even though it’s performed by all businesses, the pricing decisions aren’t necessarily straightforward. This thesis aims to portray a unique pricing case from the business-to-business software-as-a-service domain. The literature lacks real-life examples from both fields. The case company uses a relatively unique hybrid pricing approach entailing a reoccurring license fee and a one-time implementation charge. The pricing case is for a new service and a new customer, which means that the case is also novel for the case company. The holistic single case study was conducted by interviewing the project personnel from the case company. Documentation from the pricing process was gathered as a secondary source to verify and add to the interview data. Before the empirical part of the study, a literature review was conducted to get a comprehensive view of the topic before interviews and, more importantly, to compare the results to the current theory. The review gathers some well-known basic pricing frameworks and then continues to disclose pricing aspects and models from the domains of the case. The results are presented in three themes: pricing process, parameters, and hybrid pricing. The pricing process followed well the models introduced in the reviewed literature. The case shows that large and strategic clients might have the leverage to influence or dictate the pricing process and used methods. Many of the pricing parameters introduced in the literature were used in the case and vice versa. In addition, a major challenge recognised in theory and experienced in practice was the difficulty of finding information to support the decision making. The strategic value of the project is one of the most prominent parameters affecting the case pricing that wasn’t introduced in the literature. Also, hybrid pricing is overlooked in the reviewed pricing literature. The case study presents one approach. The case company started by separately maximising the pricing of the licensing- and implementation charge and then balancing the two based on client sensitivities and company strategy.Hinnoittelu on perustavanlaatuista toimintaa, jossa on mukana useita yrityksen toimintoja. Vaikka se on tuttua kaikille yrityksille, hinnoittelupäätökset eivät välttämättä ole yksinkertaisia. Tämän diplomityön tavoite on kuvata ainutlaatuinen tapaustutkimus hinnoittelusta yritysohjemistopalvelujen toimialueelta. Kirjallisuudesta puuttuu tosielämän esimerkkejä niin yritysten välisiltä markkinoilta kuin ohjelmistopalveluliiketoiminnasta. Tapausyritys käyttää verrattain ainutlaatuista hybridihinnoittelumallia, johon sisältyy toistuva lisenssimaksu ja kertaluontoinen käyttöönottomaksu. Hinnoittelutapaus koskee uutta palvelua ja uutta asiakasta. Tapaus on siis uusi myös yritykselle. Holistinen yksittäistapaustutkimus tehtiin haastattelemalla projektihenkilöstöä tapausyrityksessä. Hinnoitteluprosessin dokumentaatiota kerättiin toissijaiseksi lähteeksi tukemaan ja verifioimaan haastattelutuloksia. Ennen tutkimuksen empiiristä osaa, tehtiin kirjallisuuskatsaus, jonka avulla saatiin kattava käsitys aiheesta sekä vielä olennaisemmin, jotta tuloksia voitaisiin verrata uusimpaan teoriaan. Katsauksessa kootaan tunnetut yleiset hinnoittelumallit ja jatketaan sen jälkeen tapausspesifien mallien esittelyyn. Tulokset esitellään kolmen teeman avulla: hinnoitteluprosessi ja -parametrit sekä hybridihinnoittelu. Hinnoitteluprosessi noudatti hyvin tutkitussa kirjallisuudessa esiteltyjä malleja. Tapaus osoittaa, että suurilla ja strategisilla asiakkailla saattaa olla vaikutusvaltaa sanella käytetty hinnoitteluprosessi ja menetelmät. Tapauksessa käytettiin useita kirjallisuudessa esitellyistä hinnoitteluparametreista. Lisäksi teoriassa sekä käytännössä nähty suuri haaste oli päätöksentekoa tukevan tiedon löytämisen vaikeus. Projektin strateginen arvo on yksi suurimmista käytännössä käytetyistä parametreista, jota ei kuitenkaan mainittu kirjallisuudessa. Myös hybridihinnoittelu on aiheena jätetty huomiotta hinnoittelukirjallisuudessa. Tapaustutkimus esittää yhden lähestymistavan. Aluksi tapausyritys maksimoi hinnoittelumallissa käytetyt lisenssi- ja käyttöönottomaksut erikseen ja sitten tasapainotti nämä asiakasherkkyyden ja yrityksen strategian perusteella

Análisis de estabilidad de estrategias y optimización exacta de asignación de recursos en empresas de servicios

En este trabajo estudiamos dos problemas que se presentan en empresas que prestan servicios, como por ejemplo soporte técnico. Por un lado, las empresas deben elegir entre dos estrategias desde el punto de vista comercial: brindar sus servicios en una modalidad de cobro de una tarifa fija mensual, o a demanda mediante un cobro por atención, cada una con sus pros y contras. Este problema es tratado en este trabajo mediante Teoría de Juegos Evolutivos. El segundo problema que buscan resolver las empresas es el de asignar de forma óptima sus recursos. Para ello deben decidir ante una diversidad de alternativas en las que deben considerar: la complejidad de los casos, las capacidades de sus técnicos, los costos correspondientes a los distintos niveles de sus técnicos y el cumplimiento de los tiempos de resolución establecidos por contrato. En este trabajo se propone una solución mediante Programación Lineal Entera al problema de asignación de tareas, el que denominamos TAWDP : Task Assignment With Deadlines Problem. Se demuestra que TAWDP es NP-Hard y se realiza una implementación en en AMPL-Cplex del modelo propuesto. Posteriormente se evalúan los tiempos de resolución a medida que el tamaño del problema crece. Los resultados obtenidos muestran que se obtienen soluciones de optimalidad para problemas grandes en tiempos que lo hacen aplicable a empresas nacionales e internacionales.In this work we study two problems that arise in service companies, e.g. technical support services. First, these companies must choose between two commercial strategies: charging a fixed monthly fee or bring their services on demand and then charge for each issue attended. Each strategy has pros and cons. This problem is treated in this work through Evolutionary Game Theory. The second problem that these companies need to solve is optimization of resource allocation. To achieve this goal, they must decide between a lot of alternatives where they must consider: the complexity of cases, the skills of technicians, costs different levels of technicians and compliance with the resolution times established by contract. In this work, a solution is proposed through Integer Linear Programming to the task assignment problem, which we call TAWDP: Task Assignment With Deadlines Problem. We show that TAWDP is NP-Hard and an implementation for the proposed model is made in AMPL-Cplex. Resolution times are evaluated as the size of the problem grows. Obtained results show that optimal solutions are obtained for large problems in times that makes the solution appliable to national and international companies

Analyzing Software as a Service with Per-Transaction Charges

Software as a Service (SaaS) delivers a bundle of applications and services through the Web. Its on-demand feature allows users to enjoy full scalability and to handle possible demand fluctuations at no risk. In recent years, SaaS has become an appealing alternative to purchasing, installing, and maintaining modifiable off-the-shelf (MOTS) software packages. We present a game-theoretical model to study the competitive dynamics between the SaaS provider, who charges a variable per-transaction fee, and the traditional MOTS provider. We characterize the equilibrium conditions under which the two coexist in a competitive market and those under which each provider will fail and exit the market. Decreasing the lack-of-fit (or the cross-application data integration) costs of SaaS results in four structural regimes in the market. These are MOTS Dominance → Segmented Market → Competitive Market → SaaS Dominance. Based on our findings, we recommend distinct competitive strategies for each provider. We suggest that the SaaS provider should invest in reducing both its lack-of-fit costs and its per-transaction price so that it can offer increasing economies of scale. The MOTS provider, by contrast, should not resort to a price-cutting strategy; rather, it should enhance software functionality and features to deliver superior value. We further examine this problem from the software life-cycle perspective, with multiple stages over which users can depreciate the fixed costs of installing and customizing their MOTS solutions on site. We then present an analysis that characterizes the competitive outcomes when future technological developments could change the relative levels of the lack-of-fit costs. Specifically, we explain why the SaaS provider will always use a forward-looking pricing strategy: When lack-of-fit costs are expected to decrease (increase) in the future, the SaaS provider should reduce (increase) its current price. This is in contrast with the MOTS provider, who will use the forward-looking pricing strategy only when lack-of-fit costs are expected to increase. Surprisingly, when such costs are expected to decrease, the MOTS provider should ignore this expectation and use the same pricing strategy as in the benchmark with invariant lack-of-fit costs. </jats:p