Evaluating the App-Store Model for Enterprise Application Software and Related Services

Spurred by the overwhelming success of mobile “app stores”, enterprise software vendors are increasingly embracing the use of online sales channels. Whereas organizational buying behavior has already been investigated with regard to the acquisition of enterprise software via traditional offline channels, researchers have not yet focused on its provision using an electronic sales channel. In this explorative study, we laid the first bricks to fill this research gap and provided valuable insight to practitioners confronting this marketing innovation. Relying on a qualitative research strategy, we assessed the extent to which an electronic sales channel may support the different phases of a generic software buying process, and the impact of product characteristics on enterprise customers’ channel adoption. We identified a set of adoption drivers and barriers which ought to be taken into account by channel providers, and elicited technological and organizational solutions from the interviews

Adoption Of An Online Sales Channel And Appification In The Enterprise Application Software Market: A Qualitative Study

Pioneered by Apple’s App Store, online sales channels for software applications have acquired a prominent role in the consumer software market. This success has been a catalyst for several vendors of enterprise application software, who opened their own online sales channel alongside traditional ones based on the deployment of intermediaries and sales teams. However, it is disputable whether the online purchase of a software application is as compelling for an organization as it is for an individual consumer, and whether drivers and barriers of channel adoption are the same in these different contexts. Therefore, relying on a qualitative research strategy, we explored the channel adoption decision made by organizational software buyers to uncover and categorize relevant influencing factors. In particular, solution attributes such as specificity, price, implementation/integration effort, scope, and evaluability appear to play a key role alongside contractual aspects and the existence of an established relationship with the vendor. We also investigated factors’ interdependences to sketch an online channel adoption model which, on the one hand, may allow practitioners in the enterprise software market to diagnose channel adoption issues and, on the other, may serve as foundation for further multidisciplinary research in this topical area of study

Online and Offline Sales Channels for Enterprise Software: Cannibalization or Complementarity?

Lured by the success of online sales channels in the consumer software market, enterprise software vendors have launched proprietary online channels alongside their traditional offline ones. However, it is disputable whether the online purchase of a software application is as compelling for an organizational buyer as it is for an individual consumer. Relying on a qualitative research strategy and a cross-sectional research design, we have explored the channel adoption decision made by organizational entities when they purchase business software applications. We have constructed a qualitative channel adoption model which takes into account the relevant drivers and barriers, their interdependences, and the buying process phases. Our findings suggest that offline channels will not be cannibalized unless some peculiar characteristics of enterprise software applications change. We have also derived recommendations for the design of multichannel sales systems according to the main classes of enterprise software products and services

Detection and Measurement of Sales Cannibalization in Information Technology Markets

Characteristic features of Information Technology (IT), such as its intrinsic modularity and distinctive cost structure, incentivize IT vendors to implement growth strategies based on launching variants of a basic offering. These variants are by design substitutable to some degree and may contend for the same customers instead of winning new ones from competitors or from an expansion of the market. They may thus generate intra-organizational sales diversion – i.e., sales cannibalization. The occurrence of cannibalization between two offerings must be verified (the detection problem) and quantified (the measurement problem), before the offering with cannibalistic potential is introduced into the market (ex-ante estimation) and/or afterwards (ex-post estimation). In IT markets, both detection and measurement of cannibalization are challenging. The dynamics of technological innovation featured in these markets may namely alter, hide, or confound cannibalization effects. To address these research problems, we elaborated novel methodologies for the detection and measurement of cannibalization in IT markets and applied them to four exemplary case studies. We employed both quantitative and qualitative methodologies, thus implementing a mixed-method multi- case research design. The first case study focuses on product cannibalization in the context of continuous product innovation. We investigated demand interrelationships among Apple handheld devices by means of econometric models with exogenous structural breaks (i.e., whose date of occurrence is given a priori). In particular, we estimated how sales of the iPod line of portable music players were affected by new-product launches within the iPod line itself and by the introduction of iPhone smartphones and iPad tablets. We could find evidence of expansion in total line revenues, driven by iPod line extensions, and inter- categorical cannibalization, due to iPhones and iPads Mini. The second empirical application tackles platform cannibalization, when a platform provider becomes complementor of an innovative third party platform thus competing with its own proprietary one. We ascertained whether the diffusion of GPS-enabled smartphones and navigation apps affected sales of portable navigation devices. Using a unit-root test with endogenous breaks (i.e., whose date of occurrence is estimated), we identified a negative shift in the sales of the two leaders in the navigation market and dated it at the third quarter of 2008, when the iOS and Android mobile ecosystems were introduced. Later launches of their own navigation apps did not significantly affect these manufacturers’ sales further. The third case study addresses channel cannibalization. We explored the channel adoption decision of organizational buyers of business software applications, in light of the rising popularity of online sales channels in consumer markets. We constructed a qualitative channel adoption model which takes into account the relevant drivers and barriers of channel adoption, their interdependences, and the buying process phases. Our findings suggest that, in the enterprise software market, online channels will not cannibalize offline ones unless some typical characteristics of enterprise software applications change. The fourth case study deals with business model cannibalization – the organizational decision to cannibalize an existent business model for a more innovative one. We examined the transition of two enterprise software vendors from on-premise to on-demand software delivery. Relying on a mixed- method research approach, built on the quantitative and qualitative methodologies from the previous case studies, we identified the transition milestones and assessed their impact on financial performances. The cannibalization between on-premise and on-demand is also the scenario for an illustrative simulation study of the cannibalization