The impact of software-as-a-service on business models of leading software vendors : experiences from three exploratory case studies

The number of software vendors offering ‘Software-as-a-Service’ has been increasing in recent years. In the Software-as-a-Service model software is operated by the software vendor and delivered to the customer as a service. Existing business models and industry structures are challenged by the changes to the deployment and pricing model compared to traditional software. However, the full implications on the way companies create, deliver and capture value are not yet sufficiently analyzed. Current research is scattered on specific aspects, only a few studies provide a more holistic view of the impact from a business model perspective. For vendors it is, however, crucial to be aware of the potentially far reaching consequences of Software-as-a-Service. Therefore, a literature review and three exploratory case studies of leading software vendors are used to evaluate possible implications of Software-as-a-Service on business models. The results show an impact on all business model building blocks and highlight in particular the often less articulated impact on key activities, customer relationship and key partnerships for leading software vendors and show related challenges, for example, with regard to the integration of development and operations processes. The observed implications demonstrate the disruptive character of the concept and identify future research requirements.

Small and medium enterprises sourcing software as a service – a dynamic perspective on IS capabilities

Software as a Service (SaaS) is a promising approach for Small and Medium Enterprises (SMEs) firms, in particular those that are focused on growing fast and leveraging new technology, due to the potential benefits arising from its inherent scalability, reduced total cost of ownership and the ease of access to global innovations. This paper proposes a dynamic perspective on IS capabilities to understand and explain SMEs sourcing and levering SaaS. The model is derived from combining the IS capabilities of Feeny and Willcocks (1998) and the dynamic capabilities of Teece (2007) and contextualizing it for SMEs and SaaS. We conclude that SMEs sourcing and leveraging SaaS require leadership, business systems thinking and informed buying for sensing and seizing SaaS opportunities and require leadership and vendor development for transforming in terms of aligning and realigning specific tangible and intangible assets.

Software as a service (SaaS) for small and medium enterprises (SMEs) : the role of intermediaries

Software as a Service (SaaS) is anticipated to provide significant benefits to small and medium enterprises (SMEs) due to ease of access to high-end applications, 7*24 availability, utility pricing, etc. However, underlying SaaS is the assumption that SMEs will directly interact with the SaaS vendor and use a self-service model. In practice, we see the rise of SaaS intermediaries who support SMEs with using SaaS. This paper reports on an empirical study of the role of intermediaries in terms of how they support SMEs in sourcing and leveraging SaaS for their business. The knowledge contributions of this paper are: (1) the identification and description of the role of SaaS intermediaries and (2) the specification of different roles of SaaS intermediaries, in particular a more basic role with technology orientation and operational alignment perspective and (3) a more added value role with customer orientation and strategic alignment perspective.

Small and medium enterprises using software as a service : exploring the different roles of intermediaries

Software as a Service (SaaS) can provide significant benefits to small and medium enterprises (SMEs) due to advantages like ease of access, 7*24 availability, and utility pricing. However, underlying the SaaS delivery model is often the assumption that SMEs will directly interact with the SaaS vendor and use a self-service approach. In practice, we see the rise of SaaS intermediaries who can support SMEs with sourcing and leveraging SaaS. This paper reports on the roles of intermediaries and how they support SMEs with using SaaS. We conducted an empirical study of two SaaS intermediaries and analysed their business models, in particular their value propositions. We identified orientation (technology or customer) and alignment (operational or strategic) as themes for understanding their roles. The contributions of this paper include: (1) the identification and description of SaaS intermediaries for SMEs based on an empirical study and (2) understanding the different roles of SaaS intermediaries, in particular a more basic role based on technology orientation and operational alignment and a more value adding role based on customer orientation and strategic alignment. We propose that SaaS intermediaries can address SaaS adoption and implementation challenges of SMEs by playing a basic role and can also aim to support SMEs in creating business value with SaaS based solutions by playing an added value role.

Leveraging of software as a service by small and medium enterprises: Information systems capabilities and organisational complementarities

This research explored how small and medium enterprises can achieve success with software as a service (SaaS) applications from cloud. Based upon an empirical investigation of six growth oriented and early technology adopting small and medium enterprises, this study proposes a SaaS for small and medium enterprise success model with two approaches: one for basic and one for advanced benefits. The basic model explains the effective use of SaaS for achieving informational and transactional benefits. The advanced model explains the enhanced use of software as a service for achieving strategic and transformational benefits. Both models explicate the information systems capabilities and organizational complementarities needed for achieving success with SaaS.

Identification and specification of relationships as the foundation for service bundling

Service bundling can be regarded as an option for service providers to strengthen their competitive advantages, cope with dynamic market conditions and heterogeneous consumer demand. Despite these positive effects, actual guidance for the identification of service bundles and the act of bundling itself can be regarded as a gap. Previous research has resulted in a conceptualization of a service bundling method relying on a structured service description in order to fill this gap. This method addresses the reasoning about the suitability of services to be part of a bundle based on analyzing existing relationships between services captured by a description language. This paper extends the aforementioned research by presenting an initial set of empirically derived relationships between services in existing bundles that can subsequently be utilized to identify potential new bundles. Additionally, a gap analysis points out to what extent prominent ontologies and service description languages accommodate for the identified relationships.

Analyzing requirements and approaches for sourcing software based services

Increasingly, software is no longer developed as a single system, but rather as a smart combination of so-called software services. Each of these provides an independent, specific and relatively small piece of functionality, which is typically accessible through the Internet from internal or external service providers. To the best of our knowledge, there are no standards or models that describe the sourcing process of these software based services (SBS). We identify the sourcing requirements for SBS and associate the key characteristics of SBS (with the sourcing requirements introduced). Furthermore, we investigate the sourcing of SBS with the related works in the field of classical procurement, business process outsourcing, and information systems sourcing. Based on the analysis, we conclude that the direct adoption of these approaches for SBS is not feasible and new approaches are required for sourcing SBS.

Analyzing requirements and approaches for sourcing software based services

Increasingly, software is no longer developed as a single system, but rather as a smart combination of so-called software services. Each of these provides an independent, specific and relatively small piece of functionality, which is typically accessible through the Internet from internal or external service providers. There are no standards or models that describe the sourcing process of these software based services (SBS). The authors identify the sourcing requirements for SBS and associate the key characteristics of SBS (with the sourcing requirements introduced). Furthermore, this paper investigates the sourcing of SBS with the related works in the field of classical procurement, business process outsourcing, and information systems sourcing. Based on the analysis, the authors conclude that the direct adoption of these approaches for SBS is not feasible and new approaches are required for sourcing SBS.

Service delivery framework : an architectural strategy for next-generation service delivery in business network

The next-generation of service-oriented architecture (SOA) needs to scale for flexible service consumption, beyond organizational and application boundaries, into communities, ecosystems and business networks. In wider and, ultimately, global settings, new capabilities are needed so that business partners can efficiently and reliably enable, adapt and expose services. Those services can then be discovered, ordered, consumed, metered and paid for, through new applications and opportunities, driven by third-parties in the global “village”. This trend is already underway, in different ways, through different early adopter market segments. This paper proposes an architectural strategy for the provisioning and delivery of services in communities, ecosystems and business networks – a Service Delivery Framework (SDF). The SDF is intended to support multiple industries and deployments where a SOA platform is needed for collaborating partners and diverse consumers. Specifically, it is envisaged that the SDF allows providers to publish their services into network directories so that they can be repurposed, traded and consumed, and leveraging network utilities like B2B gateways and cloud hosting. To support these different facets of service delivery, the SDF extends the conventional service provider, service broker and service consumer of the Web Services Architecture to include service gateway, service hoster, service aggregator and service channel maker.

Semantic service discovery in the service ecosystem

Electronic services are a leitmotif in ‘hot’ topics like Software as a Service, Service Oriented Architecture (SOA), Service oriented Computing, Cloud Computing, application markets and smart devices. We propose to consider these in what has been termed the Service Ecosystem (SES). The SES encompasses all levels of electronic services and their interaction, with human consumption and initiation on its periphery in much the same way the ‘Web’ describes a plethora of technologies that eventuate to connect information and expose it to humans. Presently, the SES is heterogeneous, fragmented and confined to semi-closed systems. A key issue hampering the emergence of an integrated SES is Service Discovery (SD). A SES will be dynamic with areas of structured and unstructured information within which service providers and ‘lay’ human consumers interact; until now the two are disjointed, e.g., SOA-enabled organisations, industries and domains are choreographed by domain experts or ‘hard-wired’ to smart device application markets and web applications. In a SES, services are accessible, comparable and exchangeable to human consumers closing the gap to the providers. This requires a new SD with which humans can discover services transparently and effectively without special knowledge or training. We propose two modes of discovery, directed search following an agenda and explorative search, which speculatively expands knowledge of an area of interest by means of categories. Inspired by conceptual space theory from cognitive science, we propose to implement the modes of discovery using concepts to map a lay consumer’s service need to terminologically sophisticated descriptions of services. To this end, we reframe SD as an information retrieval task on the information attached to services, such as, descriptions, reviews, documentation and web sites - the Service Information Shadow. The Semantic Space model transforms the shadow's unstructured semantic information into a geometric, concept-like representation. We introduce an improved and extended Semantic Space including categorization calling it the Semantic Service Discovery model. We evaluate our model with a highly relevant, service related corpus simulating a Service Information Shadow including manually constructed complex service agendas, as well as manual groupings of services. We compare our model against state-of-the-art information retrieval systems and clustering algorithms. By means of an extensive series of empirical evaluations, we establish optimal parameter settings for the semantic space model. The evaluations demonstrate the model’s effectiveness for SD in terms of retrieval precision over state-of-the-art information retrieval models (directed search) and the meaningful, automatic categorization of service related information, which shows potential to form the basis of a useful, cognitively motivated map of the SES for exploratory search.

Using Wikipedia to improve web service discovery

Building and maintaining software are not easy tasks. However, thanks to advances in web technologies, a new paradigm is emerging in software development. The Service Oriented Architecture (SOA) is a relatively new approach that helps bridge the gap between business and IT and also helps systems remain exible. However, there are still several challenges with SOA. As the number of available services grows, developers are faced with the problem of discovering the services they need. Public service repositories such as Programmable Web provide only limited search capabilities. Several mechanisms have been proposed to improve web service discovery by using semantics. However, most of these require manually tagging the services with concepts in an ontology. Adding semantic annotations is a non-trivial process that requires a certain skill-set from the annotator and also the availability of domain ontologies that include the concepts related to the topics of the service. These issues have prevented these mechanisms becoming widespread. This thesis focuses on two main problems. First, to avoid the overhead of manually adding semantics to web services, several automatic methods to include semantics in the discovery process are explored. Although experimentation with some of these strategies has been conducted in the past, the results reported in the literature are mixed. Second, Wikipedia is explored as a general-purpose ontology. The benefit of using it as an ontology is assessed by comparing these semantics-based methods to classic term-based information retrieval approaches. The contribution of this research is significant because, to the best of our knowledge, a comprehensive analysis of the impact of using Wikipedia as a source of semantics in web service discovery does not exist. The main output of this research is a web service discovery engine that implements these methods and a comprehensive analysis of the benefits and trade-offs of these semantics-based discovery approaches.

Refactoring Service Interface to Support Artefact-centric Service interaction

The growth of APIs and Web services on the Internet, especially through larger enterprise systems increasingly being leveraged for Cloud and software-as-a-service opportunities, poses challenges for improving the efficiency of integration with these services. Interfaces of enterprise systems are typically larger, more complex and overloaded, with single operations having multiple data entities and parameter sets, supporting varying requests, and reflecting versioning across different system releases, compared to fine-grained operations of contemporary interfaces. We propose a technique to support the refactoring of service interfaces by deriving business entities and their relationships. In this paper, we focus on the behavioural aspects of service interfaces, aiming to discover the sequential dependencies of operations (otherwise known as protocol extraction) based on the entities and relationships derived. Specifically, we propose heuristics according to these relationships, and in turn, deriving permissible orders in which operations are invoked. As a result of this, service operations can be refactored on business entity CRUD lines, with explicit behavioural protocols as part of an interface definition. This supports flexible service discovery, composition and integration. A prototypical implementation and analysis of existing Web services, including those of commercial logistic systems (Fedex), are used to validate the algorithms proposed through the paper.

A penalty-based genetic algorithm for the composite SaaS placement problem in the cloud

Cloud computing is a latest new computing paradigm where applications, data and IT services are provided over the Internet. Cloud computing has become a main medium for Software as a Service (SaaS) providers to host their SaaS as it can provide the scalability a SaaS requires. The challenges in the composite SaaS placement process rely on several factors including the large size of the Cloud network, SaaS competing resource requirements, SaaS interactions between its components and SaaS interactions with its data components. However, existing applications’ placement methods in data centres are not concerned with the placement of the component’s data. In addition, a Cloud network is much larger than data center networks that have been discussed in existing studies. This paper proposes a penalty-based genetic algorithm (GA) to the composite SaaS placement problem in the Cloud. We believe this is the first attempt to the SaaS placement with its data in Cloud provider’s servers. Experimental results demonstrate the feasibility and the scalability of the GA.

A cooperative coevolutionary algorithm for the composite SaaS Placement Problem in the Cloud

Cloud computing has become a main medium for Software as a Service (SaaS) hosting as it can provide the scalability a SaaS requires. One of the challenges in hosting the SaaS is the placement process where the placement has to consider SaaS interactions between its components and SaaS interactions with its data components. A previous research has tackled this problem using a classical genetic algorithm (GA) approach. This paper proposes a cooperative coevolutionary algorithm (CCEA) approach. The CCEA has been implemented and evaluated and the result has shown that the CCEA has produced higher quality solutions compared to the GA.

APROMORE : an advanced process model repository

Business process models are becoming available in large numbers due to their popular use in many industrial applications such as enterprise and quality engineering projects. On the one hand, this raises a challenge as to their proper management: How can it be ensured that the proper process model is always available to the interested stakeholder? On the other hand, the richness of a large set of process models also offers opportunities, for example with respect to the re-use of existing model parts for new models. This paper describes the functionalities and architecture of an advanced process model repository, named APROMORE. This tool brings together a rich set of features for the analysis, management and usage of large sets of process models, drawing from state-of-the art research in the field of process modeling. A prototype of the platform is presented in this paper, demonstrating its feasibility, as well as an outlook on the further development of APROMORE.