Drivers of SaaS-Adoption – An Empirical Study of Different Application Types

Software-as-a-Service (SaaS) is said to become an important cornerstone of the Internet of Services. However, while some market research and IT provider firms fervently support this point of view, others already conjure up the failure of this on-demand sourcing option. Oftentimes based on weak empirical data and shaky reasoning, these inconsistent perspectives lack scientific rigor and neglect to present a more differentiated picture of SaaS-adoption. This study seeks to deepen the understanding of factors driving the adoption of Software-as-a-Service (SaaS). Grounded in transaction cost theory, the resource-based view, and the theory of planned behavior, we develop a research model to assess SaaS-adoption at the application level. Survey data of 297 firms in Germany with 374 valid response items across different industries were collected to test the theoretical model. Our analysis revealed that patterns on the decision on SaaS-adoption differ across application types. Social influence, attitude toward SaaS-adoption, adoption uncertainty, and strategic value turned out to be the strongest and most consistent drivers across all application types. Furthermore, we found that firm size does not matter in SaaS-adoption, since large enterprises and small- and medium-sized companies had similar adoption rates. Overall, this study provides relevant findings that IT vendors can use to better appeal to potential companies that consider adopting SaaS.

[1]  Wynne W. Chin,et al.  Structural equation modeling analysis with small samples using partial least squares , 1999 .

[2]  Eric K. Clemons,et al.  Sustaining IT Advantage: The Role of Structural Differences , 1991, MIS Q..

[3]  Qingxiong Ma,et al.  An exploratory study into factors of service quality for application service providers , 2005, Inf. Manag..

[4]  Bandula Jayatilaka,et al.  Information systems outsourcing: a survey and analysis of the literature , 2004, DATB.

[5]  I. Ajzen,et al.  Understanding Attitudes and Predicting Social Behavior , 1980 .

[6]  Rajiv Kishore,et al.  Impact of ASP Capabilities on Application Service Quality , 2001 .

[7]  William G. Ouchi,et al.  Markets, Bureaucracies, and Clans. , 1980 .

[8]  Bret Waters,et al.  Software as a service: A look at the customer benefits , 2005 .

[9]  Markus Nüttgens,et al.  Geschäftsmodelle für dienstebasierte Informationssysteme , 2008 .

[10]  Gautam Mitra,et al.  The evolution of web-based optimisation: From ASP to e-Services , 2007, Decis. Support Syst..

[11]  O. Williamson.  The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting , 1985 .

[12]  Andrew B. Whinston,et al.  Global software piracy revisited , 2004, CACM.

[13]  Jens Dibbern.  The sourcing of application software services: empirical evidence of cultural, industry and functional differences: with 27 tables , 2004 .

[14]  Detmar W. Straub,et al.  Validating Instruments in MIS Research , 1989, MIS Q..

[15]  Daniel Beimborn,et al.  Determinants of IT Outsourcing Relationships: A Conceptual Model , 2008, Proceedings of the 41st Annual Hawaii International Conference on System Sciences (HICSS 2008).

[16]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[17]  Ram L. Kumar,et al.  A theory of application service provider (ASP) use from a client perspective , 2004, Inf. Manag..

[18]  I. Ajzen.  The theory of planned behavior , 1991 .

[19]  Alexander Benlian,et al.  A transaction cost theoretical analysis of software-as-a-service (SAAS)-based sourcing in SMBs and enterprises , 2009, ECIS.

[20]  Jan-Bernd Lohmöller,et al.  Latent Variable Path Modeling with Partial Least Squares , 1989 .

[21]  Kenneth R. Walsh,et al.  Analyzing the application ASP concept: technologies, economies, and strategies , 2003, CACM.

[22]  Pearl Brereton.  The software customer/supplier relationship , 2004, CACM.

[23]  N. Venkatraman,et al.  An Empirical Study of Information Technology Outsourcing: Benefits, Risks, and Performance Implications , 1995, ICIS.

[24]  H. Raghav Rao,et al.  A two-level investigation of information systems outsourcing , 1996, CACM.

[25]  Detmar W. Straub,et al.  Measuring System Usage: Implications for IS Theory Testing , 1995 .

[26]  Fred D. Davis.  Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology , 1989, MIS Q..

[27]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[28]  Jens Dibbern,et al.  The Sourcing of Application Software Services , 2004 .

[29]  Paul J. Layzell,et al.  Negotiating in service-oriented environments , 2004, CACM.

[30]  Margaret A. Peteraf.  The cornerstones of competitive advantage: A resource‐based view , 1993 .

[31]  O. Williamson.  Comparative Economic Organization: The Analysis of Discrete Structural Alternatives , 1994 .

[32]  Thomas Deelmann.  Bodendorf, F.Daten- und Wissensmanagement , 2007 .

[33]  Douglas C. Schmidt,et al.  Software patterns , 1996, CACM.

[34]  Thomas Hess,et al.  Welche Treiber lassen SaaS auch in Großunternehmen zum Erfolg werden? Eine empirische Analyse der SaaS-Adoption auf Basis der Transaktionskostentheorie , 2009, Wirtschaftsinformatik.

[35]  Abhijit Chaudhury,et al.  Using choiceboards to create business value , 2004, CACM.

[36]  V. Grover,et al.  Decisions to Outsource Information Systems Functions: Testing a Strategy‐Theoretic Discrepancy Model , 1995 .

[37]  Leslie P. Willcocks,et al.  Exploring ASP as sourcing strategy: theoretical perspectives, propositions for practice , 2002, J. Strateg. Inf. Syst..

[38]  Suzanne Rivard,et al.  A transaction cost model of IT outsourcing , 2004, Inf. Manag..

[39]  Lawrence Loh,et al.  An Organizational-Economic Blueprint for Information Technology Outsourcing: Concepts and Evidence , 1994, ICIS.

[40]  R. Hirschheim,et al.  Beyond The Information Systems Outsourcing Bandwagon: The Insourcing Response , 1995 .

[41]  A. Picot,et al.  Organisation: eine ökonomische Perspektive , 1998 .

[42]  Markus Nüttgens,et al.  Geschäftsmodelle für dienstebasierte Informations- systeme - Ein strategischer Ansatz zur Vermarktung , 2008 .

[43]  Thomas Hess,et al.  Software as a Service , 2008, Wirtschaftsinf..

[44]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[45]  Matthias Knoll.  Kneuper, R.CMMI , 2007 .

[46]  E. Rogers.  Diffusion of Innovations , 1962 .

[47]  M. Porter,et al.  How Information Gives You Competitive Advantage , 1985 .

[48]  José L. Gascó,et al.  Information systems outsourcing: A literature analysis , 2006, Inf. Manag..

[49]  Vidyanand Choudhary,et al.  Comparison of Software Quality Under Perpetual Licensing and Software as a Service , 2007, J. Manag. Inf. Syst..

[50]  E. Penrose.  The theory of the growth of the firm twenty-five years after , 1960 .

[51]  Wynne W. Chin,et al.  The Impact of Human Asset Specificity on the Sourcing of Application Services , 2005, ECIS.

[52]  Rolph E. Anderson,et al.  Multivariate Data Analysis with Readings , 1979 .

[53]  Wendy L. Currie,et al.  Evaluating the application service provider (ASP) business model: the challenge of integration , 2002, Proceedings of the 35th Annual Hawaii International Conference on System Sciences.

[54]  Jen-Yao Chung,et al.  Web services computing: advancing software interoperability , 2003, Computer.

[55]  R. Coase.  The Nature of the Firm , 1937 .

[56]  Richard P. Bagozzi,et al.  Assessing Construct Validity in Organizational Research , 1991 .

[57]  Vallabh Sambamurthy,et al.  Editorial Notes - The Growth of Interest in Services Management: Opportunities for Information Systems Scholars , 2006, Inf. Syst. Res..

[58]  L. Willcocks,et al.  Netsourcing: Renting Business Applications and Services Over a Network , 2002 .

[59]  Alea M. Fairchild,et al.  Adoption trends in application service provisioning: an exploratory field study of small and medium-size enterprises , 2003, ECIS.

[60]  Rüdiger Eichin,et al.  SAP Business ByDesign , 2008 .