Business Models in the Software Industry

Business models describe the strategic direction of a firm and have significant impact on the success of innovations. While the term business model is broadly used, a comprehensive definition in the context of the software industry has not yet been provided. In this paper, we conceptualize a software industry business model, supporting the description of software firms' business models in a standardized manner. Our model aggregates and unifies findings from a literature review in three disciplines, generic and software industry specific business model concepts as well as economic properties of the software industry. The resulting business model concept comprises 20 elements. A first empirical proof of concept among 10 software business models confirms the applicability of the presented concept. The business models are instantiated based on the proposed framework and the interviewees confirm the applicability, relevance, and importance of the proposed business model.

[1]  Sebastian von Engelhardt,et al.  The Economic Properties of Software , 2008 .

[2]  J. Steenkamp,et al.  Make, buy, or ally: A transaction cost theory meta-analysis , 2006 .

[3]  Peter Buxmann,et al.  The Software Industry: Economic Principles, Strategies, Perspectives , 2012 .

[4]  Mikko Rönkkö,et al.  Diversity of Business Models in Software Industry , 2010, ICSOB.

[5]  Björn Niehaves,et al.  Reconstructing the giant: On the importance of rigour in documenting the literature search process , 2009, ECIS.

[6]  Michael A. Rappa,et al.  The utility business model and the future of computing services , 2004, IBM Syst. J..

[7]  Des Greer,et al.  Software release planning: an evolutionary and iterative approach , 2004, Inf. Softw. Technol..

[8]  Alexander Osterwalder,et al.  The business model ontology a proposition in a design science approach , 2004 .

[9]  T. Kakola,et al.  Software business models and contexts for software innovation: key areas software business research , 2003, 36th Annual Hawaii International Conference on System Sciences, 2003. Proceedings of the.

[10]  Jaap Gordijn,et al.  Designing and evaluating e-business models , 2001 .

[11]  Richard K. Lai,et al.  Do Some Business Models Perform Better than Others , 2006 .

[12]  Clayton M. Christensen,et al.  Reinventing Your Business Model , 2008 .

[13]  Jarno Vähäniitty,et al.  Key Decisions in Strategic New Product Development for Small Software Product Businesses , 2003, EUROMICRO.

[14]  Peter Loos,et al.  Analyzing the Business Model Concept - A Comprehensive Classification of Literature , 2011, ICIS.

[15]  R. Rajala.  Determinants of business model performance in software firms , 2009 .

[16]  Peter Buxmann,et al.  Pricing Strategies of Software Vendors , 2009, Bus. Inf. Syst. Eng..

[17]  Karl Michael Popp,et al.  Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry , 2010 .

[18]  Matthew S. Olson,et al.  Cuando el crecimiento se estanca , 2008 .

[19]  Michael H. Morris,et al.  The entrepreneur's business model: toward a unified perspective , 2005 .

[20]  David G. Messerschmitt,et al.  Software Ecosystem: Understanding an Indispensable Technology and Industry , 2003 .

[21]  Markus Schief,et al.  The Software Value Chain as an Analytical Framework for the Software Industry and Its Exemplary Application for Vertical Integration Measurement , 2011, AMCIS.

[22]  M. Westerlund,et al.  Business Models – A New Perspective on Firms' Assets and Capabilities , 2007 .

[23]  R. Amit,et al.  Value creation in E‐business , 2001 .

[24]  Bala Iyer,et al.  Analyzing Complementarities Using Software Stacks for Software Industry Acquisitions , 2006, J. Manag. Inf. Syst..

[25]  Kuldeep Kumar,et al.  User cube: a taxonomy of end users , 1989, CACM.

[26]  Brian J. Reithel,et al.  Beyond the information center: An instrument to measure end-user computing support from multiple sources , 1998, Inf. Manag..

[27]  Risto Rajala,et al.  A framework for analyzing software business models , 2003, ECIS.

[28]  Jyrki Kontio,et al.  Current practices and research opportunities in software business models , 2005, ACM SIGSOFT Softw. Eng. Notes.

[29]  Timothy Lethbridge,et al.  A taxonomy of software types to facilitate search and evidence-based software engineering , 2008, CASCON '08.