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      From On-Premise Software to Cloud Services: The Impact of Cloud Computing on Enterprise Software Vendors' Business Models

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          Abstract

          Cloud computing is an emerging paradigm that allows users to conveniently access computing resources as pay-per-use services. Whereas cloud offerings such as Amazon’s Elastic Compute Cloud and Google Apps are rapidly gaining a large user base, enterprise software’s migration towards the cloud is still in its infancy. For software vendors the move towardscloud solutions implies profound changes in their value-creation logic. Not only are they forced to deliver fully web-enabled solutions and to replace their license model with service fees, they also need to build the competencies to host and manage business-critical applications for their customers. This motivates our research, which investigates cloud computing’s implications for enterprise software vendors’ business models. From multiple case studies covering traditional and pure cloud providers, we find that moving from on-premise software to cloud services affects all business model components, that is, the customer value proposition, resource base, value configuration, and financial flows. It thus underpins cloud computing’s disruptive nature in the enterprise software domain. By deriving two alternative business model configurations, SaaS and SaaS+PaaS, our research synthesizes the strategic choices for enterprise software vendors and provides guidelines for designing viable business models.

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          A view of cloud computing

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            Cloud computing and emerging IT platforms: Vision, hype, and reality for delivering computing as the 5th utility

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              The Case Research Strategy in Studies of Information Systems

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                Author and article information

                Journal
                jtaer
                Journal of theoretical and applied electronic commerce research
                J. theor. appl. electron. commer. res.
                Universidad de Talca (Talca, , Chile )
                0718-1876
                December 2013
                : 8
                : 3
                : 39-58
                Affiliations
                [01] Lausanne orgnameUniversity of Lausanne orgdiv1Faculty of Business and Economics Switzerland thomas.boillat@ 123456unil.ch
                Article
                S0718-18762013000300004 S0718-1876(13)00800300004
                10.4067/S0718-18762013000300004
                cbd3e048-b7be-43f4-b1b9-dff5f7c3c89d

                This work is licensed under a Creative Commons Attribution 4.0 International License.

                History
                : 15 August 2013
                : 08 April 2013
                : 22 August 2013
                Page count
                Figures: 0, Tables: 0, Equations: 0, References: 52, Pages: 20
                Product

                SciELO Chile

                Self URI: Full text available only in PDF format (EN)
                Categories
                Research

                Revenue model,Customer relationship management (CRM),Enterprise resource planning (ERP),Enterprise systems,business model,Platform-as-a-Service (PaaS),Software-as-a-Service (SaaS),Cloud computing

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