Why license when you can rent? Risks and rewards of the application service provider model

ABSTRACT

The confluence of several developments in technology and trends in the business environment has led to the emergence of new outsourcing model, the Application Service Provider (ASP). In this paper we draw upon outsourcing literature to understand the factors that are likely to influence the adoption of the ASP model. An initial research model is developed based on factors identified from economic and social perspectives used in outsourcing literature.

REFERENCES

• 1: ASP Industry Consortium. Http://www.aspindustry.org/faqa.cfm.
• 2: Bakos, J.Y. and Brynjolfsson, E. Information Technology, Incentives and Optimal Number of Suppliers. Journal of Management Information Systems, 10,2 (1993)137-53.
• 3: Barney, J. Firm Resources and Sustained Competitive Advantage, Journal of Management, 17, 1(1991), 99- 120.
• 4: Beccerra, M. and Gupta, A. K. Trust within the organization: Integrating the trust literature with agency theory and transaction costs economics. Public Administration Quarterly; 23, 2(Summer 1999),177- 203.
• 5: Blau, Peter M. Exchange and Power in Social Life. John Wiley and Sons, New York, NY, 1964.
• 6: Bradford, J. C. and Co. The Application Service Provider: The Net's Next Killer Application. www.aspisland.com/trends/}cbradlbrd/1 .asp.
• 7: Erik Brynjolfsson, Information assets, technology, and organization, Management Science, v.40 n.12, p.1645-1662, Dec. 1994 [doi>10.1287/mnsc.40.12.1645]
• 8: Caton, M. Don't Let ASP Attrition Sack Your Company, www.zdnet.com/eweek/stories/general/
• 9: Cherry Tree & Company. IT Services and Spotlight Reports. www.cherrytree.com,
• 10: DiMaggio, P.J. and Powell, W. W. The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields, American Sociological Review, 48 (1983), 147-160.
• 11: Emerson, R. M. Power Dependence Relations, American Sociological Review, 27(1962), 31-41.
• 12: Forrester Research. Packaged Applications Outsourcing, quoted in Futurelink: Building the Information Utility, www.futurelink.net, by Phil Wainewright, published by ASP News Review.
• 13: Vijay Gurbaxani , Seungjin Whang, The impact of information systems on organizations and markets, Communications of the ACM, v.34 n.1, p.59-73, Jan. 1991 [doi>10.1145/99977.99990]
• 14: Hallen, L., Johanson, J. and Seyed-Mohamed, N. Interfirm Adaptation in Business Relationships, Journal of Marketing, (April 1991), 29-37.
• 15: Mary Celia Lacity , Rudy A. Hirschheim, Information Systems Outsourcing; Myths, Metaphors, and Realities, John Wiley & Sons, Inc., New York, NY, 1993
• 16: Lacity, M. C., Willcocks, L. P., Feeny, D. F. The Value of Selective IT Sourcing, Sloan Management Review, 37, 3(1996),13-31.
• 17: Kichan Nam , S. Rajagopalan , H. Raghav Rao , A. Chaudhury, A two-level investigation of information systems outsourcing, Communications of the ACM, v.39 n.7, p.36-44, July 1996 [doi>10.1145/233977.233989]
• 18: Oliver, C. Strategic Responses to Institutional Processes, Academy of Management Review, 16,1, (1991), 145-179.
• 19: Richmond, W. B. and Seidmann, A. Software Development Outsourcing Contract Structure and Business Value, Journal of Management Information Systems, 10, 1(1993),57-72.
• 20: Saarinen,T and Veps~il~iinen, A. P. J. Procurement Strategies for Information Systems, Journal of Management Information Systems, 11, 2,(1994),187- 208.
• 21: Sweeney, P.CRM Application Service Providers: Risks and Rewards, www.sweeneygroup.com/whitepaper/
• 22: Wainewright, P. Futurelink: Building the Information Utility, www.futurelink.net, ASP Case studies, (May 1999) published by ASP News Review.
• 23: Yu, M. The ASP Market is Growing Up, Executive Briefing, June 8 2000, www.mainspring.com/analysis

INDEX TERMS

Primary Classification:
  K. Computing Milieux
  K.4 COMPUTERS AND SOCIETY

General Terms:
Documentation, Management

Keywords:
IS management, application service providers, diffusion of adoption, outsourcing