A Transaction Cost Perspective of the Software as a Service Business Model

• 成果类型: Article
• 署名作者: Susarla, Anjana; Barua, Anitesh; Whinston, Andrew B.
• 署名单位: University of Washington; University of Washington Seattle; University of Texas System; University of Texas Austin; University of Texas System; University of Texas Austin
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.2753/MIS0742-1222260209
• 发表日期: 2009
• 页码: 205-240
• 关键词: or-buy decisions; vertical integration; Contract design; performance; governance; firm; environment; REMEDIES; outcomes; matter

摘要

Application service providers (ASP), which host and maintain information technology (IT) applications across the Internet, offer in alternative to traditional models 4 IT service for user firms. We build oil prior literature in transaction cost economics (TCE) to argue that the contract design should address ex post transaction costs that result due to contractual incompleteness and opportunism. We argue that contract design is multidimensional, and that it is necessary to design governance structures that Call protect user firms from shirking and monitoring costs, as well as provide for efficient adaptation when requirements are incompletely specified at the start. of the initiative. Our empirical analysis suggests that factors such as uncertainty in specifying service requirements, interdependence between the ASP application and IT systems in the client organization, and the need for specific investments favor time and materials contracts, whereas fixed prices are desirable when strong incentives are needed for cost reduction. We also find that contracts that are aligned with transaction attributes in a transaction cost-economizing manner are significantly less likely to experience budget overruns and realize better ex post performance than those that are not. These, results hold normative implications for both user and provider firms to assess the performance implications of choosing contracts in line with prescriptions of TCE.