Charging Customers or Making Profit? Business Model Change in the Software Industry

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet

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Charging Customers or Making Profit? Business Model Change in the Software Industry. / Malmmose Peyton, Margit; Lueg, Rainer; Khusainova, Sevar et al.
in: Journal of Business Models, Jahrgang 2, Nr. 1, 21.08.2014, S. 19-32.

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet

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Malmmose Peyton M, Lueg R, Khusainova S, Iversen PS, Panti SB. Charging Customers or Making Profit? Business Model Change in the Software Industry. Journal of Business Models. 2014 Aug 21;2(1):19-32. doi: 10.5278/ojs.jbm.v2i1.721

Bibtex

@article{3e8553d4eac645ef93c7a7d5745b6365,
title = "Charging Customers or Making Profit?: Business Model Change in the Software Industry",
abstract = "Purpose: Advancements in technology, changing customer demands or new market entrants are often seen as a necessary condition to trigger the creation of new Business Models, or disruptive change in existing ones. Yet, the sufficient condition is often determined by pricing and how customers are willing to pay for the technology (Chesbrough and Rosenbloom, 2002). As a consequence, much research on Business Models has focused on innovation and technology management (Rajala et al., 2012; Zott et al., 2011), and software-specific frameworks for Business Models have emerged (Popp, 2011; Rajala et al., 2003; Rajala et al., 2004; Stahl, 2004). This paper attempts to illustrate Business Model change in the software industry. Design: Drawing on Rajala et al. (2003), this case study explores the (1) antecedents and (2) consequences of a Business Model-change in a logistics software company. The company decided to abolish their profitable fee-based licensing for an internet-based version of its core product and to offer it as freeware including unlimited service. Findings: Firstly, we illustrate how external developments in technology and customer demands (pricing), as well as the desire for a sustainable Business Model, have led to this drastic change. Secondly, we initially find that much of the company{\textquoteright}s new Business Model is congruent with the company-focused framework of Rajala et al. (2003) [product strategy; distribution model, services and implementation; revenue logic]. Value: The existing frameworks for Business Models in the software industry cannot fully explain the disruptive change in the Business Model. Therefore, we suggest extending the framework by the element of {\textquoteleft}innovation{\textquoteright}.",
keywords = "Management studies, Business Model change, software, innovation, freeware, logistics, lock-in",
author = "{Malmmose Peyton}, Margit and Rainer Lueg and Sevar Khusainova and Iversen, {Patrick S{\o}nderskov} and Panti, {Seth Boampong}",
year = "2014",
month = aug,
day = "21",
doi = "10.5278/ojs.jbm.v2i1.721",
language = "English",
volume = "2",
pages = "19--32",
journal = "Journal of Business Models",
issn = "2246-2465",
publisher = "Aalborg Universit{\"a}tsverlag",
number = "1",

}

RIS

TY - JOUR

T1 - Charging Customers or Making Profit?

T2 - Business Model Change in the Software Industry

AU - Malmmose Peyton, Margit

AU - Lueg, Rainer

AU - Khusainova, Sevar

AU - Iversen, Patrick Sønderskov

AU - Panti, Seth Boampong

PY - 2014/8/21

Y1 - 2014/8/21

N2 - Purpose: Advancements in technology, changing customer demands or new market entrants are often seen as a necessary condition to trigger the creation of new Business Models, or disruptive change in existing ones. Yet, the sufficient condition is often determined by pricing and how customers are willing to pay for the technology (Chesbrough and Rosenbloom, 2002). As a consequence, much research on Business Models has focused on innovation and technology management (Rajala et al., 2012; Zott et al., 2011), and software-specific frameworks for Business Models have emerged (Popp, 2011; Rajala et al., 2003; Rajala et al., 2004; Stahl, 2004). This paper attempts to illustrate Business Model change in the software industry. Design: Drawing on Rajala et al. (2003), this case study explores the (1) antecedents and (2) consequences of a Business Model-change in a logistics software company. The company decided to abolish their profitable fee-based licensing for an internet-based version of its core product and to offer it as freeware including unlimited service. Findings: Firstly, we illustrate how external developments in technology and customer demands (pricing), as well as the desire for a sustainable Business Model, have led to this drastic change. Secondly, we initially find that much of the company’s new Business Model is congruent with the company-focused framework of Rajala et al. (2003) [product strategy; distribution model, services and implementation; revenue logic]. Value: The existing frameworks for Business Models in the software industry cannot fully explain the disruptive change in the Business Model. Therefore, we suggest extending the framework by the element of ‘innovation’.

AB - Purpose: Advancements in technology, changing customer demands or new market entrants are often seen as a necessary condition to trigger the creation of new Business Models, or disruptive change in existing ones. Yet, the sufficient condition is often determined by pricing and how customers are willing to pay for the technology (Chesbrough and Rosenbloom, 2002). As a consequence, much research on Business Models has focused on innovation and technology management (Rajala et al., 2012; Zott et al., 2011), and software-specific frameworks for Business Models have emerged (Popp, 2011; Rajala et al., 2003; Rajala et al., 2004; Stahl, 2004). This paper attempts to illustrate Business Model change in the software industry. Design: Drawing on Rajala et al. (2003), this case study explores the (1) antecedents and (2) consequences of a Business Model-change in a logistics software company. The company decided to abolish their profitable fee-based licensing for an internet-based version of its core product and to offer it as freeware including unlimited service. Findings: Firstly, we illustrate how external developments in technology and customer demands (pricing), as well as the desire for a sustainable Business Model, have led to this drastic change. Secondly, we initially find that much of the company’s new Business Model is congruent with the company-focused framework of Rajala et al. (2003) [product strategy; distribution model, services and implementation; revenue logic]. Value: The existing frameworks for Business Models in the software industry cannot fully explain the disruptive change in the Business Model. Therefore, we suggest extending the framework by the element of ‘innovation’.

KW - Management studies

KW - Business Model change

KW - software

KW - innovation

KW - freeware

KW - logistics

KW - lock-in

U2 - 10.5278/ojs.jbm.v2i1.721

DO - 10.5278/ojs.jbm.v2i1.721

M3 - Journal articles

VL - 2

SP - 19

EP - 32

JO - Journal of Business Models

JF - Journal of Business Models

SN - 2246-2465

IS - 1

ER -

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