Abstract

The software markets are moving from product-based business towards more service-oriented business. System Integrators (SIs) have also noted the service component's increase in their customer cases and are placing more resources in their own service development. This study is focused on the SIs and the objective of this paper is to study how the integrators can use the Software as a Service (SaaS) business model in order to provide online services successfully to their customers and how they can take advantage of the associated benefits while overcoming the challenges. To providers, SaaS offers e.g. scale economies in distribution and administration costs, expansion of the potential customer base, and recurring revenue. From the customer viewpoint, SaaS services e.g. enable them to focus on their core competencies, provide easier access to technical expertise, and offer economical access to valuable software applications independent of time and location. We conducted a case study of six integrators and our findings confirm that the SIs are getting better in taking advantage of the SaaS model’s benefits, i.e. they are achieving scale and scope economies, have shortened their sales cycle, and expanded their potential customer base. The SIs are also solving or downplaying the associated challenges e.g. by placing more emphasis on scalability and customisation capabilities, and partner management.

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