Abstract

The proliferation of the software as a service (SaaS) model challenges our understanding of trust formation in the external software acquisition. In the SaaS model vital software applications are often sourced over the internet with very limited personal interaction between representatives of user and provider. The present research seeks to explore how the subscribers of software services develop the necessary trust that facilitates their decision to use these external software services. In order to investigate the initial trust formation in a SaaS context the study draws on data from ten UK-based SME’s that have recently subscribed to SaaS services. Findings reveal an interesting confluence of factors that contribute to the trust formation and include aspects of provider size, reputation and functionalities. These findings create a range of theoretical and managerial implications.

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