Incumbents and Challengers: Conflicting Institutional Logics in SaaS ERP Business Models

Johan Magnusson, Håkan Enquist, Gustaf Juell-Skielse, Elin Uppström

Center for Service Science and Innovation, Department of Computer and System Sciences, Stockholm University, Stockholm, Sweden.
Department of Applied IT, University of Gothenburg, Gothenburg, Sweden.
Department of Business Administration, University of Gothenburg, Gothenburg, Sweden.

DOI: 10.4236/jssm.2012.51009                

Abstract

With a shift in the architecture for the design and delivery of information systems (IS), new business models are emerging. Professional analysts predict that by the end of 2012, a majority of all enterprise-wide information systems will be delivered by a business model dominated by services rather than by on-site installations. This paper reports on a research project conducted between 2009 and 2011 that involved case studies of Enterprise Resource Planning (ERP) systems delivered according to a Software as a Service (SaaS) logic. Using a business model ontology, 10 case studies in the Swedish ERP market were conducted and analyzed. After constructing generic business models that explain two types of vendors in the market—the Incumbents (the traditional ERP vendors) and the Challengers (the new SaaS ERP vendors)—a discussion follows, based on institutional logic, which examines how these two groups of vendors adapt the dominant institutional logic. As the results show, both vendor groups hybridize their business models using the other’s institutional logic. At the same time, the vendors differentiate themselves as they try to establish the dominance of their own logic.

Keywords

Business Models; Institutional Logic; Dominant Logic; Enterprise Resource Planning; Software as a Service

Conflicts of Interest

The authors declare no conflicts of interest.

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