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

Journal article
Authors Johan Magnusson
Gustaf Juell-Skielse
Håkan Enquist
Elin Uppström
Published in Journal of Service Science and Management
Volume 5
Issue 1
ISSN 1940-9893
Publication year 2012
Published at Centre for Business Solutions (CFA)
Department of Business Administration
Department of Business Administration, Accounting
Department of Applied Information Technology (GU)
Language en
Keywords Business Models, Institutional logic, dominating logic, Enterprise Resource Planning, Software as a Service
Subject categories Media and Communication Technology, Business Administration


With a shift in architecture for information systems (IS) design and delivery, 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 according to a business model dominated by services rather than on-premise installations. This paper reports from a research project conducted between 2009 and 2011, involving case studies of Enterprise Resource Planning (ERP) systems delivered according to a Software as a Service (SaaS) logic. A total of 21 cases involving 20 actors on the ERP market were conducted and analyzed through business model ontology. After constructing generic business models to explain two different types of vendors found in the market (the incumbent (traditional ERP vendor) and the challenger (new, solely SaaS ERP vendor)), a discussion based on institutional logic examines how the vendors adopt to dominating institutional logic. As the results show, both types of vendors can be seen as legitimating elements of their business models through the other party’s institutional logic, while at the same time differentiating itself in trying to establish their own logic as dominating in the field.

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