Title: Optimal Enterprise Software Licensing Model: On-Premises or Software as a Service?
Speaker: Dr. Li Shengli, Department of Information Systems and Operations Management, University of Florida
Time: Mar. 8 2013 at 10:00am—11:30am
Location: Room 216, School of Management
Abstract:
We study two prominent enterprise software licensing models, On-Premises and Software as a Service (SaaS), in the presence of consumers’ uncertainty about the future software quality. We find that SaaS is the optimal licensing model when the consumers’ belief in the future software quality is high. However, On-Premises licensing generates higher profit for the firm when the consumers’ belief in the future software quality is low. Further, our research uncovers that the SaaS licensing has an advantage comparing to On-Premises when the upgrade cost is increasing, due to its “multi-tenancy” feature. Finally, we analyze the impacts of network effects and find that SaaS is preferable when strong network effects present.
Shengli Li is a Ph.D. candidate in the Department of Information Systems and Operations Management at University of Florida. His research interests include economics of information systems, software firm strategies, electronic commerce, and social networking sites analysis. His work has been published or accepted in journals such as Decision Support Systems (DSS). Several of his work has been presented at conferences including INFORMS and Workshop on e-Business (WEB). He has served as reviewer for journal and conferences including Information Systems Research (ISR), International Conference on Information Systems (ICIS), Conference on Information Systems and Technology (CIST), Workshop on Information Technologies and System (WITS), Workshop on e-Business (WEB), and Pacific Conference on Information Systems (PACIS).
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