Towards successful business models of cloud service providers through cooperation-based solutions
Stine Labes · DepositOnce · 2017
IT service providers face high competition in a continuously growing and fast changing IT market. This fast growing market offers economic opportunities for IT service providers but the rapid market change is a threat for their survival. “Cloud Computing” is one of the recent trends that changed the IT market and established itself as the new way of IT provisioning. It describes each IT product (infrastructure, platform, software, business processes) as a standardized service based on a shared virtualized resource pool, which can be procured as a flexible, scalable, and transparent IT service via the internet. The present thesis addressed this emerging type of IT provision and aimed at developing robust and validated guidelines for successful business models for cloud service providers. The thesis was subdivided in two parts. The first research part analyzed business models of cloud providers and their success to derive specific needs, gaps and success factors. A second in-depth part addressed identified gaps and developed design science artifacts that contribute to closing the gaps. For the foundation, a comprehensive literature review using 70 journals, six conferences, and four scientific databases was conducted to analyze the related work for business models within cloud computing. The literature synthesis revealed networking aspects with partners as important gap for further research. To complement the theoretical perspective, a quantitative cross-sectional study was performed to analyze the business models of a systematically selected sample of 29 IT service providers world-wide. A developed framework, consisting of 103 business model characteristics in eight categories, served as analysis unit for the cloud business models. The results of the business model study confirmed that networking aspects were rarely reflected in cloud business models. Using the validated business model framework, a larger systematic selection of 45 cloud business models was examined regarding two indicators for success. The evaluation was performed using a more detailed application of the framework, enabling a higher graded differentiation between the business models. A statistical correlation analysis revealed 39 significantly success-related business model characteristics that served as operationalization of generic success factors proposed by the literature. Besides the product portfolio, a high vertical integration, and synergy effects, the results emphasized the partner network as success factor of cloud business models. Based on the larger and more graded database, a cluster analysis led to a specification of common provider meta types and their prospects for success: Specialized cloud providers showed the most successful business models, while small newcomers had difficulties to compete. These prospects for success were evaluated in expert interviews with 12 IT managers experienced in cloud computing and provision. A qualitative content analysis of the structured interviews revealed recommendations for the success of each provider type. The experts confirmed that a cooperation network between newcomers is a valuable option to survive in the cloud market. As the time-to-market is more relevant than the risk of losing knowhow in a network, disadvantaged cloud providers should cooperate to develop and implement innovative business models. Based on the findings, the second research part addressed cooperative networks between cloud service providers in detail. Companies with the same needs, legal requirements, goals or the same data can internally share an infrastructure pool, processes, data, or knowhow to compete in the cloud market. To examine the economic value of cooperation, a comparison of 13 network theories revealed cost savings, interdependencies, market strength, resource access, and economies of scale as the basic values of cooperative networks. A framework evaluation of 16 cloud communities indicated that cooperation between cloud providers had a particularly higher economic value compared to cooperation between customers of cloud services. A case study of a provider-based community cloud project revealed technical, organizational, legal, and individual challenges by migrating into a community cloud. Especially individual challenges regarding an uncertain situation and the lack of cooperativeness of the community members were rarely documented in science and practice. Action research was used to combine both views on this challenge. A business board game was created that served as simulation environment. This game contributed to a more elaborated and realistic user experience for a complex cooperative situation and strategy development in a community cloud. Within a validation workshop, expert IT managers confirmed that the game approach led to an increased individual cooperativeness but showed a remaining limitation regarding an incentivizing allocation of jointly produced profit. This need was addressed with a further combination of design science and action research to develop a mathematical profit sharing mechanism with regard to design goals obtained from extensive discussions with IT managers. The iteratively developed mechanism was based on mathematical equations and offers incentives to all members of the community cloud. Conducting a game-based simulation workshop with different IT managers, the incentive system was evaluated. The results showed that the developed incentive system of a profit sharing mechanism enhanced the cooperativeness of the IT providers and increased the overall profit compared to an egoistic or cooperative strategy without profit sharing.