An Explorative Study on the Business Model of Application Management Service
Date Issued
2005
Date
2005
Author(s)
TSENG, FEN-HSIUNG
DOI
zh-TW
Abstract
As the global market keeps growing, competition becomes intensive as well. Information technology therefore becomes a critical measure to building a firm’s competititve advantages. Despite the debate on “Does IT Matter ?” proposed by Nicholas Carr, the fact is that the information technology (IT) industry still keeps a growing pace during recent years. The needs of the IT service to corporations will be on the rise dramatically. The Gartner Group states that the total market of IT service and software is as twice as that of hardware in 2003. It also estimated the expenditure of IT service will have 7.2% growth rate per year as oppose to 2.2% of hardware.
The IT service and software industries in Taiwan, however, are rather weak. Compared with the total output of the hardware industry, the software sector is around one tenth of that total amount. Even worse is that most of the software companies in Taiwan suffer from poor financial performance. While the root courses are various, the current research took a view from value proposition of IT service models to explain why this scenario will occur and how we could fix the problem. By investigating major IT service companies in Taiwan, we found that almost all companies relied upon project-based, hardware-boundled businesses, and the customer needs for application maintenance and software management are simply untounched.
The purpose of this study is to analyze the feasibility of “Application Management Service (AMS)” as a business model. We sequentially examine this business model along the five elements of business model: “Value Proposition”, “Scope”, “Profit Capture”, “Strategic Control” and “Execution”. Business landscape and competition analysis are covered by this study as well. This study also suggests that the key successful factors (KSF) for undertaking this business model are: the vender’s software engineering and management capability, customers’ support, economics of scale, and strategic alliance. Implications and suggestions to potential contenders are discussed.
Subjects
應用系統管理服務
商業模式
產業分析
Application Management Services
Business Model
Industrial Analysis
Type
thesis