Software Resource Management Considering the Interrelation between Explicit Cost, Energy Consumption, and Implicit Cost: A Decision Support Model for IT Managers

Jörn Altmann and Juthasit Rohitratana

No 200936, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

Abstract: Despite the fact that Software-as-a-Service (SaaS) adoption increases, the question whether SaaS is the right choice for an organization is still open. The main objective of this study is to propose the Software Licensing Selection Support (SL2S) model for selecting a SaaS Licensing (SaaSL) model or a Perpetual Software Licensing (PSL) model. The SL2S model considers different types of criteria under Green IT policies and sustainable IT resource conditions proposed in the literature. Based on the criteria that influence the selection of the software licensing type, we perform a sensitivity analysis, to understand the dependencies between explicit cost, implicit cost, and energy consumption. To validate the model, we constructed a scenario, in which a medium-sized company has to decide on a software licensing model. The scenario and its parameters were populated with data about CRM solutions of Salesforce.com and Microsoft, the SME definition of the European Commission, and several case studies. The results show that implicit cost criteria (25% of SaaSLM) are major decision factors. It suggests that a sustainable IT policy cannot only consider lowering cost (as a mean for lowering energy consumption) but also has to re-evaluate its relation to implicit cost criteria.

Keywords: Software-as-a-Service (SaaS); software selection; Decision Support System; sensitivity analysis; perpetual software licensing model; Green IT; energy consumption; decision factor analysis; cost modeling; IT resource management competition (search for similar items in EconPapers)
JEL-codes: C13 C44 L86 M15 M21 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2009-11, Revised 2009-11
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in MKWI 2010, Multikonferenz Wirtschaftsinformatik, IT Resource Management, G?tingen, Germany, February 2010

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Persistent link: https://EconPapers.repec.org/RePEc:snv:dp2009:200936

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