IT Service Platforms: Their Value Creation Model and the Impact of their Level of Openness on their Adoption

Selam Abrham Gebregiorgis () and Jörn Altmann
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Selam Abrham Gebregiorgis: Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University

No 201295, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

Abstract: Many IT service platforms (e.g., cloud computing platforms) are built as closed systems. They do not allow their customers to interoperate with other platforms or port their data to other platforms. As switching to different system is costly, customer of a closed IT system can be considered locked in. Consequently, potential customers, who are aware of this lock-in issue, do not adopt cloud services. Opening up an IT service platform, however, reduces users¡¯ concerns about lock-in and its associated switching cost. It is even predicted that an IT service platform gets more attractive, if it opens up. This paper validates this prediction by analyzing the level of openness (i.e., interoperability, portability, and usability) of cloud computing platforms on their adoption. For the validation, we develop a value creation model for IT service platforms, using existing methods on value networks. Based on this value creation model and a specification of requirements of open cloud computing platforms, the relationship between the openness of IT service platforms and the adoption of IT service platforms (i.e., attractiveness) is analyzed in detail. In particular, our results show that the level of openness plays a major role in the adoption of IT service platforms of emerging service providers.

Keywords: Open IT Service Platforms, Interoperability, Portability, Usability, Openness, Cloud Computing Adoption; Value Creation Model, Simulation, Computational Economics, System Dynamics, Value Networks. (search for similar items in EconPapers)
JEL-codes: C15 C61 C63 D21 D24 D46 D81 L11 L15 L22 L86 M15 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012-06, Revised 2012-06
New Economics Papers: this item is included in nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:snv:dp2009:201295

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