An empirical investigation of determinants to buy application services from ASPs

The Application Service Provider (ASP) is a pivotal point in the organization of information systems, since it brings up a new paradigm: “make, buy or rent”. An ASP is a company, which manages and rents software to different users through an own data centre and network infrastructure, typically the Internet. In this way, the application services can be easily and quickly upgraded, which allows to distribute only the needed applications to different users in different places, without the disadvantage of fixed costs for them. This new challenge in the ICT arena aims to find its business on the capability to maximize scale and experience economies deriving from hardware and software management and maintenance, transferring this advantage to its clients, making them able to reduce ICT costs. The paper tested three hypotheses explaining the rent propensity, which is the propensity to buy application services from an ASP. In particular, two of the three hypotheses were confirmed. The first one shows how the “gap” in internal IS capabilities positively affect the acquisition of application service from an ASP. The second hypothesis confirmed shows how the propensity to buy application services depends on the company capability to monitor and control costs referred to information systems. The first implication is that application services are not bought exclusively for economic reasons. This becomes even clearer when competences for losing data and infrastructure control are taken into account. Some other several managerial and organizational implications stand out clearly in detail in the paper.