Value Creation from Application Service Provisioning: Lessons from Four Vendor Firms

This paper embraces the electronic business model concept as the unit of analysis for investigating application service providers (ASPs). It develops three constructs fundamental to the ASP business model: strategic positioning, product/service portfolio, and customer value proposition. Four short case study examples of different ASP business models are discussed. The findings suggest that, despite firm efforts to strategically differentiate their ASP business model from their rivals, each failed to provide the customer with an attractive value proposition to achieve a sustainable competitive position.