Taking a Service-oriented Perspective on Software Business: How to Move from Product Business to Online Service Business

The purpose of this paper is to study how a software product company can expand its business with the Software as a Service (SaaS) model. The differences between the product and service business are considerable and the change of focus from one to the other is not easily done. For example, the scale economies, which are associated with the product business, are not easily achieved in the service business. However, the SaaS business model has many benefits to offer to both SaaS customers and providers. SaaS services e.g. enable customers to focus on their core competencies, provide easier access to technical expertise, and offer economical access to valuable software applications at anytime and from anywhere. To providers, SaaS offers e.g. lowered production and distribution costs, more predictable cash flows, and shortened sales cycle. In this research study, we examine how the SaaS model can be implemented by a software company and conduct a case study on F-Secure and its Service Platform security service. Our findings include that by successfully solving the risks associated with the SaaS model and by fulfilling the customers’ demands of customization and at the same time benefiting from economies of scale, scope, and aggregation, F-Secure has leveraged its domain area expertise with its SaaS offering: F-Secure has expanded its operations in a number of countries and increased its customer base both in B2C and SME markets profitably with the help of its partners.