Usage Continuance in Software-as-a-Service
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Usage Continuance in Software-as-a-Service Elias Baumann1 ¨ Jana Kern1 ¨ Stefan Lessmann1 Accepted: 10 September 2020 © The Author(s) 2020
Abstract Software-as-a-service applications are experiencing immense growth as their comparatively low cost makes them an important alternative to traditional software. Following the initial adoption phase, vendors are now concerned with the continued usage of their software. To analyze the influence of different measures to improve continued usage over time, a longitudinal study approach using data from a SaaS vendor was implemented. Employing a linear mixed model, the study finds several measures to have a positive effect on a software’s usage penetration. In addition to these activation measures performed by the SaaS vendor, software as well as client characteristics were also examined, but did not display significant estimates. The findings emphasize the need for proactive activation initiatives to raise usage penetration. More generally, the study contributes novel insights into the scarcely researched field of influencing factors on SaaS usage continuance. Keywords Linear mixed models ¨ Software-as-a-service ¨ Usage continuance
1 Introduction With the continuing trend toward IT industrialization, public cloud services constitute an evolution of business by allowing for a new opportunity to shape the relationship between IT service customers and vendors (Van der Meulen and Pettey 2008). Cloud computing can be categorized into three broad service categories, namely infrastructure-as-aservice (IaaS), platform-as-a-service (PaaS), and softwareas-a-service (SaaS). According to Gartner (2016), these cloud services are subject to a 26.4 % growth in 2017, resulting in a total market size of $ 89.8 billion worldwide. SaaS solutions make up the biggest amount among the three service categories with a forecasted market size of $ 46.3 billion for 2017. For software-as-a-service applications, customers do not pay to own the software but instead only pay to access and use it . In turn, the SaaS provider hosts and operates the application (Cisco 2009). This business model offers various advantages to its customers, such as reduced IT dependence and costs and more flexibility as a company is able to scale the SaaS solution quickly as business conditions change (Waters 2005). The SaaS business model Stefan Lessmann
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School of Business and Economics, Humboldt-University of Berlin, Unter-den-Linden 6, 10099, Berlin, Germany
is also of advantage to its vendors. Compared to traditional software vendors, SaaS solution providers typically operate in close connection with their clients, which leads to greater knowledge about customers and their requirements. As clients pay on a regular basis in exchange for continued access to the application, SaaS companies possess a predictable recurring revenue stream (Cloud Strategies 2013). However, SaaS vendors also critically depend on the renewals of subscriptions making them highly sensitive to the clients constant so
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