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Structural analysis of value creation in software service platforms

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  • Netsanet Haile

    (Seoul National University)

  • Jörn Altmann

    (Seoul National University)

Abstract

As software service platforms grow in number of users and variety of service offerings, it raises the question of how this phenomenon impacts the value obtained by users. This paper identifies system usability, service variety, and personal connectivity to be the major determinants that contribute to the value offered to users on mobile software service platforms. A structural equation model, which is based on utility theory, technology acceptance theory, and the theory of network externalities, has been constructed from seven observed constructs, reflecting the three determinants and the user value. The lower bound of user value is estimated through the user’s willingness-to-pay for services and the user’s willingness to spend time on using services. For the validation, a co-variance-based structural equation analysis has been conducted on online survey data of 210 users of mobile service platforms (e.g., Android, iOS). The results show that the number of services used and the number of active user connections were found to be the strongest constructs explaining user value. Perceived usefulness did not explain user value as much. In total, they can explain 49 % of the value that the user receives from the platform. The implication of this result is that users’ value from a software service platform cannot be explained by the technology acceptance model itself. Instead, an approach that, as used in this research, of integrating network externality theory, utility theory, and technology acceptance theory is necessary.

Suggested Citation

  • Netsanet Haile & Jörn Altmann, 2016. "Structural analysis of value creation in software service platforms," Electronic Markets, Springer;IIM University of St. Gallen, vol. 26(2), pages 129-142, May.
    • Handle: RePEc:spr:elmark:v:26:y:2016:i:2:d:10.1007_s12525-015-0208-8
    DOI: 10.1007/s12525-015-0208-8
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    More about this item

    Keywords

    Software ecosystem; Network effects; TAM; Utility theory; Value creation; Mobile software service platforms;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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