Paper Info
Title
Exposing and selling the use of web services - an option to be considered in make-or-buy decision-making.
Abstract
The emergence of the web service market has enabled firms to choose between developing web services internally and purchasing them externally from web service providers. In general, these so-called make-or-buy decisions have been the object of intense debate in the IT outsourcing literature. However, characteristics of web services such as loose coupling and the current trend of digitalizing application interfaces enable new opportunities especially to non-software firms: when a firm decides to develop a web service internally (make-decision), it has the option of exposing and selling the use of this web service after its internal development (sell option). In this paper, we propose a normative approach for the valuation of such a sell option based on real option theory, taking into account the characteristics of web services. This approach enhances traditional make-or-buy approaches by additionally considering this sell option in decision-making. Our results are twofold: (I) the sell option has considerable impact on traditional make-or-buy decisions and makes the internal development of web services more attractive; (II) it is preferable to execute the sell option as soon as possible after completion of the internal development of the web service.
Year
DOI
Venue
2016
10.1016/j.dss.2016.06.006
Decision Support Systems
Keywords
Field
DocType
Make-or-buy decisions,Web services,Real option theory,Sell option,Web service market
Loose coupling,Computer science,Outsourcing,Purchasing,Web service,Valuation (finance),Marketing,WS-Policy
Journal
Volume
Issue
ISSN
89
C
0167-9236
Citations 
PageRank 
References 
0
0.34
30
Authors
3
Name
Order
Citations
PageRank
Steffen Zimmermann18412.62
Marcel Philipp Müller231.39
Bernd Heinrich36610.57