The Rationale Behind Strategic Alliances in Application Service Provision

Abstract

Application service provision, which consists of deploying, managing, and remotely hosting software applications through centrally located servers, is emerging as a new form of application outsourcing that is attractive to many sectors. Partnering in this context has gained major importance among practitioners and researchers. Although this article demonstrates the importance of strategic alliances for the development of the ASP model, the included cases display relatively contradicting ideas, where in one of the two illustrated cases strategic alliances were not part of the business model. This article establishes a discussion on the pre-formation phase of strategic alliances, focusing on the rationale behind entering strategic alliances, and offers a set of guidelines for ASPs to consider when entering the partnering arena.