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Structural analysis of value creation in software service platforms

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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.

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Acknowledgments

This research was partly supported by the Korea Institute for Advancement of Technology (KIAT) within the ITEA 2 project 10014 EASI-CLOUDS and by the Research Grant for Foreign Professors through Seoul National University (SNU) in 2014.

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Authors and Affiliations

  1. Technology Management, Economics, and Policy (TEMEP), College of Engineering, Seoul National University, 1 Gwanak-Ro, Gwanak-Gu, 08826, Seoul, Korea

    Netsanet Haile & Jörn Altmann

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  1. Netsanet Haile
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  2. Jörn Altmann
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Correspondence to Jörn Altmann.

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Responsible Editor: Andreja Pucihar

Appendix 1: survey for mobile software service (apps) users

Appendix 1: survey for mobile software service (apps) users

Respondent Profile

  • Please specify your gender.

  • Please specify your age.

  • Please specify your occupation.

  • Please specify your income level during the past year (in US dollars).

  • When did you start using smartphones for the first time?

  • Which mobile service platform are you using?

System Usability

(PEOU) It is easy to find and use the apps you need among what is offered by your platform.

(PU) I find the apps offered on my platform useful.

Service Variety

(SI) How many apps do you have on your smartphone?

(SU) On average, how many apps do you use per day?

User Connectivity

(SC) How many connections (number of friends) in total do you have in your social media apps (e.g., Facebook, Google+, Twitter, LinkedIn, Skype)?

(AC) Among the above connections (friends), how many people did you communicate with during the last month?

User Value

(WTP1) On average, how much time per day do you spend using apps on your smartphone?

(WTP2) How much did you spend on average per month on usage for apps (e.g., for gaming, listening to music, watching movies)?

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Haile, N., Altmann, J. Structural analysis of value creation in software service platforms. Electron Markets 26, 129–142 (2016). https://doi.org/10.1007/s12525-015-0208-8

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