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Acquiring Competence at a Distance: Application Service Providers as a Hybrid Organizational Form

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Abstract

Application service providers (ASPs) are an innovative way for firms to outsource business functions by renting software as a service via the Internet. ASPs bring state of the art technology within the reach of firms that have been denied access to such advances in the past. The novelty of the ASP model results from the use of the Internet in the provision of services and the virtual inter-organizational tie that it creates between ASP and customer. The novelty of the ASP model has generated legitimacy concerns among the potential pool of customers, which has slowed the diffusion of this innovation. The recent dot-com fall-out has also had negative effects on the diffusion of the model. Nonetheless, the ASP model has managed to survive by adapting to the trends of the market. Entrepreneurship researchers have two reasons to pay more attention to ASPs. First, the emergence of the ASP business model has opened up opportunities for entrepreneurial activity by those seeking to capitalize on this new business model. Second, the proliferation of ASPs has the potential to affect other new ventures by altering their technology options.

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Authors and Affiliations

  1. LeBow College of Business, Drexel University, Philadelphia, PA, 19104, USA

    Annetta Fortune

  2. Department of Sociology, CB 3210, University of North Carolina, Chapel Hill, NC, 27599-3210, USA

    Howard E. Aldrich

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  1. Annetta Fortune
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  2. Howard E. Aldrich
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Fortune, A., Aldrich, H.E. Acquiring Competence at a Distance: Application Service Providers as a Hybrid Organizational Form. Journal of International Entrepreneurship 1, 103–119 (2003). https://doi.org/10.1023/A:1023271323880

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