Cloud Ebusiness Model Essay

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Pages: 16
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Summary of “Cloud Computing and Transformation of
International
e-Business Model”
Petri Ahokangas, Marko Juntunen & Jenni Myllykoski
University of Oulu, Finland
Oulu Business School
Department of Management and International Business petri.ahokangas@oulu.fi, marko.juntunen@oulu.fi, jenni.myllykoski@oulu.fi
8th SKM Symposium / Track 6 (Special Track V) Business Model Innovation

Abstract

Business model has been regarded as a vehicle that closes the gap between the abstract and the practice within strategic management and international business. Despite this, our knowledge of how international business models are created or transformed has remained elusive and empirical research on the topic remains rare. By revisiting the Internet internationalization and e-business model literature, this paper explores the transformation of international business models in the context of international ICT businesses where cloud computing has triggered a major paradigm change in the way how software and hardware related services are offered to international customers. Earlier research indicates that e-business have several implications to internationalization, including speeded up and earlier start of the internationalization processes, dilution of the sequencing of the internationalization process, virtualization of (international) locations and services, multiple simultaneous market entry through the Internet, and enhanced building of international networks. All these changes have major consequences on the business models of the firms, and among international e-businesses the emergence of cloud service concepts – such as IaaS (Infrastructure-asa-Service), PaaS (Platform-as-a-Service), SaaS (Software-as-a-Service) and DaaS (Data-as-aService) – has brought about a need to fundamentally rethink the business models. Through comparative analysis of two cases companies, this paper examines the business model transformation processes in the cloud computing context, and contributes by re-conceptualizing the international business model as a concept and by rooting the conceptualization with the business model transformation process.
Keywords: Business model, cloud computing, internationalization
Acknowledgements: This research has been supported by the Tivit Cloud Software Program.

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Cloud Computing and Transformation of
International e-Business Models
1. Introduction
The evolution and convergence of modern communication technologies and the Internet has opened up a new era and opportunity field for internationally oriented companies—the era of international
Internet services and online internationalization. International business through or in the Internet requires, however, a business model (e.g., Osterwalder 2004, Morris et al., 2005; Morris et al., 2006;
McGrath 2010; Teece 2010; Chesborough 2010; Zott et al., 2011) that makes it possible for companies to operate in it, also across country borders (Daniel & Wilson 2003; Pavic et al., 2007).
The latest stage of this internetization and online internationalization is cloud computing or cloudification—i.e., running applications on the web via the browser (The free dictionary, 2013)— that has not only created new international product/service markets but also destroyed and increasingly keep on destroying existing markets. Providing software over the Internet in the cloud represents a new form of ICT business which is increasingly challenging the traditional software and hardware product business models and ecosystems. But, while cloud computing has brough virtualized technologies into large-scale use, it is not only a technical process, as it has made possible to virtualize and therefore internationalize also business applications, processes, locations and services. Thus, cloud can be regarded as intrinsically international (c.f., Kobrin, 2001) as it is transforming the entire software business by changing the way how software and hardware are delivered, utilized and charged (McLaughlin
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