IT Service Platforms: Their Value Creation Model and the Impact of their Level of Openness on their Adoption

Many IT service platforms (e.g., cloud computing platforms) are built as closed systems. They do not allow their customers to interoperate with other platforms or port their data to other platforms. As switching to different system is costly, customer of a closed IT system can be considered locked in. Consequently, potential customers, who are aware of this lock-in issue, do not adopt cloud services. Opening up an IT service platform, however, reduces users¡¯ concerns about lock-in and its associated switching cost. It is even predicted that an IT service platform gets more attractive, if it opens up. This paper validates this prediction by analyzing the level of openness (i.e., interoperability, portability, and usability) of cloud computing platforms on their adoption. For the validation, we develop a value creation model for IT service platforms, using existing methods on value networks. Based on this value creation model and a specification of requirements of open cloud computing platforms, the relationship between the openness of IT service platforms and the adoption of IT service platforms (i.e., attractiveness) is analyzed in detail. In particular, our results show that the level of openness plays a major role in the adoption of IT service platforms of emerging service providers.