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Software Resource Management Considering the Interrelation between Explicit Cost, Energy Consumption, and Implicit Cost: A Decision Support Model for IT Managers

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Author Info

  • Jorn Altmann

    ()

  • Juthasit Rohitratana

    (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)

Abstract

Despite the fact that Software-as-a-Service (SaaS) adoption increases, the question whether SaaS is the right choice for an organization is still open. The main objective of this study is to propose the Software Licensing Selection Support (SL2S) model for selecting a SaaS Licensing (SaaSL) model or a Perpetual Software Licensing (PSL) model. The SL2S model considers different types of criteria under Green IT policies and sustainable IT resource conditions proposed in the literature. Based on the criteria that influence the selection of the software licensing type, we perform a sensitivity analysis, to understand the dependencies between explicit cost, implicit cost, and energy consumption. To validate the model, we constructed a scenario, in which a medium-sized company has to decide on a software licensing model. The scenario and its parameters were populated with data about CRM solutions of Salesforce.com and Microsoft, the SME definition of the European Commission, and several case studies. The results show that implicit cost criteria (25% of SaaSLM) are major decision factors. It suggests that a sustainable IT policy cannot only consider lowering cost (as a mean for lowering energy consumption) but also has to re-evaluate its relation to implicit cost criteria.

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File URL: ftp://147.46.237.98/DP-36.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 200936.

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Length: 18 pages
Date of creation: Nov 2009
Date of revision: Nov 2009
Publication status: Published in MKWI 2010, Multikonferenz Wirtschaftsinformatik, IT Resource Management, G?tingen, Germany, February 2010
Handle: RePEc:snv:dp2009:200936

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Related research

Keywords: Software-as-a-Service (SaaS); software selection; Decision Support System; sensitivity analysis; perpetual software licensing model; Green IT; energy consumption; decision factor analysis; cost modeling; IT resource management competition;

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References

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  1. Wang, Ge & Huang, Samuel H. & Dismukes, John P., 2004. "Product-driven supply chain selection using integrated multi-criteria decision-making methodology," International Journal of Production Economics, Elsevier, vol. 91(1), pages 1-15, September.
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Cited by:
  1. Mohammad Mahdi Kashef & Jorn Altmann, 2011. "A Cost Model for Hybrid Clouds," TEMEP Discussion Papers 201182, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Dec 2011.
  2. Radoslaw R. Okulski & Almas Heshmati, 2010. "Time Series Analysis of Global Airline Passengers Transportation Industry," TEMEP Discussion Papers 201065, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jul 2010.
  3. Juthasit Rohitratana & Jorn Altmann, 2012. "Impact of Pricing Schemes on a Market for Software-as-a-Service and Perpetual Software," TEMEP Discussion Papers 201288, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Mar 2012.

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