Understanding the role of organizational integration in developing and operating Software-as-a-Service

While previous research has mostly studied Software-as-a-Service from a client perspective or focused on downstream activities of vendors, an in-depth understanding of the coordination and communication between software development and software operations is still missing. In order to fill this gap, we develop a theoretical framework that integrates extant literature on the constituent characteristics of services and on organizational integration. Guided by this framework and based on a multiple-case study of six software vendors, we identify five types of challenges and opportunities of organizational integration between Software-as-a-Service development and operations. The challenges include ensuring awareness and continuity between operations and development, as well as considering customers’ business activities in scheduling updates. The opportunities relate to the ability to leverage a direct feedback channel and innovate with higher velocity. In addition, service mindset, technical harmonization, and company size emerged as three contingency factors that enable or inhibit organizational integration. The study contributes to existing literature by providing a better understanding of the activities that require coordination and communication when developing and operating Software-as-a-Service. Moreover, this study adds to previous research by linking the integration of organizational subunits to constituent characteristics of services. Decision makers learn about challenges and opportunities when offering Software-as-a-Service that go beyond providing a technical infrastructure. © 2014, Springer-Verlag Berlin Heidelberg.