Software-as-a-Service: strategizing for customer loyalty

Abstract: Nowadays, almost all IT operations are cloud-based, and it is obviously reshaping the arena for the software service providers. Business customers expect great value-creating features, flexibility and customizable softwares without having to invest in any hardware, skilled programmers or pay for lengthy licenses. Is it possible to meet those desires and still secure revenue streams and grow the venture within this booming niche? This study focuses on what an entrepreneurial firm in the rapidly growing service niche of Software-as-a-Service can do in order to secure loyal customer relations through strategic actions. The study includes the perspective of five active companies and their ways of managing these challenges. The authors report that formal agreements through licensing is highly regarded and perhaps becoming a standard in the niche. They also claim that different levels of deliberate strategies such as success processes, measuring loyalty indicators and monitoring the actions of customers is key aspects to consider. There are also indications of a link between market competition and the use of formalized retention strategies.