Contextual dependence of a business model : A study of IT companies

Abstract: The research presented here is dedicated to the contextual dependence of a business model assumed by an IT company. A business model may articulate the value of a specific technology, while the technology as such cannot generate value. This study starts with presenting a review of current understanding of the business model as such. This gives rise to the formulation of a pre-understanding suggesting that any business model should be dependent on its context, for its structure and functioning. This pre-understanding was tested empirically by a study of three IT companies. The key result suggests that the conception of a company’s business model may be made fruitfully in relation to the industry’s lifecycle stage. A second finding suggests that there seems to be a co-evolution of the business model and the information infrastructure that underlies and enables such a business model. The study contributes to the cross-disciplinary research by revealing relations between information technologies, business models and organizational life cycle. The outcomes of the research may help practitioners to analyze the company’s business and make better decisions.