Determinants of application service provider choice: an integrated perspective

With the rise in the availability of scalable network technologies and resources, Application Service Providers (ASPs) have become increasingly more feasible sources for obtaining information systems (IS) services. ASP research represents an opportunity to integrate previous research on outsourcing, applied in the area of ASP choice. Historically, outsourcing research has adopted many theoretical perspectives, including transaction cost, resource-based, resource-dependence, and knowledge-based. We apply these perspectives in the ASP context. When obtaining IS services through an ASP, factors other than cost and those explained by the resource-based and resource-dependent perspectives can become paramount. The knowledge-based perspective enables us to examine knowledge risk and integration requirements. Drawing upon past research and an exploratory study conducted with 35 respondents in 11 firms, an integrated, theoretical model is proposed, which combines the transaction cost, resource-based, resource dependency and knowledge-based perspectives. The model is used to explain the antecedent conditions useful for making decisions on IT sourcing through ASPs.