Determine a company’s Software as a Service potential. The development of a perspicuous investment analysis model from a venture capital perspective
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Typ
Examensarbete för masterexamen
Program
Management and economics of innovation (MPMEI), MSc
Publicerad
2021
Författare
Silver, Elin
Sundvall, Anna
Modellbyggare
Tidskriftstitel
ISSN
Volymtitel
Utgivare
Sammanfattning
The software industry is facing significant changes, and new business models are
emerging. Instead of providing traditional software, the industry focuses on providing
Software as a Service rather than a software product. There is a need to investigate
how these new business models can be categorised, evaluated, and analysed.
Therefore, this thesis aims to enhance the understanding of objectively evaluating
companies with the potential to transform into Software as a Service. The goal was
reached by identifying factors that need to be analysed and which conclusions can
be drawn by analysing those factors. That knowledge was used to create a robust
evaluation tool that can align investment decision-making processes with investment
strategies focusing on investing in potential Software as a Service companies, and
was performed using an iterative process consisting of three steps: data collection,
model visualisation, and validation. Data was gathered through mapping, a workshop,
and two rounds of interviews. The data was used to develop models that were
validated in the workshop and the interview rounds. Several factors were identified
as critical to evaluate when searching for companies with Software as a Service
potential. Many of those factors affecting the Software as a Service potential were
subjective and challenging to evaluate. Therefore, a more in-depth analysis was
made of these factors. The factors were divided into six comparison areas: product
strategy, revenue strategy, distribution, service and implementation, market, and organisation.
A model was developed to analyse each comparison area systematically
by dividing the areas into comparison metrics. The comparison metrics facilitates
an objective analysis. The model created enables the user first to collect the information,
visualise it in the model, and then get a comprehensive summary of the
information, guiding an investment decision. The separation of tasks prevents the
user from getting influenced by one factor before information about all necessary
factors is gathered, improving objectivity. When a company’s analysis is visualised
in the model, an indication is given of the company’s Software as a Service potential.
Beskrivning
Ämne/nyckelord
Software as a Service (SaaS), Investment analysis, Investment decision, Venture capital firm, Objectivity