Evolution of Business Models: A Case Study of SAP

The ERP industry has undergone dramatic changes over the past decades due to changing market demands, thereby creating new challenges and opportunities, which have to be managed by ERP vendors. This paper inquires into the necessary evolution of business models in a technology-intensive industry (e.g., develop new offerings, engage in partnerships, and the utilize new sales channels). This paper draws from strategy process perspective to develop an evolutionary business model (EBM) framework that explains the components and processes involved. The framework is then applied to a longitudinal case study of SAP to explain how its success in a technology-intensive industry hinges on its ability to reconfigure its business model. The paper contributes to the extant literature on business models in two ways: first, by identifying and explaining the need for an evolutionary perspective; and second, by adopting different value configurations to reflect the convergence of customers, suppliers and vendors.