Optimal Market Entry Strategy for New Software-as-a-Service Vendors

As a new software licensing model, software-as-a-service (SaaS) is gaining tremendous popularity across the globe. In this study, we investigate the competition between a new entrant and an incumbent in an SaaS market, and derive the optimal market entry strategy for the new entrant. One interesting finding is that, when its product quality is significantly lower than that of the incumbent, the new entrant should adopt an instant-release...