Determinants of success for application service provider: An empirical test in small businesses

Recently, application service provider (ASP), a new rental-based enterprise software business, has become a viable option. Although ASP has the potential to fundamentally change the manner in which IT services are provided for user firms, current ASPs often fail to show robust records in accumulating and maintaining customers. Therefore, this paper attempts to explore the main success factors for ASP-based information systems on the basis of past IS success models. Two hundred and three samples were collected from small and medium enterprises with ASP service experiences. Data analysis using LISREL shows that seven IS success factors—system quality, information quality, service quality, intention to use, user satisfaction, individual benefit, organizational benefit and an additional factor, trust, have good fit with data gathered. These factors, except for system quality, show significant coefficients and explanatory power. Furthermore, it is found that both service quality and information quality are significant for fostering user satisfaction, trust, and intention to use.