Do costs matter in ASP sourcing decisions?

This paper on Application Service Providers investigates why organizations select anASP as a form of IS sourcing. To achieve this, we set the ASP within the context of literature onNeoclassical and Resource-Based View (RBW) theories. The results revealed that costs matterlittle in ASP sourcing decisions. The ASP is chosen not simply as a cost reducing alternative, butmoreover, when companies detect an IS gap. Our study presents some managerial implicationsthat affect both customers and ASPs.