Dirk Schneckenberg
email: dirk.schneckenberg@rennes-sb.com

Jose Benitez
email: jose.benitez@rennes-sb.com

Christoph Klos
email: christoph.klos@uni-kassel.de

Vivek Velamuri
email: vivek.velamuri@hhl.de

Patrick Spieth
email: spieth@uni-kassel.de

Dirk Schneckenberg

Value creation and appropriation of software vendors: A digital innovation model for cloud computing

Keywords: Digital innovation, software vendors, cloud computing, business model, digital capabilities, organizational capabilities

Introduction

The digital transformation era provides opportunities and challenges to software vendors/firms (i.e., in short, software vendors). User companies with limited information technology (IT) capabilities must outsource their IT function to software vendors (Benitez et al., 2020a). The rapid evolution of digital technologies (e.g., social media, mobile, cloud computing, analytics, Internet of Things, artificial intelligence, machine learning, and blockchain) presents to software vendors important challenges in innovating on their business models and proposing, creating, and capturing business value. As cloud computing has been one of the most impactful digital technologies in software vendors' business models and the transformation of customer companies, this study focuses on the role of cloud computing.

Digital innovation refers to the firms' strategic choices to execute digitally enhanced valueadding activities, transforming business models, and enabling new product and service offerings [START_REF] Kohli | Digital innovation: A review and synthesis[END_REF][START_REF] Hensen | Hierarchical business value of information technology: Toward a digital innovation value chain[END_REF]. The rapid evolution of digital technologies has fundamentally changed the innovation strategies and related software firms' IT services [START_REF] Hess | Options for formulating a digital transformation strategy[END_REF][START_REF] Rose | An integrated model of innovation drivers for smaller software firms[END_REF][START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF][START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF]. One widely proliferating type of digital technology in the software industry is cloud computing, enabling the ubiquitous, Internetbased provision of on demand software applications [START_REF] Mell | The NIST definition of cloud computing recommendations of the national institute of standards and technology[END_REF]. Cloud computing has thus emerged as a disruptive digital technology, altering software vendors' business processes and reshaping the value mechanisms of their business models [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Kranz | Understanding the influence of absorptive capacity and ambidexterity on the process of business model change: The case of on-premise and cloudcomputing software[END_REF].

The business model reflects the way through which the firm offers value to customers, entices customers to pay for value (i.e., value creation), and converts those payments to profit (i.e., value capture) [START_REF] Teece | Business models, business strategy and innovation[END_REF][START_REF] Foss | Fifteen years of research on business model innovation: How far have we come, and where should we go[END_REF]. The firm's business model derives from dominant managerial logic and choices on doing business successfully in a specific industry [START_REF] Doganova | What do business models do? Innovation devices in technology entrepreneurship[END_REF][START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF]. The digital transformation in the software industry challenges this dominant logic, as it requires specific IT and organizational (i.e., business, non-IT) firm's capabilities [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Svahn | Embracing digital innovation in incumbent firms: How Volvo cars managed competing concerns[END_REF][START_REF] Helfat | Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems[END_REF]Castillo et al., forthcoming). "With cloud computing, a product-centric model for IT provisioning is transformed into a global, distributed, service-centric model, leading to a disruptive shift from IT-as-aproduct to IT-as-a-service" (Benlian et al., 2018, p. 720); software vendors face new challenges that may require the integration and assimilation of cloud computing, and the development of IT and organizational capabilities [START_REF] Helfat | Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems[END_REF][START_REF] Li | Dynamic information technology capability: Concept definition and framework development[END_REF]. The appropriate cloud computing's assimilation and the complementarity of IT and organizational capabilities may help software vendors to design a cloud computing-enabled innovation strategy for the digital boost1 , a topic that has received limited attention in Information Systems (IS) research (e.g., [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Benlian | The transformative value of cloud computing: A decoupling, platformization, and recombination theoretical framework[END_REF]. Do and how software vendors propose, create, and capture value from their cloud computing-enabled innovation strategy? This is the core research question this study aims to answer.

Our study used a multiple case research of 10 software vendors that operate in Germany and Austria. We conducted 28 in-depth interviews with top executives and added complementary archival records from these firms to understand how they integrate cloud computing technologies into their resource base and develop IT and organizational capabilities to transform their business model. Our thematic analysis of the data reveals a salient complementarity of software vendors' IT and organizational capabilities in reconfiguring their business model and executing a digital innovation strategy. This paper provides a conceptual model that explains this complementarity of IT and organizational capabilities theoretically. Specifically, we find that customer-centric offerings and customer relationships' intensification are crucial to redesign software vendors' customer value proposition. IT capabilities, business flexibility, and dynamic ecosystem architecture are the pathways to create value. Finally, software vendors capture value through improved cash flow management and adaptive revenue flows.

This paper contributes to IS research by the provision of a conceptual model that explains theoretically whether and how software vendors leverage cloud computing-enabled innovation for the digital boost. Our conceptual model suggests that software vendors use a complementary portfolio of IT and organizational capabilities to innovate in their value proposition, creation, and capture in a B2B context. The remainder of the paper is organized as follows. The second section provides the theoretical background using prior literature on cloud computing, digital innovation firm's strategy, and the capabilities required to execute this strategy. The second section concludes with the firm's business model's conceptualization and the evolution of the software vendors' business model. The third section explains the data, research design, and methodology used in this study. After that, we explain our findings that derive a conceptual model of the cloud computing-enabled software vendors' business model. Our paper ends with a discussion of the results and core conclusions.

Theoretical background

This section discusses the theoretical perspective used to analyze the base and complementarity of IT and organizational capabilities for digital innovation and related business model configuration of software vendors. To do so, we first define the digital infrastructure of cloud computing and describe its impact on software vendors' innovation practices. We then outline these capabilities' roles and specify the business model's organizing function from the perspective of the digital innovation strategy. Finally, we explain the implications and knowledge gaps that motivate us to pursue an empirical study on the cloud computing-enabled business model's role in software vendors' digital innovation.

Cloud computing: An integrated IT infrastructure driving digital transformation

IS research provides various perspectives to describe cloud computing's nature and its impact on software and business innovation (e.g., [START_REF] Fahmideh | A generic cloud migration process model[END_REF]. Technologically, cloud computing is specified as an integrated digital infrastructure combining various technological developments, such as large-scale computer data centers, virtualization, IT standardization, and a ubiquitous IT infrastructure. Cloud computing solutions provide numerous on demand software applications through the Internet. Cloud infrastructure centrally hosts and maintains data and applications that serve multiple clients at any time and from any place [START_REF] Krancher | Key affordances of platform-as-a-service: Self-organization and continuous feedback platform-as-a-service view project knowledge transfer in information systems outsourcing view project[END_REF]. [START_REF] Mell | The NIST definition of cloud computing recommendations of the national institute of standards and technology[END_REF] define cloud computing as a model for enabling ubiquitous, convenient, on demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.

Complementing the technological dimension, the business perspective on cloud computing considers its role in the digital transformation [START_REF] Kohli | Digital innovation: A review and synthesis[END_REF]. The proliferation of cloud computing across industries has profoundly changed how organizations store and share information [START_REF] Fischer | Strategy archetypes for digital transformation: Defining meta objectives using business process management[END_REF], and its disruptive nature made established innovation strategies redundant [START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF]. Digital innovation requires firms to develop and integrate new IT and organizational capabilities enabling the efficient deployment of cloud infrastructure in value-adding activities [START_REF] Helfat | Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems[END_REF][START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF][START_REF] Li | Dynamic information technology capability: Concept definition and framework development[END_REF].

However, cloud computing has profoundly changed business processes and organization modes on the user firm side, but it has likewise fundamentally transformed the software industry's modus operandi [START_REF] Armbrust | A view of cloud computing[END_REF][START_REF] Marston | Cloud computing: The business perspective[END_REF]. Already before the arrival of the digital transformation, software vendors' innovation strategies needed to account for organizational changes resulting from rapidly evolving industry conditions such as intense competitor rivalry, customer demands for flexible and customizable software [START_REF] Ratten | Continuance use intention of cloud computing: Innovativeness and creativity perspectives[END_REF][START_REF] Krancher | Key affordances of platform-as-a-service: Self-organization and continuous feedback platform-as-a-service view project knowledge transfer in information systems outsourcing view project[END_REF], and expectation to access state of the art technologies at affordable and predictable costs [START_REF] Kang | The persistency and volatility of the firm R&D investment: Revisited from the perspective of technological capability[END_REF]. Traditionally, software vendors commercialized software through on-site models, which produce in-house software solutions that were then shipped and deployed at customers' locations. Rapid IT advances, such as ubiquitously available bandwidth and modular software design, resulted in the evolution of digital infrastructure and the proliferation of cloud computing solutions [START_REF] Kang | The persistency and volatility of the firm R&D investment: Revisited from the perspective of technological capability[END_REF]. Consequently, software vendors transitioned their core technologies and business processes to the cloud computing model, selling and delivering software applications on demand and remotely [START_REF] Cheng | Cloud computing spot pricing dynamics: Latency and limits to arbitrage[END_REF].

The technological properties of cloud computing infrastructure initiated substantial software innovation changes [START_REF] Fahmideh | A generic cloud migration process model[END_REF]. The transition of software vendors to the digital innovation paradigm altered their supply-side and demand-side practices. Supply-side digital innovation practices comprise new IT and organizational capabilities to rapidly up-and downscale services on cloud infrastructure (e.g., [START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF][START_REF] Kathuria | A strategic value appropriation path for cloud computing[END_REF] and to increase the variety of integrated system functionalities [START_REF] Benlian | The transformative value of cloud computing: A decoupling, platformization, and recombination theoretical framework[END_REF]. Platform-based cloud solutions generate network effects and enable value cocreation with customers (Abrell et al., 2016). The instant provision and perpetual beta-state of cloud-hosted applications help software firms to reduce value chain activities and lower production costs. Demand-side digital innovation practices of software vendors comprise the agile adaptation of cloud applications to changing customer needs, differentiating the scope and speed of product and service innovation [START_REF] Constantinides | Platforms and infrastructures in the digital age[END_REF], and continuously improving the service quality through shorter software upgrading and maintenance cycles [START_REF] Ratten | Continuance use intention of cloud computing: Innovativeness and creativity perspectives[END_REF][START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF]. In summary, the digital transition to cloud computing requires software vendors to rethink their innovation strategy, develop their competitive resource base, and reconfigure their business models accordingly [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF][START_REF] Xiao | How a software vendor weathered the stormy journey to the cloud[END_REF].

Digital innovation strategy: Definition, implications, and required capabilities

Despite the transformative impact of digital technologies [START_REF] Benitez | How corporate social responsibility activities influence employer reputation: The role of social media capability[END_REF][START_REF] Lin | How do agribusinesses thrive through complexity? The pivotal role of e-commerce capability and business agility[END_REF] such as cloud computing on the software industry, we lack a comprehensive understanding of digital innovation as a coherent set of strategic choices of software vendors about how to do business in the digital age [START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF]. Research on digital innovation has predominantly taken the user firm perspective to examine the strategic implications of digital business transformation. In their review on digital innovation IS research, [START_REF] Kohli | Digital innovation: A review and synthesis[END_REF] demonstrate that the topic simultaneously evolves within several IS literature streams. [START_REF] Kohli | Digital innovation: A review and synthesis[END_REF] summarize the current understanding of digital innovation in a framework comprising external and internal organizational factors that influence four core firm activities of initiating, developing, implementing, and exploiting their respective product, service, and process outcomes. Besides, [START_REF] Hinings | Digital innovation and transformation: An institutional perspective[END_REF], [START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF][START_REF] Tian | The differential impact of types of app innovation on customer evaluation[END_REF] argue that digital innovation outcomes also include platforms (e.g., Uber) and business models (e.g., Netflix) beyond new products (e.g., e-books), processes (e.g., online banking), and services (e.g., software updates). Independent of specificities of digital value offerings, the digital transformation profoundly reshapes established innovation activities and strategies of software vendors and user firms [START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF][START_REF] Xiao | How a software vendor weathered the stormy journey to the cloud[END_REF].

Prior IS and strategy literature on the digital business transformation commonly highlights the importance of developing insights into the relation and complementarity between IT and organizational capabilities undergirding firm-level digital innovation (e.g., [START_REF] Busquets | Orchestrating smart business network dynamics for innovation[END_REF][START_REF] Yoo | Organizing for innovation in the digitized world[END_REF][START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Kohli | Digital innovation: A review and synthesis[END_REF]. For example, organizational capabilities represent a focal point for theorizing digital innovation strategy, as they constitute the competitive resource base enabling firms to appropriate business value from digital infrastructure [START_REF] Benitez | IT, proactive environmental strategy and firm performance: A resource-based analysis[END_REF]Helfat & Raubischeck, 2018;[START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF][START_REF] Li | Dynamic information technology capability: Concept definition and framework development[END_REF][START_REF] Mikalef | Exploring the relationship between big data analytics capability and competitive performance: The mediating roles of dynamic and operational capabilities[END_REF]. The digital transformation induces significant changes in a broad range of IT and organizational capabilities undergirding firms' value-adding activities (e.g., [START_REF] Constantinides | Platforms and infrastructures in the digital age[END_REF]. The required IT and organizational capabilities can be operational, dynamic, or dualpurpose [START_REF] Benitez | Impact of information technology infrastructure flexibility on mergers and acquisitions[END_REF]. The effective deployment of cloud computing supposes that firms need to adapt their entire IT and organizational capability base to create and capture digitally enhanced value [START_REF] Xiao | How a software vendor weathered the stormy journey to the cloud[END_REF]. Table 1 summarizes some of the most relevant IS and strategy literature on digital innovation strategy in software vendors and user firms.

Our synthesis shows that digital innovation requires interdependent and complementary capabilities that enable firms to coordinate distributed agency and complementarities, deploy digital infrastructure in value-adding activities, and balance innovation tensions in digital contexts. Digital innovation is grounded in developing cognitive and collaborative capabilities, enabling executives to understand digital technologies' properties, and coordinate digitally enhanced value-adding activities [START_REF] Eggers | Cognition and capabilities: A multi-level perspective[END_REF][START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF]. Specifically, smaller software vendors need to build collaborative capabilities to leverage external knowledge, foster communities, involve users, and profit from design and programming expertise in software development [START_REF] Rose | An integrated model of innovation drivers for smaller software firms[END_REF]. Furthermore, digital innovation leads to identity shifts in firms and organizational cultures, requiring integrative capabilities to balance competing concerns in existing versus emerging innovation strategies and practices [START_REF] Svahn | Embracing digital innovation in incumbent firms: How Volvo cars managed competing concerns[END_REF]. Digital innovation requires communication and transaction capabilities to manage network effects in distributed value chains [START_REF] Scott | The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services[END_REF][START_REF] Tian | The differential impact of types of app innovation on customer evaluation[END_REF]. Finally, the distributed nature of digital infrastructures such as cloud computing results in the challenge of orchestrating multiple actors, for which software firms need capabilities to configure effective business models [START_REF] Battleson | Achieving dynamic capabilities with cloud computing: An empirical investigation[END_REF]Helfat & Raubischek, 2018).

Conceptualization of the firm's business model and evolution of the business model of the software vendors

The construct of the business model has been traditionally investigated in strategy research. This research topic has benefited from a theoretical debate about what a business model is and how it is connected with the firm's corporate and business strategies [START_REF] Zott | The business model: Recent developments and future research[END_REF][START_REF] Massa | A critical assessment of business model research[END_REF].

"The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management's hypothesis about what customers want, how they want it, and

how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit" (Teece, 2010, p. 172). The firm's business model refers to how a company functions and how it makes business [START_REF] Massa | A critical assessment of business model research[END_REF]. Drawn from prior business model research, we can conclude that a business model's three key ingredients are the firm's value proposition, value creation, and value capture [START_REF] Foss | Fifteen years of research on business model innovation: How far have we come, and where should we go[END_REF][START_REF] Massa | A critical assessment of business model research[END_REF]. The value proposition refers to product and service offering that firms propose to customers [START_REF] Teece | Business models, business strategy and innovation[END_REF]. Value creation refers to the degree to which the value proposition aligns with what customers want and how they want it to satisfy their needs [START_REF] Foss | Fifteen years of research on business model innovation: How far have we come, and where should we go[END_REF]. The value capture is the firm's appropriation and returns on investment obtained by the firm in compensation to the value proposition and offer [START_REF] Teece | Business models, business strategy and innovation[END_REF].

Extant research provides some evidence for changes affecting software vendors' resources and activities during their business model transition to cloud infrastructure [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Xiao | How a software vendor weathered the stormy journey to the cloud[END_REF]. The digital transition to the cloud induced a radical change in commercializing software by offering IT outsourcing, variable IT costs, reduced IT complexity, and flexible customization [START_REF] Khanagha | Business model renewal and ambidexterity: Structural alteration and strategy formation process during transition to a cloud business model[END_REF]. Outsourcing of software functions and expertise allows user firms to focus on their core competencies [START_REF] Schneider | Determinant factors of cloud-sourcing decisions: Reflecting on the IT outsourcing literature in the era of cloud computing[END_REF] and benefit from converting fixed into variable IT costs. IT complexity is reduced by central maintenance of cloud applications [START_REF] Kranz | Understanding the influence of absorptive capacity and ambidexterity on the process of business model change: The case of on-premise and cloudcomputing software[END_REF], and real-time user analytics allow customization of cloud solutions. Changes in value-creating software vendors activities comprise developing integrated service delivery solutions [START_REF] Baird | Associating consumer perceived value with business models for digital services[END_REF][START_REF] Schneider | Determinant factors of cloud-sourcing decisions: Reflecting on the IT outsourcing literature in the era of cloud computing[END_REF] and dynamic upand downscaling capabilities [START_REF] Hacklin | Strategies for business model innovation: How firms reel in migrating value[END_REF][START_REF] Kathuria | A strategic value appropriation path for cloud computing[END_REF]. Data security assurance, zero downtime [START_REF] Khanagha | Business model renewal and ambidexterity: Structural alteration and strategy formation process during transition to a cloud business model[END_REF], and orchestrating interactions between multiple IT partners and customers constitute further critical activities to run cloud services. Finally, software vendors move to subscription-based revenue streams, integrating usage-based metrics, and automated online sales of their cloud offerings [START_REF] Pussep | Results of the German Software Industry Survey[END_REF][START_REF] Cheng | Cloud computing spot pricing dynamics: Latency and limits to arbitrage[END_REF][START_REF] Naldi | Economic decision criteria for the migration to cloud storage[END_REF], while economies of scale and network effects reduce software development costs. However, while extant studies surface on these cloud-induced changes of software vendors' resources and activities, they do not elaborate further on the cloud computing-enabled digital innovation of software vendors.

In a longitudinal case research, [START_REF] Xiao | How a software vendor weathered the stormy journey to the cloud[END_REF] examined the transition of leading software vendors to cloud computing. Their research shows that the digital transition not only transforms the software vendors' business model, but major challenges result from organizational changes that need to be handled internally and in the firm's ecosystem to effectively deploy cloud services. [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF] identified B2B IT and business capabilities and studied their role in cloud platform ecosystems. Their findings provide a business model framework surfacing four effective configurations of complementary IT and business capabilities. IT capabilities comprise customization (creating and transforming services, onboarding, integration, support, and IT consulting) and process standardization (design and modularize architecture, operating platform and infrastructure, and complement and manage platform services). Business capabilities contain incentives and rules, ecosystem marketing and sales, and partner development and support. [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF] acknowledge that their findings cannot be considered exhaustive and encourage further IS research on the complementarity of IT and organizational capabilities in software vendors' digital evolution. In this sense, additional IS research is needed on whether and how software vendors have assimilated and leveraged cloud computing to innovate digitally and transform their value proposition, creation, and appropriation. We try to fill this gap in this study.

Data and research method

We conducted a multiple case research to study and pursue our general research goal. A case research design is appropriate when the study focuses on whether, how, why, and it explores what questions are required to investigate a phenomenon of interest in its real-life context [START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF][START_REF] Yin | Case study research: Design and methods[END_REF]. We referred to the definitions of firm-level capabilities as abilities to undertake specific activities [START_REF] Helfat | Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems[END_REF] and to the business model's strategic function as the framework or model of organization [START_REF] Massa | A critical assessment of business model research[END_REF][START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF] to examine value-adding activities in the digital innovation of software vendors. Capabilities remain hidden or latent until they become tangible and observable in activities [START_REF] Teece | Business models, business strategy and innovation[END_REF][START_REF] Hess | Options for formulating a digital transformation strategy[END_REF].

Consequentially, firm-level activities and related processes reflect inherent capabilities to leverage digital technologies for value creation, appropriation, and capture. We examine the complementarity of IT and organizational capabilities that underly the identified activities within and across the sampled firms to develop a conceptual model of cloud computing-enabled innovation for software vendors' digital boost.

We focused specifically on managerial perspectives about salient firm-level innovation activities and processes that manifest in the development of cloud-based software solutions. The epistemological position informs this investigative focus of symbolic interaction [START_REF] Blumer | Symbolic interactionism: Perspective and method[END_REF], an approach to studying subjective theories of study informants through their accounts of experiences made in lived reality. This approach allowed us to look at the social distribution of respondents' perspectives on relevant activities and their underlying IT and organizational capabilities in the sampled software vendors' business model transformation. The guiding assumption for the analytic approach is that the software industry's digital transformation creates a substantial change to which firms respond by the development of digital innovation strategies.

The relevant IT and organizational capabilities and their complementarity become salient in verbal and textual accounts of top executives responsible for the development of cloud-enabled software solutions. Study respondents reported to us during in-depth interviews and provided complementary written records on how they established value-adding activities and configured the business model of cloud solutions to seize market opportunities in the digital transformation.

Sampling logic

We followed a purposive sampling strategy to identify cloud computing technology configurations and capabilities in software vendors' digital innovation [START_REF] Patton | Qualitative research and evaluation methods: Integrating theory and practice[END_REF]. Purposive sampling relies on selecting cases according to their potential to provide theoretical inferences for the phenomenon of interest from the collected evidence [START_REF] Flick | An introduction to qualitative research: Theory, method and applications[END_REF]. The development of inferences for a group-specific perspective on IT and organizational capabilities in the cloud computing-enabled business model required us to meet two conditions. First, the collected evidence must be comparable, and second, it must contain a range of experiences that represent managerial perspectives for the phenomenon under study [START_REF] Flick | An introduction to qualitative research: Theory, method and applications[END_REF]. Consequently, our sample combines two subsets of large and small software vendors to identify software vendors managers' group-level perspectives on business model configurations and related innovation activities across distinct organizational settings and variations in resources and market positions [START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF]. We pursued a theoretical sampling approach within the two subsets to develop theoretical inferences for key dimensions (i.e., capabilities) concerning the deployment of cloud-based product and service offerings. We contacted respondents purposively based on their professional positions and their potential abilities to address this study's questions [START_REF] Eisenhardt | Building theories from case study research[END_REF][START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF]. In consequence, the combination of a priori contrasting sampling subsets of large and small vendors and successive theoretical sampling of respondents within the selected software vendors helps to improve the validity of our findings, as these procedures ensure to comprehensively examine possible variations or replications in data patterns deriving from the distinct cases [START_REF] Patton | Qualitative research and evaluation methods: Integrating theory and practice[END_REF][START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF]. As a result of our sampling procedures, we collected evidence from 10 software vendors that provide cloud solutions in Germany and Austria. We did not compare the actions of the individual software vendors. Table 2 displays the selected software vendors and interview respondents in the study. Our data collection combines several sources of evidence for each case software vendor.

Between mid-2015 and mid-2017, we conducted 28 interviews in two consecutive rounds with 18 senior managers from the selected case firms (Table 2). In the first round, we organized 18 indepth face-to-face interviews with senior managers responsible for digital innovation in the sample firms. As face-to-face interview situations allow establishing trust between interviewers and respondents, they increase the chance to collect detailed and meaningful insights for the research subject [START_REF] Song | Impact of the usage of social media in the workplace on team and employee performance[END_REF]. The interviews lasted 60 min on average. We recorded and transcribed all interviews and added written notes during the conversations for in-depth coding of the data. After the first data analysis round, we conducted 10 follow-up interviews providing us with additional insights into salient sets of resources and activities in cloud solution projects. To ensure confidentiality, we disguised the identities of firms and respondents in the study.

We used a semi-structured interview guide to frame our theory-informed questions concerning the IT and organizational capabilities and respective business model configurations in emerging cloud solutions. The questions of the semi-structured interview guideline are structured within five consecutive parts to inquire our research topic, namely: 1) entering the interview and biographical data of respondent; 2) understanding of cloud computing as part of digital innovation strategy; 3) inquiring about cloud computing and respective business model configuration; 4) specifying core IT and organizational capabilities in cloud computing; and 5) finalizing the interview with other important facets of the topic. The interview guide has been omitted for the sake of brevity. It is available from the corresponding author upon request.

Complementing the interview data, the sample firms provided us with a range of written records relating to their cloud solution development and digital innovation strategy. These records comprise internal and external strategy documents, presentations, and documentation about cloud solutions and other ongoing digital innovation projects. Where possible, we included this complementary evidence in our data analysis, thereby allowing us to mitigate potential biases in the verbal accounts of interview respondents by triangulating our findings in the analytic process [START_REF] Yin | Case study research: Design and methods[END_REF]. The data triangulation provides a more robust corroborative strategy for interpreting evidence in each case and creates a convergence of the identified cross-case dimensions in the data [START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF]. Data triangulation strengthens the reliability and validity of the study findings [START_REF] Patton | Qualitative research and evaluation methods: Integrating theory and practice[END_REF].

Coding methodology

As our research interest focused on firm-level perspectives about combinations of cloud infrastructure and organizational technologies in cloud-based software solutions, we coded the evidence in a two-step thematic analysis. The thematic analysis provides an effective method to identify salient patterns in diverse sets of verbal and textual accounts on a specific theme and surface representation of higher-level thematic domains [START_REF] Flick | An introduction to qualitative research: Theory, method and applications[END_REF][START_REF] Clarke | Thematic analysis[END_REF]. We followed in a first step open and selective coding procedures to develop a category system and to identify salient patterns and potential themes at the single-case level. We then observed patterns and emergent themes across the data sets provided by the sampled cases. The emerging thematic structure from the first step helped us establish the portfolio of IT and organizational capabilities in the cloud solutions to specify the study results' central thematic domains [START_REF] Flick | An introduction to qualitative research: Theory, method and applications[END_REF]. While our purposive sampling strategy combined large and small software vendors to capture a grouplevel perspective of software vendors' managers across distinct organizational settings and variations in resources and market positions, our coding procedure surfaces a converging thematic structure for the central IT and organizational capabilities involving the cloud computing-enabled business model. Throughout the coding process, we ensured trustworthiness by two researchers agreeing on the coding approach, independently coding the data, and frequently discussing results until they reached a consensus on the thematic domains [START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF]. In the final analytical stage, we built the model from the thematic structure.

An important aspect for assuring the validity of the proposed model is to specify how the themes emerging from the thematic coding of the data at single case level constitute the further coding process thematic categories representing insights for the phenomenon of interest [START_REF] Flick | An introduction to qualitative research: Theory, method and applications[END_REF]. To describe how exemplary the coding procedure leads consecutively to the model's aggregate dimensions, we give two examples. One respondent provided the following description of the flexibility of cloud infrastructure: "One of our customers uses our solution to consolidate or eliminate several legacy systems. Instead of managing numerous complex systems, cloud computing provides such customers with functionality and flexibility thanks to the ease of adding or removing services without having to change the whole architecture" (Vice President of Cloud Computing of the company I).

Here, the respondent emphasized the importance of cloud computing's modular technological architecture to provide customer value with its cloud solution. We coded this statement as the first-order concepts integration of service modules based on customer needs and to eliminate work related to managing software. We assigned these first-order codes during the further coding process to the second-order thematic categories of modularity and increased customer flexibility.

In our coding's final analytical step, we assigned modularity and increased customer flexibility to the aggregate dimension customer-centric offering. A second interview excerpt from another respondent reads as follows: "Cloud solutions are highly specialized solutions. Especially when there is a high fluctuation of resource requests, some internal experts are needed" (CEO of company B). In this statement, the respondent points to the specificities of IT expertise in cloud computing. We coded this statement in an initial step as the first-order concept skills to anticipate the customer's future resource needs, and then, we assigned it to the second-order thematic category of integration capabilities. Ultimately, we placed this second-order theme into the aggregate dimension (i.e., capability) of developing technological (IT) capabilities.

We finally sorted the seven dimensions (IT and organizational capabilities) to the three architectural business model components of value proposition, value creation, and value capture, which we deduced a priori from the existing theory on business models (e.g., [START_REF] Foss | Fifteen years of research on business model innovation: How far have we come, and where should we go[END_REF][START_REF] Massa | A critical assessment of business model research[END_REF]. We applied Gioia et al.'s categorization approach to present our findings with rigor and relevance [START_REF] Gioia | Seeking qualitative rigor in inductive research: Notes on the Gioia methodology[END_REF]. We present the conceptual model and the underlying structure of salient first-level concepts, resultant second-order themes, and the seven aggregate dimensions (IT and organizational capabilities) surfacing from our coding procedure in the next section.

Results and findings of the study

Our thematic analysis of the evidence reveals seven dimensions that represent a portfolio of seven IT and organizational capabilities, which commonly surface in cloud computing-enabled business model configurations of the sampled software vendors. They are customer-centric offerings, intensifying customer relationships, developing technological (IT) capabilities, business flexibility, creating a dynamic ecosystem architecture, improved cash flow management, and adaptive revenue flows. Figure 1 shows the resultant conceptual model of the cloud computingenabled business model innovation of software vendors, detailing the seven IT and organizational capabilities, their embedded components, and their interrelated configuration in the three architectural components of value proposition, value creation, and value capture. Our evidence shows that software vendors focus on developing customer-centric offerings and intensifying customer relationships in the cloud-computing enabled business model to propose customer value. Figure 2 summarizes our findings' categorization structure for the value proposition component, and Table 3 provides representative quotes from the evidence supporting the interpretation of the second-order themes.

Customercentric offerings (A)

A.1) Customers require locationindependent and real-time access that leads to increased flexibility. A.2) Besides improving business mobility, the potential to generate and analyze data in real time is a major success factor. A.3) The modularity of cloud computing solutions is a key success factor. Company B's product considerably simplifies mobile app development because it allows customers to build mobile apps by choosing from various modular components. A.4) Company F emphasized that customers benefit from the highest possible legal compliance levels when using the firm's online shift planner solution. A.5) Location independence, realtime access, modularity, and compliance fulfillment build the important capability of customer flexibility.

"Cloud computing allows one to work in virtual teams, which means that it no longer matters where the employees are. Cloud computing makes data accessible from anywhere and at any time" (Product Manager of company B). "I think that the most important aspect of cloud computing is highly improved speed. A very simple example: a few years ago, building a nice corporate website took up to three months. Nowadays you need at worst three days. There are cloud-based software programs that take employee information from LinkedIn or corporate information from newspapers" (Product Developer of company F). "Our solution allows customers to simply drag and drop modules such as a Facebook interface into their development project to build tailored apps. Everything is pre-configured, and the whole process to connect the front-end is fully automated, which not only significantly reduces coding failures but also enables scalability of the complete app development process for our customers" (CEO of company B). "Day-care centers must prove that there is at least one teacher in each shift to ensure insurance coverage. In this context, our solution features a pop-up that specifically asks to confirm the presence of a teacher, enabling continuous legal compliance for customers via only one click" (CEO of company F). "One of our customers uses our solution to consolidate or eliminate several legacy systems. Instead of managing numerous complex systems, cloud computing provides such customers with functionality and flexibility thanks to the ease of adding or removing services without having to change the whole architecture" (Vice President of company J).

Furthermore, comprehensive user behavior analytics allow us to measure behavioral items such as user adoption of new features and identify application bundles deficiencies. Thus, real-time analytics provided the basis for continuous quality improvement in cloud computing: "We see that, while we operate with the solution, and it is also a great opportunity to change, adapt, or disable things not used (by customers). Now we see what is happening; now we can intervene" (Vice President of company D). Cloud infrastructure also allows software vendors to intensify their customer relationships. The ease-of-use of many cloud technologies helps to expand the customer base rapidly. As a result, software vendors need to balance advanced functionality with a neat interface design: "Once you have identified the key features that customers desire, it is essential to maintain a simple and self-explaining front-end operation for customers without adding feature by feature and thus increasing complexity both for clients and for us as the vendor" (CEO of company F).

Besides, software vendors engage in extensive educational work when approaching customer firms. Concerns arise on security and loss of control over data, as the quote below reflects: "What we need to ensure is that customers understand that cloud computing makes their data more secure owing to well-secured server farms, frequent data backups, more efficient data administration, and constant and on-demand availability. Still, an enormous amount of time and effort is required to convince customers" (CEO of company D). To sum up, we find that developing customer-centric offerings and intensifying customer relationships are vital capabilities to provide new value with cloud computing services. Integrating direct customer feedback enables software vendors to propose customer value through rapid update cycles for their cloud solution offerings. However, developing these capabilities requires software vendors to adapt to established value chain architectures in software development.

Do software vendors create value?

Our evidence shows that resource and activity requirements for value creation from cloud solutions profoundly impact software firms' established project routines and sales and support structures. We specifically identify developing technological (IT) capabilities, business flexibility, and creating a dynamic ecosystem architecture as central IT and organizational capabilities supporting the digital transition of software vendors' product and service offerings to cloud infrastructure. Figure 3 and Table 4 include our results related to software vendors' IT and organizational capabilities to leverage cloud computing for value creation.

Figure 3: IT and organizational capabilities for leveraging cloud computing for value creation

Our analysis reveals that software vendors fully embrace the shift of responsibilities in cloud computing solutions, often acting as an outsourced IT department for their customers. Concerning IT challenges, scalable architectures' importance to ensure resource efficiency and flexible cloud solutions adjustments become salient in our analysis. Furthermore, the modular infrastructure of cloud computing requires software vendors to develop IT capabilities for instant resource upscaling of when the system load increases and downscaling when it decreases, as the following quote illustrates: "The whole architecture must be built in a way that the application and the infrastructure layers are completely synchronized. What we need is an automated layer in between that facilitates on-demand upscaling or downscaling, depending on the resources the application requires, without our manual interference" (CEO of company G). "Vendors had traditionally handed over most of the responsibilities to consumers, internal or external partners when the deal was closed. This has certainly changed in times of cloud computing, in which vendors must ensure enough subscription renewals. In sum, we must improve our capabilities" (Vice President of the company I). "Cloud solutions are highly specialized solutions. Especially when there is a high fluctuation of resource requests, some internal experts are needed" (CEO of company B). "The knowledge and the expertise by taking care of that many databases are huge. We are better prepared for any attack than the companies, which have to take their data onto their servers themselves" (Product Manager of company A).

Business flexibility (D)

D.1) Transition toward efficient online sales and marketing structures based on cloud technology. D.

2) The promotion of a company-wide change of mind to address the specifics of cloud computing. D.3) Changing roles in cloud computing deployment represents an important aspect. We found that managers perceive a reallocation of IT responsibilities on their customers' side, which considerably changes the way software vendors approach customers. D.4) Centralized hosting and cloud computing architecture enhance customer relationships and enable software vendors to respond to customer feedback by continually updating integrated applications rapidly.

"When we talk about cloud computing and a cheap product, usually you do not have a sales representative, just a few. The marketing and the sales should be done online, electronically. You would rather push everything in marketing rather than sales" (Product Manager of company A). "Cloud computing enables all our customers to benefit from rapid update cycles, be it SMEs or large corporations. This was simply not possible in the on-premise era, in which each customer had their version management, foreclosing any synergies for both customers and vendors" (CEO of company D). "The head of marketing, the sales manager, or the chief buyer has a much stronger influence on IT budgets, which, in turn, implies that the solution we offer must be tailored to their specific requirements. Things that were of importance for IT, such as process and data consistency, are no longer of any interest to them; they want the right solutions" (Vice President of the company I). "Such collaborations have existed for a long time already, but what makes it so special in times of cloud computing is the fact that even the smallest players can provide instant value-added that reaches all customers in the context of a cloud ecosystem" (Vice President of the company I).

Dynamic ecosystem architecture (E)

E.1) The promotion of a certain openness of cloud computing solutions is a key success factor. Opening the cloud computing system allows customers and competitors to adapt selected aspects. E.2) Partnering with well-established "On the one hand, our cloud computing solutions are already a kind of platform. We provide a special service, and our customers can use it to the desired extent. On the other hand, it is possible to offer every software as a cloud computing service. A certain openness of our software allows an adaptation that is required by many customers" (CEO of company H). "We offer a great electronic personnel file, but another vendor develops the cloud providers to increase trust is an important success factor. Furthermore, this leads to collaboration platforms for customers and partners who create lockin effects. E.3) Company C considers network effects a very important success factor to extend customer segments and increase customer loyalty.

corresponding accounting system. If all of these applications communicate with one another, it would be an effective and complete solution with real value-added. This necessitates specific interfaces and high standardization, which is not yet present" (CEO of company G).

"We have established a collaboration platform for our cloud solutions that enables farmers to save their data on the platform, which is then accessed and utilized by contractors or machinery rings. Thus, different parties can share information in real-time, leading to network effects that, in any case, reach a critical mass and thus enable important binding effects" (Senior Manager of company C).

Our evidence surfaces the critical role of support for cloud computing provisions. Many respondents express concerns about the complexity inherent in cloud support and sales activities, which contradicts cloud solutions' aspired simplicity. In consequence, several software vendors envisage separating their on-site and cloud computing businesses. As the quotes below show, a two-tier strategy is considered a viable option to distinguish support-intensive project management and lean designed cloud solutions: "Cloud computing offerings only make sense if they imply no project characteristics, that is, when they offer customers the option to carry out self-contained tasks without a need for an explanation" (CEO of company F).

Our results also suggest that cloud computing solutions create considerable operational and IT challenges for software vendors, as they imply profound changes to sales and support structures, developing new mindsets, changing customer roles, and the effective handling of scalability aspects. One common strategy surfacing from the data is moving marketing and sales processes of cloud computing solutions from personal contacts toward web-based solutions. However, this move requires the cognitive adaptation of sales teams. This adaptation of mindsets is a difficult task to implement, as this quote illustrates: "Our sales teams used to present at customer sites, nowadays it is more about talking to customers on the phone. There is a shift from a face-to-facedriven business towards a marketing-driven one" (CEO of company G). "It is incredibly challenging to familiarize your sales staff with the new model, considering that their perception completely changes when selling services worth sixty to one hundred and twenty euro per month instead of working on a commission basis when selling licenses worth a hundred thousand euros"

(CEO of company D). Software vendors often struggle to handle this challenge. As contracts' conclusion entails considerable sales expenses, subscription models at a month's notice risk creating imbalances between customer lifetime value and sales expenses. Focusing on efficient sales structures and including customer self-service are prominent aspects, as mentioned in the following evidence: "There is great potential concerning sales automation and efficiency. We want our customers to use our self-service offerings on the website, to speed the whole sales process while reducing our expenses" (CEO of company E). not yet tapped its full potential: "I strongly believe that you need to build a sense of teamwork among vendors so that they set up clear interfaces between their offerings, which then creates a win-win situation by delivering customer value" (CEO of company D). In conclusion, we found that software vendors leverage the complementarity of IT capabilities, business flexibility, and the creation of a dynamic network architecture to attract and retain customers for their cloud solutions.

Do software vendors capture value?

Our evidence shows that software vendors develop capabilities to align and complement their revenue logic with cloud computing to commercialize services. We find that software vendors use leverage and complement two unique capabilities: improved cash flow management and adaptive revenue flow (Figure 4 and Table 5). Pricing strategies revolve around pricing metrics, such as price-per-user or features that build on free but time-limited testing phases to attract customers. Over time, software vendors become capable of offering customers moving from fixed costs into variable costs. Our data analysis reveals that cloud computing solutions' one-to-many approach produces substantial economies of scale effects in software vendors' cost structures. However, these economies of scale incur higher initial costs for marketing and customer acquisition. Software vendors frequently encounter the challenge that customers hesitate to switch to cloud solutions, creating, in turn, considerable transaction costs, as the following quote illustrates: "Initially, we have two kinds of expenses. First, we must convince a customer to use cloud computing in the first place; in a second step, we must convince them of the product's benefits" (CEO of company F). "We offer a tool that allows an analysis of clicks and revenues. We give our customers the possibility to get an analysis of their customers online. They can see the effectiveness of clicks" (Product Manager of company E).

"The development and test phase for software is extremely time and cost-intensive. However, after this process, we can offer a software product that many business firms can use. Consequentially, we achieve the break-even point faster when we sell the software as often as possible in a certain period " (CEO of company B).

Adaptive revenue flows (G)

G.1) Software vendors can achieve a value cocreation process with customers during the value creation process and are in the position to determine customer-centric (and flexible) pricing strategies. G.2) We identified a danger in cloud computing solutions: that customers equate lower software costs per license with lower total costs for the provision of software services. This requires active cash flow management for being successful in the long term. G.3) Service and support can be a complementary source of income if software firms built the capabilities to support their customers.

"The most important thing is to offer a pricing model that depicts customers' processes and thus allows for maximum flexibility. If you introduce pricing components such as per shift or unit, it could easily happen that you exclude half of your existing customer base" (CEO of company F). "Our old on-premise solution costs at least 2500€ for the very basic version. For freelancers or even private users, this is a huge investment to get started. Of course, this is an entry barrier, which leads to software piracy. Besides this, software piracy is no longer technologically possible because there is no software to download and install" (Product Manager of company A). "It's a well-known phenomenon: once customers think that the solutions are cheap, they expect everything else such as support also to be cheap. However, the support must always be of better quality, and this is costly" (CEO of company D).

The increasing demand of customer firms to outsource their IT operations to cloud computing providers creates the expectation of providing 24/7 service support. As software vendors traditionally do not offer this support, they must overhaul their established support systems.

Adding support capabilities for cloud solutions increases costs and counteracts intended cost efficiencies in sales structures. The evidence also suggests the importance of having a transparent price policy, which flexibly aligns with usage-based consumption. For example, companies C and F developed pricing models that consider customers' seasonal business fluctuations. Company F charges a flat price of 1€ per user per shift, allowing customers in markets to cushion personnel fluctuations during seasonal changes. The introduction of usage-based cloud pricing models is, however, often unwarranted as customers prefer out of habit to calculate fixed prices for fixed periods to ensure cost predictability: "The usage-based model allows our customers to benefit from several things: they could terminate whenever they want, they are charged on a minutebased price. However, they still prefer to know in advance what they have to calculate on, instead of considering that they could probably save half of the price" (CEO of company D).

While cloud solutions create long-term economies of scale, our evidence shows that a precondition for achieving positive cash flows is to gain short-term network effects by establishing a growing customer base. The following quote illustrates this pressure of software vendors to grow the customer base exponentially so that the cash flow remains balanced:

"Sometimes, it is not even about being better than your competitors; it is about quickly establishing your solution in the market. If you do not get enough people aboard or if you switch too quickly, there is a risk that you can no longer balance your cash-flows" (CEO of company D). In summary, we find that the value capture of software vendors that provide cloud solutions engages in improved cash flow management and adaptive revenue flows. The value capture of the cloud computing-enabled business model depends on combining internal firm decisions to develop capabilities, investing in required resources, and risk-taking in pushing rapid customer adoption of cloud solutions with limited control over short-term revenues.

Discussion and core conclusions

Research goal's follow-up and summary of results

Firms' strategic choices about complementing digital technologies and capabilities in valueadding activities represent an essential aspect of theory building on digital innovation [START_REF] Kohli | Digital innovation: A review and synthesis[END_REF][START_REF] Fischer | Strategy archetypes for digital transformation: Defining meta objectives using business process management[END_REF]. This study examines whether (and in positive cases, how) software vendors propose, create, and capture value from their cloud computing-enabled innovation strategy. Our multiple case analysis comprised 10 software vendors that operate in Germany and Austria. We conducted 28 in-depth interviews with top executives and added complementary archival records from these firms to understand how they integrate cloud computing technologies into their resource base and develop IT and organizational capabilities to transform their business model. The thematic analysis reveals a salient complementarity of software vendors' IT and organizational capabilities in reconfiguring their business model and executing a digital innovation strategy. We provide a conceptual model that explains this complementarity of IT and organizational capabilities theoretically. We find that customer-centric offerings and customer relationships' intensification are crucial to redesign software vendors' customer value proposition. IT capabilities, business flexibility, and dynamic ecosystem architecture are the pathways to create value. Finally, software vendors capture value through improved cash flow management and adaptive revenue flows.

Incremental contributions to IS research

Drawn on the literature of business models, digital innovation, and firms' capabilities, this study makes two key contributions to IS research. First, digital innovation is the creation or change of market offerings, business processes, and business models that result from digital technologies [START_REF] Nambisan | Digital innovation management: Reinventing innovation management research in a digital world[END_REF]. Prior research on digital innovation has mainly focused on conceptualizing digital innovation firms' initiatives and strategies (e.g., [START_REF] Svahn | Embracing digital innovation in incumbent firms: How Volvo cars managed competing concerns[END_REF] and highlighting the relevance of orchestrating complementarities in the business partnerships ecosystem (e.g., [START_REF] Teece | Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world[END_REF]. The main unit of analysis has been the user firm. However, many companies must outsource partially or totally their resource base and capabilities for digital innovation, working with software vendors (e.g., [START_REF] Schneider | Determinant factors of cloud-sourcing decisions: Reflecting on the IT outsourcing literature in the era of cloud computing[END_REF]. Drawn on this prior literature on digital innovation, we focus on the software vendors, a unit of analysis less explored on this research topic [START_REF] Giessmann | Designing business models for cloud platforms[END_REF]. This study provides a conceptual model that explains theoretically whether and how software vendors leverage cloud computingenabled innovation for the digital boost. Specifically, our conceptual model explains theoretically how software vendors have transformed their business models in the integration and assimilation of cloud computing through the complementary portfolio of IT and organizational capabilities. This is the primary contribution of this paper to IS research.

Second, we draw on prior IS research on cloud computing-enabled business model transformation (e.g., [START_REF] Hahn | Business and IT capabilities for cloud platform success[END_REF][START_REF] Benlian | The transformative value of cloud computing: A decoupling, platformization, and recombination theoretical framework[END_REF][START_REF] Kathuria | A strategic value appropriation path for cloud computing[END_REF][START_REF] Xiao | How a software vendor weathered the stormy journey to the cloud[END_REF] to explain whether and how software vendors can leverage cloud computing to transform their value proposition, value creation, and value capture. We find and argue that software vendors require customer-centric offerings and customer relationships' intensification to redesign the customer value proposition. IT capabilities, business flexibility, and dynamic ecosystem architecture are the pathways to transform value creation. Finally, our conceptual model suggests that software vendors can transform the way they capture value through improved cash flow management and adaptive revenue flows. This complementary portfolio of IT and organizational capabilities to transform value proposition, creation, and capture (i.e., the three key ingredients of a business model) constitutes a contribution to the business model literature and the second contribution of this paper. Our findings and contributions are consistent with Hahn et al.'s (2016) and Kathuria et al.'s (2018) arguments of combining technology and business capabilities to navigate theoretically in IS research on cloud computing.

Lessons learned to software vendor's executives, and IT and business executives

Our study provides several lessons learned to software vendor executives and IT and business executives. Software vendors have transitioned their core technologies and business processes to the cloud computing model, selling and delivering software applications on demand and remotely. This digital transition to cloud computing requires software vendors to rethink their innovation strategy, develop their competitive resource base, and reconfigure their business models accordingly. First, this study provides software vendor executives with a conceptual model that explains how their companies can leverage cloud computing-enabled innovation strategies for the digital boost. Second and specifically, this study explains to these software vendors' executives how to reconfigure and transform their customer value proposition, creation, and capture. Software vendors can leverage customer-centric offerings and the intensification of customer relationships to redesign the customer value proposition. These providers can develop new IT capabilities, use business flexibility, and leverage the dynamic ecosystem architecture to transform value creation. Our conceptual model also suggests software vendors improved cash flow management and adaptive revenue flows as the mechanisms to capture value. Finally, our research highlights IT and business executives the critical role of software vendors, cloud computing, and the complementarity of IT and organizational capabilities to design and execute their digital business transformation firm's initiatives successfully.

Limitations and future opportunities for IS research

We have carefully designed and documented the procedures to ensure that our study complies with the common methodological criteria for theory building in multiple case study research.

Nonetheless, our study has some limitations which present opportunities for future IS research.

Interview data potentially faces the problems of impression management and retrospective sensemaking on the part of respondents. We address these potential biases by critically evaluating respondents' claims' credibility with a triangulation of the complementary sources [START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF][START_REF] Flick | An introduction to qualitative research: Theory, method and applications[END_REF]. While we pursue a purposive sampling strategy to identify the complementarity of IT and organizational capabilities to leverage cloud computing in software vendors' digital innovation, the collected evidence remains limited in size [START_REF] Patton | Qualitative research and evaluation methods: Integrating theory and practice[END_REF].

However, our study's objective is not to generalize findings to a statistically relevant population but to explore whether and how software vendors propose, create, and capture value through cloud computing-enabled innovation for the digital boost. Second, we recognize that case research and the resultant conceptual model is not appropriate for making causal claims [START_REF] Eisenhardt | Theory building from cases: Opportunities and challenges[END_REF][START_REF] Yin | Case study research: Design and methods[END_REF]. In this respect, our conceptual model offers the theoretical foundations for future IS research to test the weight (i.e., importance) of the ingredients of each IT and organizational capability in shaping digital innovation of software vendors (i.e., the recipe, e.g., Benitez et al., 2020c). Future IS research can also test if the ingredients (potentially measurements) and the relationships derived (potential hypotheses) from the conceptual model are supported on a quantitative research study. Furthermore, we suggest complementing our study beyond the specific setting of the software industry to broader contexts of digital innovation in dynamically evolving ecosystems in which value is often cocreated in close collaborations between software vendors and customer firms.

The research topics on digital innovation and digital business transformation present several promising avenues for future IS research. First, our study focuses on the impact of cloud computing in the business model innovation of software vendors and derives a portfolio of complementary IT and organizational capabilities valuable for this goal. Future IS research should explore the firm's capabilities of other disruptive technologies (e.g., social media, artificial intelligence, blockchain, and Internet of everything) (e.g., [START_REF] Langley | The Internet of everything: Smart things and their impact on business models[END_REF] that can enable the firm's design and execution of digital innovation and transformation strategies. Second, we find that extremely interesting is the study of how firms can move from digitally driven digital transformation strategies to specific tactics (e.g., [START_REF] Casadesus | From strategy to business models and onto tactics[END_REF]) that provides a positive return on investments. Finally, recent IS research has found that complexity-altering corporate strategy changes (e.g., diversification, mergers and acquisitions, and divestitures) affect IT control's effectiveness [START_REF] Tanriverdi | Corporate strategy changes and information technology control effectiveness in multibusiness firms[END_REF]. Drawn on this IS research and looking up the reverse causality to our study's goal, examining how complexity-altering corporate strategy changes may affect the success of the user firm's digital transformation and the software vendors' support, it seems exciting IS research topics to explore in the short-term.

Concluding remarks

Digital innovation has become a central strategic challenge that user firms need to address to manage their digital business transformation successfully. Many user companies will need the support of software vendors in this innovation journey. Do software vendors propose, create, and capture value in the era of digital transformation? Drawn on the literature of business models, digital innovation, and firms' capabilities, we examine this core research question. We conducted a multiple case analysis of 10 software vendors that operate in Germany and Austria. The thematic analysis of data patterns yields a conceptual model that explains theoretically how software vendors leverage cloud computing-enabled innovation for the digital boost, which is this study's primary contribution to IS research. Software vendors use a complementary portfolio of IT and organizational capabilities to innovate in their customer value proposition, creation, and capture to obtain positive returns on investments. Quo Vadis? Abrell, T., Pihlajamaa, M., Kanto, L., Vom Brocke, J., & Uebernickel, F. (2016). The role of users and customers in digital innovation: Insights from B2B manufacturing firms.

Figure

  Figure 1: A conceptual model of the cloud computing-enabled business model innovation of software vendors

Figure 2 :

 2 Figure 2: IT and organizational capabilities for leveraging cloud computing for the value proposition

  Furthermore, network effects and ecosystem connectivity become key factors, reflecting the vital importance of partnerships and enhanced collaboration. By engaging and even taking central orchestrating roles in cloud ecosystems, software vendors benefit from broader and effective relationships with customers, partners, affiliates, and integrators. Software vendors develop trust in their solutions by simultaneously creating strong community ties and partnering with cloud hosting providers, as the following quote reflects: "Partnering with private cloud providers helps us to attract a broader range of consumers, especially larger corporations seeking certified solutions" (CEO of company B). Although several respondents perceive ecosystem connectivity as a key aspect in transitioning to the cloud, they acknowledge that most software vendors have

Figure 4 :

 4 Figure 4: IT and organizational capabilities for leveraging cloud computing for value capture

Table 1 : Digital innovation strategy: Definition, implications, and capabilities Authors and paper's title Definition digital innovation Implications for firm strategy Required firm capabilities Rose et al. (2016): An

 1

				Digital innovation is a type of	To remain successful in the	Specifically, smaller software vendors
	integrated	model	of	high-technology innovation that	digital		innovation	context,	need to enact and evaluate innovation
	innovation	drivers	for	results from a combination of	software vendors need to respond	leadership, leverage external knowledge,
	smaller software firms.		innovation drivers in the software	effectively to a range of critical	foster communities, engage users, and
				industry.					innovation drivers.	efficiently nurture design and cognition
											capabilities in collaborative software
											team processes.
	Nambisan et al. (2017):	Digital innovation is the creation	Digital innovation causes a shift	Match digital technologies with market
	Digital	innovation	or change of market offerings,	in innovation agency, residing in	offerings. Collaborate with infrastructure
	management: Reinventing	business processes, and business	various actors with distinct goals.	actors. Problem-solving to match needs
	Innovation	Management	models that result from digital	This shift challenges long-	and solutions in innovation practices.
	research in a digital world.	technologies.				standing innovation strategies	Balancing existing and digital innovation
									and influences multiple firms'	and complementarities between customer
									processes.	involvement	and	IT-moderated
											capabilities.
	Scott et al. (2017): The	Digital	innovation	is	the	The	adoption	of	digital	To benefit from the value-adding
	long-term effect of digital	organizational	adoption	of	innovation implies a long-term	mechanisms of digital innovation, a firm
	innovation	on	bank	emerging		technological	perspective of up to 10 years	must	develop	capabilities	to
	performance: An empirical	infrastructure resulting from the	before benefits can be generated.	communicate	with	complementary
	study of swift adoption in	development of new ITs. Value-	Network	effects	arise,	technology adopters operating in the
	financial services.		adding digital infrastructure as an	particularly during the early	digital infrastructure. Further, a firm must
				integral part of digital innovation.	digital		innovation	stage.	develop capabilities to communicate and
									Particularly SMEs benefit from	handle multiple transactions and benefit
									digital innovation, facing less	from the digital infrastructure's network
									complexity to overcome outdated	effects.
									resources, and create digital
									innovation capabilities.

Svahn et al. (2017):

	Helfat and Raubitschek	Digital	technologies	allow	Designing digitally moderated	Need to acquire dynamic integrative
	(2018):	Dynamic	and	platform ecosystems. The firm's	business models in multifaceted	capabilities, formulating and executing a
	integrative capabilities for	digital	innovation	involves	and networked digital platform	digital strategy; i.e., the firm-level
	profiting from innovation in	building	ecosystems	and	ecosystems implies complexity	capacity to communicate and coordinate
	digital	platform-based	designing appropriate business	for	managerial	capabilities.	digital platform ecosystems to introduce
	ecosystems.			models.			Complex business models result	new products, resources, capabilities, and
								from the need to orchestrate	business models.
								distributed actors.
	Tian et al. (2020): The	Digital innovation results from	Software vendors rely on	Complementing	capabilities	to
	differential impact of types	the rapid advancement of digital	pervasive	innovation	and	collaborate in platforms and leverage
	of app innovation on	technologies and the pervasive	imitation strategies in application	network effects, software vendors need to
	customer evaluation.		digitization of products and	development to cope with	efficiently understand and integrate
					services, transforming industries	hypercompetition that arises in	continuous customer evaluations of core
					and creating substantial economic	the digital innovation context.	and imitation innovations in new
					value.			application development.
					Digital	innovation	is	a	Firms must shift their identity to	Needs to develop new capabilities
	Embracing			digital	fundamental	organizational	embrace digital technologies in	alongside existing innovation practices.
	innovation in incumbent	challenge comprising capability,	implementing	a	digital	At the institutional level, the need to
	firms: How Volvo cars	focus,	collaboration,	and	innovation strategy. Adopting	balance four competing concerns for
	managed		competing	governance as four conflicting	systems integration perspective,	implementing a digital innovation
	concerns.				concerns to break away from	because digital technologies	strategy. At the innovation unit level,
					established innovation paths.	intertwine	with	routines,	leveraging change to benefit from digital
								procedures, and belief systems	opportunities versus handling rigidities of
								beyond	institutionalized	existing innovation routines.
								architectural thinking.
	Teece (2018): Profiting	The digital revolution, the	Designing business models to	Business models evolve around software
	from innovation in the	presence	of		enabling	benefit from digital technology	solutions hosted in digital platforms,
	digital economy: Enabling	technologies, and the growing	challenges existing logic and	allowing continual modifications in
	technologies,	standards,	importance of complementary	choices to propose customer	response to customer feedback. Creating
	and licensing in the	assets allow firm-level digital	value. Need to acquire analytical	value with business models results from
	wireless world.			innovation.		granularity to understand digital	choices	on	digital	technologies'
								technologies' impacts on value	properties	and	orchestrating
								creation and value capture.	complementarities in ecosystems.

Table 2 : Summary of firms and respondents used in data collection Firm and sector's focus

 2

		Brief description	Interviews Follow	Position of	Additional data	Number of
						-up(s)	interviewees	employees
	A, multimedia Offers		software	6	2	Senior	Product	FAQs, handbook, community	366600
		solutions for digital			Manager, Product	forum, tutorial, and support
		media	and	digital			Manager, Product	portal.
		marketing projects for			Owner,	and
		creative professionals			Account Manager.
		such as publishers and
		advertisers to create,
		edit, and publish media
		content.
	B, mobile	Offers clients a simple	2	2	Senior Manager,	Website, blog, press release,	21350
	application	web-based solution to			Customer		and two showcases

Table 3 : Value proposition: IT and organizational capabilities and related quotations Capabilities from coding Additional aspects of the capabilities Related supportive quotes

 3

Table 4 : Value creation: IT and organizational capabilities and related quotations

 4

	Capabilities from coding	Additional aspects of the capabilities	Related supportive quotes
		C.1) If a separation of on-premise and
		cloud computing solutions is not
		possible,	firms	should	increase
		integration capabilities.
		C.2) Because any coding failures
	Developing	immediately affect all users of the
	technological (IT)	application and pose a significant threat
	capabilities (C)	to software vendors, they have to
		improve their technological capabilities.
		C.3) The integration and management of
		security competencies are crucial for the
		cloud computing-based business model
		innovation.

Table 5 : Value capture: IT and organizational capabilities and related quotations Capabilities from coding Additional aspects of the capabilities Related supportive quotes

 5

		F.1) While software vendors initially	"What I can imagine is to separate our business units to also clearly
		assumed that established on-premises	segregate sales and support structures in our firm" (CEO of company
		sales departments organize the	H).
		distribution of cloud solutions, they
		realized that selling on-premise
	Improved cash flow management (F)	software differs significantly from selling cloud solutions. F.2) As the cost per unit of software
		decreases with increasing output, the
		usage of these cost advantages is an
		important success factor for software
		vendors.

Digital boost refers to the forced acceleration and transformation of the firms' digital channel, which might require the support of a software vendor. This concept comes from the real-world (software vendors, e.g., https://www.digitalboost.es/). The second author wants to thank Jose Sanchez (CEO of Prodware Spain and Vice-President of Strategic Accounts of Prodware Group; Prodware is a software vendor) for sharing and inspiring the usage of the concept of digital boost in this paper.

Jose Benitez would like to express his gratitude for the research sponsorship received from the European Regional Development Fund (European Union) and the Government of Spain (Research Project ECO2017-84138-P), the Regional Government of Andalusia (Research Project A-SEJ-154-UGR18), the Endowed Chair of Digital Business Transformation at Rennes School of Business, and the Slovenian Research Agency (Research Core Funding No. P5-0410).