Dynamic capabilities triggered by cloud sourcing: a stage-based model of business model innovation

Abstract Current research offers very limited insights on the process of how the adoption and continued use of cloud sourcing might trigger and push the development of business model innovation and affect the competitive advantage of a firm. Applying an abductive approach, with two longitudinal case studies of cloud sourcing firms, and a theoretical framework based on stage-based models of business model innovation and the dynamic capability view of the firm, we develop a model of stage-based business model innovation related to the adoption and continued use of cloud sourcing. The model identifies three business model innovation stages characterized by specific types of capabilities. In between the three stages, we identify three dynamic junctures that the firm and its managers have to overcome to progress from one stage to another. In the dynamic junctures three types of dynamic capabilities were key; sensing, seizing and transformation capabilities, to pass to the next stage. The model contributes to a better understanding of the evolution of dynamic capabilities as well as the evolution of the cloud sourcing firm and cloud-based business model innovation.