Peterson, Fairchild ASP adoption in SMEs Adoption Trends in Application Service Provisioning: An Exploratory Field Study of Small and Medium-size Enterprises Ryan R. Peterson, PhD. Information Management Research Center, Department of Information Systems Instituto de Empresa, Maria de Molina 12 – 4, 28006 Madrid, Spain Tel: +34 91 568 96 00, Fax: +34 91 563 68 59 Ryan.Peterson@ie.edu Alea M. Fairchild, PhD. SOBU Post Doctoral Researcher, Enabling Electronic Commerce Programme Tilburg University, PO Box 90153, 5000 LE, Tilburg, The Netherlands Tel: +31 13 466 2138, Fax: +31 13 466 3377 A.M.Fairchild@uvt.nl Abstract This paper describes an exploratory field study on the adoption of Application Service Provisioning (ASP) in Small and Medium-sized Enterprises (SMEs). Rooted in Merton’s Motivation-Ability model of innovation, and based on an integrated multi-theoretical framework, several factors are identified, which drive and enable ASP adoption. The results of the survey indicate that the primary drivers for ASP adoption in SMEs are improved operational excellence, focus on core competency, easy access, and flexible deployment. Critical enabling factors of ASP adoption involve application service security, service level management, SME trust in ASP, and quality of application service. The findings provide support for the research model, i.e., both motivation and maturity factors play a pivotal role in ASP adoption. Moreover, whereas the first wave of ASP was characterized by a strong ‘technology-push’, currently, a ‘SME Technology-Pull’ characterizes ASP adoption. The paper concludes by discussing several important lessons and presents a model for strategic ASP alignment. Keywords IT innovation adoption, IT outsourcing, Application Service Provisioning (ASP), Small and Medium-size Enterprises (SME). 1. Introduction “ASPs will save your business money and time by relieving the headaches associated with the purchase of software: large up-front costs, IT support, investment risks, outdated software, inaccessible information and much more. Explore our resources and discover how ASPs will dramatically reduce your technology budget while increasing business productivity ”