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Progress in IS Arnold Picot · Thomas Hess Christian Hörndlein · Natalie Kaltenecker Claudius Jablonka · Michel Schreiner Alexander Werbik · Alexander Benlian Rahild Neuburger · Bernhard Gold The Internationalization of German Software-based Companies Sustainable Growth Strategies for Small and Medium-sized Companies

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Page 1: Arnold Picot · Thomas Hess Christian Hörndlein · Natalie … · 2016. 2. 12. · Arnold Picot † Thomas Hess Christian Hörndlein † Natalie Kaltenecker Claudius Jablonka †

Progress in IS

Arnold Picot · Thomas HessChristian Hörndlein · Natalie KalteneckerClaudius Jablonka · Michel SchreinerAlexander Werbik · Alexander BenlianRahild Neuburger · Bernhard Gold

The Internationalization of German Software-based CompaniesSustainable Growth Strategies for Small and Medium-sized Companies

Page 2: Arnold Picot · Thomas Hess Christian Hörndlein · Natalie … · 2016. 2. 12. · Arnold Picot † Thomas Hess Christian Hörndlein † Natalie Kaltenecker Claudius Jablonka †

Progress in IS

Page 3: Arnold Picot · Thomas Hess Christian Hörndlein · Natalie … · 2016. 2. 12. · Arnold Picot † Thomas Hess Christian Hörndlein † Natalie Kaltenecker Claudius Jablonka †

More information about this series at http://www.springer.com/series/10440

Page 4: Arnold Picot · Thomas Hess Christian Hörndlein · Natalie … · 2016. 2. 12. · Arnold Picot † Thomas Hess Christian Hörndlein † Natalie Kaltenecker Claudius Jablonka †

Arnold Picot • Thomas HessChristian Hörndlein • Natalie KalteneckerClaudius Jablonka • Michel SchreinerAlexander Werbik • Alexander BenlianRahild Neuburger • Bernhard Gold

The Internationalizationof German Software-basedCompaniesSustainable Growth Strategies for Smalland Medium-sized Companies

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Page 5: Arnold Picot · Thomas Hess Christian Hörndlein · Natalie … · 2016. 2. 12. · Arnold Picot † Thomas Hess Christian Hörndlein † Natalie Kaltenecker Claudius Jablonka †

Arnold PicotResearch Center for Information, Organization

and ManagementLudwig-Maximilians-Universität MünchenMunichGermany

Thomas HessInstitute for Information Systems and New MediaLudwig-Maximilians-Universität MünchenMunichGermany

Christian HörndleinInstitute for Information Systems and New MediaLudwig-Maximilians-Universität MünchenMunichGermany

Natalie KalteneckerInstitute for Information Systems and New MediaLudwig-Maximilians-Universität MünchenMunichGermany

Claudius JablonkaCenter for Digital Technology and ManagementMunichGermany

Michel SchreinerInstitute for Information Systems and New MediaLudwig-Maximilians-Universität MünchenMunichGermany

Alexander WerbikResearch Center for Information, Organization

and ManagementLudwig-Maximilians-Universität MünchenMunichGermany

Alexander BenlianInformation Systems and Electronic ServicesTechnische Universität DarmstadtDarmstadtGermany

Rahild NeuburgerResearch Center for Information, Organization

and ManagementLudwig-Maximilians-Universität MünchenMunichGermany

Bernhard GoldT-Venture of America, IncSan Francisco, CAUSA

ISSN 2196-8705 ISSN 2196-8713 (electronic)Progress in ISISBN 978-3-319-13547-2 ISBN 978-3-319-13548-9 (eBook)DOI 10.1007/978-3-319-13548-9

Library of Congress Control Number: 2014956364

Springer Cham Heidelberg New York Dordrecht London© Springer International Publishing Switzerland 2015This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or partof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmissionor information storage and retrieval, electronic adaptation, computer software, or by similar ordissimilar methodology now known or hereafter developed.The use of general descriptive names, registered names, trademarks, service marks, etc. in thispublication does not imply, even in the absence of a specific statement, that such names are exemptfrom the relevant protective laws and regulations and therefore free for general use.The publisher, the authors and the editors are safe to assume that the advice and information in thisbook are believed to be true and accurate at the date of publication. Neither the publisher nor theauthors or the editors give a warranty, express or implied, with respect to the material containedherein or for any errors or omissions that may have been made.

Printed on acid-free paper

Springer International Publishing AG Switzerland is part of Springer Science+Business Media(www.springer.com)

Page 6: Arnold Picot · Thomas Hess Christian Hörndlein · Natalie … · 2016. 2. 12. · Arnold Picot † Thomas Hess Christian Hörndlein † Natalie Kaltenecker Claudius Jablonka †

Acknowledgments

We would like to thank all of the German and international experts, interview andcase study partners, as well as the participants of our empirical survey, who took thetime to support us in the course of this scientific study. We appreciate their effort,without which this study would not have been possible.

We are especially thankful to Ingo Ruhmann from the Federal Ministry ofEducation and Research and Dr. Jens Totz from the German Aerospace Center fortheir constructive feedback throughout all phases of the project.

Last but not least, we would like to thank Dr. Rebecca Ermecke and Dr. KathrinSattler for their expertise and methodological support in the different phases of theproject. We also thank all of the student research assistants for the support anddedication throughout the whole project: Alysa Reuter, Beate Ströhlein, ChristianSoyk, Claudia Beinert, Corinne Petroschke, Heinrich Rusche, Johanna vonBoeselager, Leonie Schminke, Maria Farber, Markus Zuleger, Michaela Rauscher,and Moritz Palme.

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Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.1 Status Quo of the German and Global Software Industry . . . . . 52.2 Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.2.1 Software-Based Companies . . . . . . . . . . . . . . . . . . . 62.2.2 Internationalization . . . . . . . . . . . . . . . . . . . . . . . . . 8

2.3 Current State of Research . . . . . . . . . . . . . . . . . . . . . . . . . . 92.3.1 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . 92.3.2 Research Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

3 Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.1 Project Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.2 Details on Project Phase I . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3.2.1 Development of the Online Questionnaire . . . . . . . . . 173.2.2 Company Selection . . . . . . . . . . . . . . . . . . . . . . . . . 203.2.3 Online Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213.2.4 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

3.3 Details on Project Phase II . . . . . . . . . . . . . . . . . . . . . . . . . . 223.3.1 Development of the Case Study Interview

Guideline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223.3.2 Company Selection . . . . . . . . . . . . . . . . . . . . . . . . . 233.3.3 Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243.3.4 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274.1 Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

4.1.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 284.1.2 Qualitative Case Study Results—Germany . . . . . . . . . 294.1.3 Qualitative Case Study Results—International . . . . . . 314.1.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 32

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4.2 Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344.2.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 354.2.2 Qualitative Case Study Results—Germany . . . . . . . . . 364.2.3 Qualitative Case Study Results—International . . . . . . 374.2.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 38

4.3 Product Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404.3.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 404.3.2 Qualitative Case Study Results—Germany . . . . . . . . . 414.3.3 Qualitative Case Study Results—International . . . . . . 424.3.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 43

4.4 Scalability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454.4.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 454.4.2 Qualitative Case Study Results—Germany . . . . . . . . . 454.4.3 Qualitative Case Study Results—International . . . . . . 474.4.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 48

4.5 Growth Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494.5.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 504.5.2 Qualitative Case Study Results—Germany . . . . . . . . . 504.5.3 Qualitative Case Study Results—International . . . . . . 524.5.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 52

4.6 Cooperation Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544.6.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 544.6.2 Qualitative Case Study Results—Germany . . . . . . . . . 554.6.3 Qualitative Case Study Results—International . . . . . . 564.6.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 57

4.7 Ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594.7.1 Quantitative Results . . . . . . . . . . . . . . . . . . . . . . . . 594.7.2 Qualitative Case Study Results—Germany . . . . . . . . . 604.7.3 Qualitative Case Study Results—International . . . . . . 614.7.4 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . 62

5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

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Chapter 1Introduction

The software industry is central to Germany’s economic competitiveness. Software-based companies play a crucial role in the competition between the economies ofthe 21st century. They are critical both as a key industry on its own and functioningas a driver for many other industries and sectors, such as the automotive industry(e.g. embedded systems), engineering (e.g. Industry 4.0), the energy sector (e.g.Smart Energy), or medical devices (e.g. e-health). The software industry’s impor-tance will continue to grow, as machines are increasingly being integrated withtraditional software components to form autonomously acting cyberphysical sys-tems. Considering the economy’s transformation into a digital economy, it is ofuttermost importance that Germany catches up with the international leaders in themost important areas.

The global market for business-to-consumer (B2C) software for operation sys-tems (e.g. Microsoft, Apple), social networks (e.g. Facebook), social news (e.g.Twitter), user-generated content (e.g. YouTube), search engines (e.g. Google), aswell as retail and marketplaces (e.g. Amazon, eBay) is currently dominated by US-American companies. US-American companies, such as Oracle, Microsoft, andIBM have also taken the lead in the business-to-business (B2B) segment. In con-trast, only two of the world’s largest software companies, SAP AG and SoftwareAG, were founded in Germany. A large number of German companies primarilyoperate in specialized market segments.

Compared to the dominating companies in the software industry, software-basedcompanies from Germany usually play a minor role. There have been some indi-vidual successes in the recent past, where German companies could grow to beinternational leaders in certain market segments, such as the gaming sector(Söndermann 2010, p. 28). One could also observe an increase in start-up andentrepreneurial activity. Nevertheless, the German market is still dominated bysmall and very small software development companies with a low export share(Söndermann 2010, p. 28, 93).

This development is problematic for the following two reasons: on the one hand,software-based companies’ importance will continue to grow, as the economy will

© Springer International Publishing Switzerland 2015A. Picot et al., The Internationalization of German Software-based Companies,Progress in IS, DOI 10.1007/978-3-319-13548-9_1

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