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SOFTWARE PLATFORM'S VALUE CORRECTION BY IDIOSYNCRATIC RISK AND ITS APPLICATION IN THE SAAS BUSINESS MODEL
One of the main digitalization risks is the information overwhelming that either consumers either companies face with. The digital economy rearranges the risks, so rare events in the past nobody considered as worth to be afraid of seriously become real. A huge volume of information needs to be structured to become at least partially manageable. But as this is still the problem for institutional organizations, this is far more true for the individual users. So, one of the main risks for a company arising specifically with the digital economy is customer disloyalty. In the study, one of the risks that denote those “disloyalty issue” is called idiosyncratic risk, as far as it is manageable from the company's perspective but it is covered by the market risk. The main aim of this study is to assess whether the idiosyncratic risk influences a company's value or not and if it does, whether that could be utilized in the decision-making mechanism. The Software-as-a-service business model is under consideration. The reasons for the model choice include the rapid growth of SaaS businesses in recent decades (Choudhary, 2007; McKenzie, n.d.). One doesn't need to visit a store to make one's choice. In this sense all software developers are in the comparatively equal conditions, and a company's physical location doesn't matter, at least in the same language region. All consumers who buy the same given software license use totally identical service, and the software bugs or weird features are the same, so the negative reviews on the software will draw much more public attention that they would in case of FMCG market. Software development is considered to be innovative industry (OECD, 2011). Innovation spillover can damage companies' performance (Hamel & Prahalad, 1994; Майсснер, 2012), so the companies could see innovation spillovers as a risk.