Following the Money: Revenue Stream Constituents in Case of Within-firm Variation

Abstract

The idea of this paper stems from the perception that the concept of revenue stream requires clarification and further division to be applicable to businesses with high internal variation in their methods of capturing revenue. Current study sets out to investigate the concept of revenue stream through an overview of previous literature and a case study to demonstrate how revenue streams of a b2b (business-to-business) software service firm can be analyzed by elaborating the concept further. The aim is to answer the following research questions: 1) What are the relevant constituents of the revenue stream concept within a b2b software services firm? 2) How revenue stream as part of the business model can be analyzed within a firm? This exploratory study contributes to the business model literature by investigating the concept of revenue stream and revenue stream type as managerial tools to better understand the business under investigation. The study further attempts to contribute to the decomposition of the revenue stream concept by exploring its constituents in the context of b2b software business. It is suggested that revenue streams in this context should be approached based on sub-component level analysis where the reason and source dimensions create a matrix of analysis cells from which revenue stream types emerge based on similarities in the method of the revenue streams. Based on previous literature and empirical study, it is further suggested that the revenue stream has three main constituents or sub-components: 1) the source of revenue, 2) the reason for revenue and 3) the method of revenue.