The eight faces of software business: A cognitive view to business model classification

In the software industry's landscape, success hinges not only on technological innovation, but also on the business models (BMs) that firms design and enact to compete. As theoretically grounded representations of how decision-makers translate opportunities, orchestrate resources and organize transactions for value creation and capture, BMs embody the cognitive logics that guide managerial action. Yet, despite their centrality, BM research remains not only fragmented, but also insufficiently informed by a cognitive perspective. Early contributions tend to be descriptive in nature or adopt atheoretical conceptualizations. Subsequent, more sophisticated efforts, advanced a structural view by employing clustering techniques on a set of measurable variables that overlook the nuances underlying BM designs. More importantly, structural taxonomies often assume that BMs can be reduced to isolated attributes, leading scholars to focus on single dimensions; either the offering profile (product vs. service orientation) or technological openness (open-source vs. proprietary). Within such one-dimensional treatments, cognition remains largely absent. Once these dimensions interact, however, cognitive framing becomes critical in shaping the resulting configurations. Addressing these considerations, we develop a comprehensive, cognitively informed, multidimensional classification of software BMs by conducting a systematic document analysis of 374 corporate materials from 22 leading firms. Our findings reveal eight distinct software BMs and highlight the prevalence of BM portfolios. Our study contributes to BM and software business literature, while providing decision-makers with a strategic framework to navigate the software industry's dynamic conditions.