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This paper aims to investigate the effectiveness in the use of public procurement as an alternative for inducting innovations in software services supplying companies. It analyses the purchase requirements of governmental clients and its impacts in inducting innovations. It is a study of multiple cases with ten analysis units conducted using semi-structured interviews with professionals in the companies. Innovations are identified in three steps: pre-sale, service providing, and post-sale. The results show that the provision of services to governmental clients is defined by bureaucratic parameters and by the attendance to different process conditions, which restrict the emergence of innovative solutions and, especially, its reuse with non-governmental clients. The study confirms the induction of innovations by governmental clients. Even though this induction is not intentional, it meets the main trajectory presented in the Chain-Linked Model

WHEN THE GOVERNMENT IS THE MARKET: GOVERNMENT PROCUREMENT AND INNOVATION IN SOFTWARE SERVICES