Software Ecosystems

Software Ecosystems

Analyzing and Managing Business Networks in the Software Industry

Edited by Slinger Jansen, Sjaak Brinkkemper and Michael Cusumano

This book describes the state-of-the-art of software ecosystems. It constitutes a fundamental step towards an empirically based, nuanced understanding of the implications for management, governance, and control of software ecosystems.

Chapter 1: Defining software ecosystems: a survey of software platforms and business network governance

Slinger Jansen and Michael A. Cusumano

Subjects: business and management, organisational innovation, organisation studies, strategic management, innovation and technology, organisational innovation


While in the early days of software engineering a software product was the result of effort of an independent software vendor to create a monolithic product, modern software strongly relies on components and infrastructure from third-party vendors or open source suppliers (Cusumano, 2004; Sawyer, 2000; Carmel, 1995). The relationships between software development firms and service companies shaped the product software landscape into software ecosystems, where suppliers and buyers of software products, components and technologies collaboratively create competitive value. One could state that the success of a product software company therefore no longer depends only on its own development quality but also on the way it manages its relationships (Gao and Iyer, 2006; Iyer et al, 2006; Farbey and Finkelstein, 2001). Software differs from physical goods in several ways. Software has no physical limitation, therefore the main limitations are conceptual, social and economic (Beizer, 2000; Messerschmitt and Szyperski, 2003). No other business has a gross profit margin of 99 percent on sold products (Cusumano, 2004). In other words, reproduction costs for software products are next to zero. Just as participants in a value chain of physical products, partners in a software value chain maintain ongoing business relationships. Up to the late 1980s, vertically integrated companies delivered complete system stacks (Cusumano, 2004).

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information