Software Ecosystems
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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.
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Chapter 7: Framing management practices for keystones in platform ecosystems

Martti Viljainen and Marjo Kauppinen

Extract

The product line approach has been used in the software industry enabling the efficient mass production of standardised products, while, however, providing limited diversification possibilities (Pohl et al, 2005). One major approach to software product lines is the use of a common platform as a basis for product derivation. In the 1990s, the popular discussion was concentrated on the benefits of software reuse in intra-organisational ‘product platforms’ (Cusumano, 2010). Later in the 1990s, the strategic potential of ‘industry-wide platforms’ became a topic demonstrated by the dominant market positions among the platform leadership (Microsoft Windows, Intel, Cisco) (Gawer and Cusumano 2002; 2008). The industry platform consists of components that are likely to come from different companies called ‘complementors’ (Cusumano, 2010). The complementors, together with the industry platform, create an ecosystem in which the participants are dependent on each other to some extent. In market-driven software development, many possibly anonymous stakeholders influence requirements value chains in an ecosystem (Fricker, 2010). Markets for industry platforms tend to be ‘multi-sited’ (Rochet and Tirole, 2006). Companies compete not only for customers but also for developers and other complementors. For instance, mobile phone manufacturers (i.e., Apple, Nokia) compete for application developers as content providers. One notable thing is that the industry platform tends to create direct or indirect ‘network effects’, which are positive feedback loops that can grow at increasing rates as the adoption of the platform and the complements rises (Cusumano, 2010).

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