3. 3
Ecosystem
Loose networks – of suppliers, distributors,
outsourcing firms, makers of related products or
services, technology providers, and a host of other
organizations – that affect, and are affected by the
creation and delivery of a company’s own
offerings. [Marco Iansiti]
An economic community supported by a
foundation of interacting organizations and
individuals—the organisms of the business world.
The economic community produces goods and
services of value to customers, who are themselves
members of the ecosystem [James Moore]
4. 4
Creating Awesome Users
Don't make a better [X], make a better
[user of X].
Kathy Sierra
Think about how customers experience
the product or service
8. 8
Layered model of capabilities
Hardware (consoles)
Data
Services (safety, entertainment, insurance)
Connectivity (broadband, mobile)
Operating SysStems
Social or Community Layer
Gaming Layer
Apps
9. 9
Software Ecosystem
.. ―a set of actors functioning as a unit and
interacting with a shared market for software
and services, together with the relationships
among them. These relationships are
frequently underpinned by a common
technological platform or market and operate
through the exchange of
information, resources and artifacts.‖
11. 11
Networks
Deliver value to customer segments
using a portfolio of capabilities some of
which are achieved through links or
dependencies.
People
Objects
Systems
Organizations
13. 13
Industry Platform Definition
Technology or set of components (or services) that
creates a common foundation,
That brings together multiple parties beyond a
single firm (―market sides‖) for a common purpose
and generates network effects,
Where the value can increase exponentially
with (a) more users and (b) more ―complementary‖
products & services built around the platform
Michael Cusumano, Platform Strategy Fundamentals 2014.
17. 17
Google Wallet
Phones: Google Wallet will work with the Android & iOS
Cards: Citi MasterCard, a pre-loaded Google Prepaid Card
(which can be ―refilled‖ from any source of funds) and gift
cards from various participating merchants.
Markets: available in San Francisco and New York
Participating merchants: American Eagle Outfitters,
Bloomingdale’s, Champs Sports, The Container Store,
Duane Reade, Einstein Bros. Bagels, Foot Locker, Guess,
Jamba Juice, Macy’s, Noah’s Bagels, Peet’s Coffee & Tea,
RadioShack, Subway, Toys―R‖Us and Walgreens.
Google Wallet relies on the MasterCard PayPass
infrastructure it will work ―at more than 124,000 PayPass-
enabled merchants nationally and 311,000 globally.‖
17
18. 18
Google Wallet
Google Offers linked to Wallet: Offers are
directly integrated into Google Wallet.
Consumers will be able to send offers they
encounter to Wallet with a single click (if you’re
signed in). Redemption will be accomplished
with a ―SingleTap‖ at the point of sale or via
scanning or keying in a code if the POS system
doesn’t support SingleTap.
Future uses: Google envisions that ―receipts,
boarding passes and tickets will all be
seamlessly synced to your Google Wallet.‖
18
23. 23
Market
Forrester Research estimates the size of the opportunity
will grow to $90 billion by 2017, growing at a 48% rate
since 2012.
Worldwide mobile payment transaction values will
surpass $171.5 billion ... according to Gartner, Inc.
By 2015, about half of the 863 million phone
handsets sold yearly worldwide will contain the
chips, according to Frost & Sullivan.
150,000 merchants on Google Wallet
―only about 7 percent of retail sales occur
online, compared to $4 trillion that is still spent in person
at stores. "We're going after the 93 percent," Google
VP, Osama Bedier.
23
26. 26
Method used for Ecosystem
generation
List of platform players created from
virtual currency platforms, experts, and
Created a list of partners from news
feeds and websites
Visualized using Pajek
28. 28
Analysis
237 companies, 25 platforms
Many approaches to M-payment
Diversity is good
Many fragmented platforms
Carriers and card issuers are working
across platforms
Still evolving ecosystem
Many experiments in emerging
economies
29. 29
M-payment Platform Wars
A few platforms may emerge
Unique value proposition
Too expensive to carry multiple systems
Direct (developers) and Indirect (end
users) Network Effects
Business models and subsidies
Emergence of standards like OpenSocial
29
30. 30
Product vs. Platform
Winners in a platform market generally have
the ―best‖ platform, not the ―best‖ product!
Best products? Hard to define & while
good, usually not enough to win or dominate in a
platform market
Best platforms? = (1) Open access &
interfaces (but not too open). (2) Modular
architecture (easy to build on, extend). (3)
Most compelling complements (usually result
of most vibrant ecosystem).
Michael Cusumano, Platform Strategy Fundamentals 2014.
32. 32
Methodology
Start with a focal set of firms (55 – 631)
Determined dependencies
Identified core
Capture definitions of cloud from the web
(~70)
Read descriptions
Run through a tag cloud analysis
Identified capabilities
40. 40
Illustrative list of
software firms in the
cluster
• NEC
• Computer Associates
• RealNetworks
• CheckFree Corp.
• Yahoo!
Link strength
High (5 or more links)
Medium (3-4 links)
Low (1-2 links)
The size of each node is proportional to the number of alliances
41. 41
Platform moves
• Open sourcing
• Cutting off air supply
• Entrants with network effects
• Creating and defending IP
• Acquisitions
• Creating exclusive links
• Complementor incentives and subsidies
• Envelopment (absorb & bundle)
• Facebook with social layer and FB credits
42. 42
Coring & Tipping
Strategic Option Possible Technology
Actions
Possible Business Actions
CORING
(How create a new
platform when none
existed before)
• Solve “system” problem
• Facilitate add-ons
• Keep key IP closed or
“open but not open”
• Strong
interdependencies --
platform & complements
• Solve “business”
problem
• Create complementor
incentives to innovate
• Protect revenue & profit
• Raise switching or multi-
homing costs
TIPPING
(How win a platform
battle when multiple
platforms compete)
• Develop compelling
features
• Absorb & bundle from
adjacent markets
(―envelopment‖)
• Complementor
incentives
• Coalitions of also-rans
• Pricing or other
subsidies to attract
users/complementors
Source: Gawer and Cusumano SMR 2008
43. 43
Findings
Chart your ecosystem
Ford (telematics, healthcare,
entertainment, ..)
Consider shifts in network
Own and third-party moves
Portfolio of proactive and reactive
connections
Ecosystem moves
44. 44
Methodology: EcoSysNetworks™
Determine industry structure or stack
Identify companies and attributes
Get dependency information and attributes
Enter information into database
Determine semantics for firms
(size, shape, color)
Determine semantics for links
(thickness, color)
Create input file for visualization
Visualize and interpret
45. 45
Stacks
Video Games SmartOS
Content providers
Software developers
Software publishers
Platform provider
Retailer
Consumer
Network operator
Handset manufacturer
Mobile OS provider
Content providers and aggregators
Application developers
46. 46
Identify companies and attributes
Sources
Competitive list from industry publications
News feeds
User generated input (bookmarks or
brainstorming)
Inputs
Name
Revenue
Business type (stacks)
Platform provider?
47. 47
Get alliance information and
attributes
Sources
Company websites
News feeds
Inputs
Alliance type
(technical, marketing, strategic or financial)
Single or multiple alliances
48. 48
Enter information into
database
The database has two tables
Firms
Relationships
Visualization semantics can also be stored in
the database
49. 49
Semantics for firms
Size
Currently we use
revenue
Shape
Platform players are
denoted as
diamonds, rest as
circles
Color
Based on stack layer
Access Light Magenta
Advertiser Green
Content Lavender
Hardware Tan
Default Red
Operator Melon
Services Blue
Investors Yellow
50. 50
Semantics for links
Thickness
Based on repeat links
Color
Based on relationship type
Technical
Marketing
Financial
Strategic
52. 52
Create input file for
visualization
We use Pajek for the visualizations
A sample Pajek input file has two parts
Vertices
A vertex record contains vertex
number, name, color, shape, size and the time
it appears on the visualization.
Edges
An edge record contains
from, to, thickness, color and the time it
appears in the visualization
53. 53
Data entry
Open Notepad
Enter data
Save as .net file
Use Excel
Save as Tab delimited DOS file
Replace tabs with spaces using Notepad
54. 54
*Vertices 8
1 "Google" ellipse ic Green x_fact 3 y_fact 4
2 ―Zynga" triangle ic Lavender x_fact 2 y_fact 2
3 ―Facebook" box ic Lavender x_fact 2 y_fact 2
4 "Accel" diamond ic Yellow x_fact 3 y_fact 3
5 "Accenture" circle ic Blue x_fact 2 y_fact 2
6 "IBM" box ic Orange bc Black
7 "MSFT" circle ic Cyan bc Magenta
8 "Intel" cross ic Purple bc Pink x_fact 3 y_fact 3
*Edges
1 2 1 c Tan
2 3 3 c Green
3 4 3 c Yellow
4 5 1 c Lavender
5 4 1 c Blue
5 6 2 c Gray
1 7 2 c Red
2 8 2 c Purple
3 5 2 c Brown
4 1 2 c Black
Data file
59. 59
Degree centrality
The degree centrality of a node is
defined as the total number of
connections the node has
60. 60
Density
Density is the number of connections a
node has, divided by the number of
possible connections
61. 61
Betweenness
It is important to find which units lie on
the shortest paths among pairs of other
units. Such units have control over the
flow of information in the network. Idea
of betweenness centrality measures:
unit is central, if it lies on several
shortest paths among other pairs of
units.
62. 62
Closeness centrality
Closeness is preferred in network
analysis to mean shortest-path
length, as it gives higher values to more
central vertices, and so is usually
positively associated with other
measures such as degree.
Source: wikipedia
63. 63
Clustering Coefficient
A node’s clustering coefficient can be
defined as the proportion of alters that
are themselves directly connected
64. 64
Pajek measures
Network/Create
Vector/Centrality/Degree/, while other two
centralities can be found under Degree
Network reduction
Net/Transform/Reduction/Degree
Core players
Net/Partitions/Core/Degree
Operations/Extract Network/Partitions
Draw-partition
66. 66
What did we find in the software sector
(1990-2001)?
Small worlds
Degree – 3.1 to 2.8
Density – decreased from 0.005 to
0.001
CC – 0.21 to 0.28
Structure of the network and firm
performance
67. 67
Platform Leadership Process
Create & communicate a vision of platform evolution
Build consensus & coalitions among a small group of
influential firms for new initiatives
Identify and target “system” bottlenecks
Distribute tools & enabling technologies to help partners
develop complements fitting the vision
Highlight business opportunities and help leading firms act
as “rabbits” to lead the market
Facilitate multi-firm initiatives to promote standards,
platform interfaces, and complementary innovations
Michael Cusumano, Platform Strategy Fundamentals 2014.
