A Practitioners Guide to Ecosystem Development

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A Practitioners Guide to Ecosystem Development

  1. 1. A Practioners Guide to Ecosystem Development Mike Milinkovich Executive Director, Eclipse Foundation mike@eclipse.org Confidential | Date | Other Information, if necessary September 3, 2008 © 2002 IBM Corporation
  2. 2. What will you learn? What an software business ecosystem is Why it matters to your business Some thoughts on why open source accelerates ecosystem creation Some lessons hard learned by someone who does this for a living Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  3. 3. Why do you care? Because picking your ecosystem and your role in it is perhaps the single most important decision you can make in your new software business Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  4. 4. Agenda What is Eclipse? Ecosystems The importance of platforms Open source ecosystems Lessons learned Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  5. 5. The Eclipse Development Platform Used by 4.0 million developers worldwide Evans Data, July 2008 Supports Java, C/C++, PHP, Python, Ruby, Rcl, Ajax, COBOL, Ada, Fortran, …. Delivers OSGi-based runtime technologies that runs on devices (Nokia S60), desktops (Lotus Notes) and servers (WebLogic, WebSphere) Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  6. 6. The Members of Eclipse 182 members 20 Strategic Members 923 committers, representing 50+ organizations Strategic Members Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  7. 7. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0 7
  8. 8. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  9. 9. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0 9
  10. 10. Agenda What is Eclipse? Ecosystems The importance of platforms Open Source ecosystems Lessons learned Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  11. 11. http://www.flickr.com/photos/idolenga/50866390/ Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  12. 12. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  13. 13. You Already Know These… Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  14. 14. And They Can Be Big! Domain Number of Firms System Integrators 7,752 Development services 5,747 Campus resellers 4,743 ISVs 3,817 Trainers 2,717 Breadth VARs 2,580 Small specialty firms 2,252 Top VARs 2,156 Hosting service providers 1,379 Internet service providers 1,253 Business consultants 938 … Ref: “Strategy as Ecology”, Marco Iansiti, Roy Levin, Harvard Business Review: R0403E Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  15. 15. Why do they exist? Competition is now based on continuous innovation, not efficiency and effectiveness Companies are defined by their innovation trajectory, not their current products No firms have the skills or resources to do everything – need to organize for co-evolved innovation Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  16. 16. What is an Ecosystem? Space Niches Complementors Platform Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  17. 17. The Current Example Niches Complementors XMLHttpRequest Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  18. 18. Definition “Business Ecosystems” are defined as intentional communities of economic actors whose individual business activities share in some large measure the fate of the whole community…. establish business ecosystems to co-evolve innovation across complementary contributions arising within multiple markets and hierarchies Business Ecosystems and the View From the Firm James F. Moore, Antitrust Bulletin, Fall 2005 Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  19. 19. Definition “Business Ecosystems” are defined as intentional communities of economic actors whose individual business activities share in some large measure the fate of the whole community…. establish business ecosystems to co-evolve innovation across complementary contributions arising within multiple markets and hierarchies Business Ecosystems and the View From the Firm James F. Moore, Antitrust Bulletin, Fall 2005 Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  20. 20. A Form of Economic Organization Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  21. 21. Hierarchies Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  22. 22. Markets – Competing Hierarchies Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  23. 23. Ecosystems ~= Supply Chains Multiple players in each niche Underestimate cost/time to coordinate interdependences Reducing development time may not give company much Company depends on deployment of complementors’ offers, each of which can close window of opportunity Joint probability of partners being ready at same time is low, even when each individual probability is high Each of five suppliers has an 80% chance of being ready at T, how confident can they be of all five being ready at T? .8 x .8 x .8 x .8 x .8 = .33 Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0 23
  24. 24. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  25. 25. Key Concepts Co-ordinate and co-evolve innovation Alignment of vision Degrees of openness in niches Degrees of modularity, openness in platform A network of niches Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  26. 26. Some examples Co- Vision Niche Platform Platform evolved Openness Openness Modularity Innovation ? ? ? X ? -- ? iPhone Android ? ? ? ? Windows ? -- Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  27. 27. Measuring the Health of Ecosystems Productivity (of the Ecosystem) Means how much value is being created in the ecosystem Taking raw materials (time, skills, tools) and converting them into something more valuable (better tools, applications, innovations) Robustness Means how durable and able to adapt is the ecosystem to external events “Strategy as Ecology” Niche Creation Marco Iansiti, Roy Levin Harvard Business Review The ability to expand the ecosystem with meaningful diversity The ecosystem “keystone” is responsible for maintaining this health. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  28. 28. Agenda What is Eclipse? Ecosystems The importance of platforms Open Source ecosystems Lessons learned Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  29. 29. Space Niches Complementors Platform We are here Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  30. 30. Platform Leadership Scope of the firm Platform, wannabe, or complementor Platform technology Modularity, openness Complementor relationships Partners or prey? Internal Organization Culture, processes Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  31. 31. The Eclipse Experience – Platform Modularity Ease of Integration New Plug-ins and Extensibility are First Class Spurs Innovation Citizens – same footing Platform Plug-ins for everyone Run-time Open API and commercially friendly licensing Competition can take – Low barriers to place on implementations Entry – users decide winners Successful Ecosystems are built on this model! Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  32. 32. Foundation platform is the Combined base of: Technologies Architectures, designs and assets used to build market offers Components, products and services Legal and licensing framework Processes which anchors economic community Existing open source organizations provide these “out of the box” Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  33. 33. Summary: Your Ecosystem Checklist Vision Space Platform Continuous and co-evolved innovation Keystones Niche Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  34. 34. Agenda What is Eclipse? Ecosystems The importance of platforms Open Source ecosystems Lessons learned Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  35. 35. You Already Know These… Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  36. 36. Open Source Platforms Open Source development model encourages open innovation Openness, Transparency, Meritocracy Anyone can participate Open Source licensing allows competing vendors to collaborate on the infrastructure technology No requirement for royalties. No single control point of intellectual property Open Source business model encourages rapid adoption of technology It is free and easy to access Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  37. 37. Win by letting go No control points Open governance Vendor neutral Code rules …attracts the broadest and deepest participation Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  38. 38. Unique Benefits The power of the ecosystem keystone being a non- profit is huge Vendor neutral Trusted agent Force multiplier Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  39. 39. Business Drivers for Collaborative Platform Evolution Define very precisely what your competitive differentiators are for your customers or you’re going out of business Focus all possible energies there, and acquire everything else from OSS, or help build it in OSS Value Build this in and with open source, even Platform if that means working with your direct competitors. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  40. 40. Or in other words… Value Pick your niche Co-evolve the platform in Platform collaboration with other actors in the ecosystem Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  41. 41. Collaborating on the Platform – Innovation Networks Open Innovation is a paradigm that assumes that firms can and should use external ideas as well as well as internal ideas…. The Open Innovation paradigm treats R&D as an open system. Open Innovation is sometimes conflated with open source methodologies for software development…While open source shares the focus on value creation throughout an industry value chain, its proponents usually deny or downplay the importance of value capture. Open Innovation: Researching a New Paradigm Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  42. 42. Collaborating on the Platform – Innovation Networks Open Innovation is a paradigm that assumes that firms can and should use external ideas as well as well as internal ideas…. The Open Innovation paradigm treats R&D as an open system. Open Innovation is sometimes conflated with open source methodologies for software development…While open source shares the focus on value creation throughout an industry value chain, its proponents usually deny or downplay the importance of value capture. Open Innovation: Researching a New Paradigm Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  43. 43. Innovation Networks in Action: The Eclipse Web Tools Platform Project JBoss Studio NetWeaver Studio MyEclipse CodeGear JBuilder WebLogic Workshop Zend Studio Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  44. 44. Creating an Innovation Network Requirements include: Licensing model for sharing co-evolved innovation Project model for coordinating investments and activities Governance model to ensure a level playing field for all participants Technical architecture for the platform Existing open source organizations provide these “out of the box” Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  45. 45. Open Source Business Deliver multiple types of revenue upside at lower cost on multiple product lines because of open source agility Open source allows “innovation by integration,” fast creation of new products by integration of piece parts from elsewhere, rather than requiring top-to-bottom development project. Open source provides an architecture for driving more product innovations faster than competition. Innovation-by-integration enables new entrants to enter market easily with specialized niche or customized solutions, enhancing value of overall ecosystem and profits for niche vendors. Open source enables you to win market share against competitors that you couldn’t previously win market share against. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  46. 46. Open Source Business Deliver multiple types of revenue upside at lower cost on multiple product lines because of open source agility Open source allows “innovation by integration,” fast creation of new products by integration of piece parts from elsewhere, rather than requiring top-to-bottom development project. Open source provides an architecture for driving more product innovations faster than competition. Innovation-by-integration enables new entrants to enter market easily with specialized niche or customized solutions, enhancing value of overall ecosystem and profits for niche vendors. Open source enables you to win market share against competitors that you couldn’t previously win market share against. Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  47. 47. Agenda What is Eclipse? Ecosystems The importance of platforms Open Source ecosystems Lessons from Eclipse Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  48. 48. Ecosystems ultimately exist to drive value to their participants Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  49. 49. Building trust Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  50. 50. The value of the ecosystem is its network value Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  51. 51. The platform is key Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  52. 52. Multi-player platform leadership Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  53. 53. Platform evolution is scary hard Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  54. 54. Free advice: Everyone wants to be a platform There are many filthy rich companies living in niches Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  55. 55. Conclusions Ecosystems define the software industry You need to know your ecosystem and your role in it Open source ecosystems solve some very specific business requirements Managing the evolution of an ecosystem is incredibly complex and fun Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0
  56. 56. Thank You! Questions? Copyright © 2008 Eclipse Foundation, Inc. All Rights Reserved. Made available under the Eclipse Public License 1.0

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