Day 2 Morning - Ecosystems, OSS, APIs and Mashups (Brian)

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  • Uses materials from Dr Bailetti
  • The concept of business ecosystems was introduced by James F. Moore in 1993.  Moore defines a business ecosystem as:An economic community supported by a foundation of interacting organizations and individuals--the organisms of the business world. This economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organizations also include suppliers, lead producers, competitors, and other stakeholders. Over time, they co-evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles.
  • Message is – no matter what business you are in, there is likely one or more ecosystems that exist or are emerging that are relevantNeed to look at them to understand the competitive threat or the opportunity to reduce costs and reduce time to revenue
  • Risk is ability to influence to improve the ecosystem for membersRisk is likihood that the level playing field will remain level for all members equallyMinimization of risk / understanding of risk relative to your role in the ecosystem related to your business is important, e.g. ability to influence may not be relevant
  • Seller-centric keystone – they enable re-usable assets which others profit from through complementary product development and services; they provide a channel (directory) to prospective buyersFor buyers they provide a channel to identify prospective suppliers, free community supportFor sellers it does development on the “non-value add” platform software which is expensive to independently develop and support – it helps make a marginal market profitable for sellers
  • Small sample size – less then 200 respondentsUsed to make productsUsed as a basis for products25% make money based on Eclipse platformAlmost 50% who make money based on Eclipse platform depend on the platform for more then 50% of their business’ revenue
  • For buyers – offers community support, directory to suppliers (free and commercial), documentation ,etcFor sellers – offers a level playing field, offers a channel to prospective buyers (directory), community support, etcSurvey results on users of Joomla -http://www.webologysolutions.com/download/Drupal%20vs%20Joomla%20Results%201.2.pdf
  • Many suppliers Vary in size from small business (RocketTheme) to small team (JSN)
  • Financial info from 2007 tax submissions
  • Mobile-phone software development has been around for a long time. But before the application stores made their debut, finding and installing the apps was rather complicated. The challenge for developers was to bring their apps to the attention of users, while users often had to attach data cables and download the software.Even Java applications, which could be distributed through web downloads, were tough to get into users' hands when it was difficult to get people to visit a website on their handsets. As a result, mobile-application developers depended on hard-to-get bundling deals with carriers. If a developer could strike a deal with a carrier to get their software preloaded on its phones, you were in like Flynn -- if not, you were out in the cold.  And in all cases carriers could dictate their own terms.
  • http://taptu.com/whitepapers/whitepaper2.htmlhttp://www.admob.com/s/solutions/metricshttp://marketshare.hitslink.com/mobile-phones.aspx?qprid=55&sample=31
  • Regardless, it's couch change for Apple, which topped $32 billion in sales last fiscal year. More important is that Apple's app platform is still far ahead of its competition. And we think it's doing its real job, too: Helping Apple sell more iPhones and iPod touches, which are worth much, much more to Apple's top and bottom lines. How'd we get $50 million to $100 million?Apple has told the WSJ that \"most\" iPhone downloads are free apps. We don't know how many those are, so let's assume they're about two-thirds of the downloads.That suggests that 100 million downloads (of 300 million) were paid apps.Apple recently published the top 10 most-downloaded paid apps. Their average price is about $2.80. We'll round that up to $3.That suggests Apple's gross revenue from paid apps is $300 million.Apple takes a 30% cut, and gives 70% to developers. That's $90 million for Apple, which we'll round up to $100 million for simplicity's sake.But this may be overstate the reality. In August, Steve Jobs told the WSJ that Apple made $30 million in gross sales for the first 60 million app downloads. Five times that (300 million downloads at that same rate) is $150 million, of which Apple would get 30%, or $45 million. We'll round that up to $50 million.
  • For buyers it offers transaction and arbitration services – it is the single point of contactFor the sellers it offers access to buyers they would not otherwise be able to engage
  • Profitable for “professional” graphics designers – noProfitable for 99 Designs – yesProfitable for part-time, off-shore designers – yes (average award of $226 per contest)
  • SoftwareMedia, e.g. images, books, documentation, training materials, musicHardware, e.g. ASIC, circuit design, modules, products (e.g. MP3 player)http://commons.wikimedia.org/http://www.wikipedia.orghttp://www.opensparc.org
  • 1. Free RedistributionThe license shall not restrict any party from selling or giving away the software as a component of an aggregate software distribution containing programs from several different sources. The license shall not require a royalty or other fee for such sale.2. Source CodeThe program must include source code, and must allow distribution in source code as well as compiled form. Where some form of a product is not distributed with source code, there must be a well-publicized means of obtaining the source code for no more than a reasonable reproduction cost preferably, downloading via the Internet without charge. The source code must be the preferred form in which a programmer would modify the program. Deliberately obfuscated source code is not allowed. Intermediate forms such as the output of a preprocessor or translator are not allowed.3. Derived WorksThe license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software.4. Integrity of The Author's Source CodeThe license may restrict source-code from being distributed in modified form only if the license allows the distribution of \"patch files\" with the source code for the purpose of modifying the program at build time. The license must explicitly permit distribution of software built from modified source code. The license may require derived works to carry a different name or version number from the original software.5. No Discrimination Against Persons or GroupsThe license must not discriminate against any person or group of persons.6. No Discrimination Against Fields of EndeavorThe license must not restrict anyone from making use of the program in a specific field of endeavor. For example, it may not restrict the program from being used in a business, or from being used for genetic research.7. Distribution of LicenseThe rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license by those parties.8. License Must Not Be Specific to a ProductThe rights attached to the program must not depend on the program's being part of a particular software distribution. If the program is extracted from that distribution and used or distributed within the terms of the program's license, all parties to whom the program is redistributed should have the same rights as those that are granted in conjunction with the original software distribution.9. License Must Not Restrict Other SoftwareThe license must not place restrictions on other software that is distributed along with the licensed software. For example, the license must not insist that all other programs distributed on the same medium must be open-source software.10. License Must Be Technology-NeutralNo provision of the license may be predicated on any individual technology or style of interface.
  • The Open Source Initiative (Open Source Initiative, 2005) has certified over 60 licenses as open source licenses as of May 2009. Lerner and Tirole (2002b) categorize open source licenses into three groups according to the restrictiveness of the license: unrestrictive (e.g., BSD), restrictive (e.g., LGPL), and highly restrictive (e.g., GPL). They focus on two critical characteristics when classifying the license type. First, the license is termed as being “restrictive” if the license requires that when modified versions of the program are distributed, the source code must be made available. Such a provision is also referred to as a “copyleft” provision. Second, the license is deemed to be “highly restrictive” if the license restricts modified versions of the program from mingling their source code with other software that does not employ such a license. Such a clause is sometimes referred to as “reciprocal” or “viral”. The most popular used open source licenses are General Public License (GPL), Lesser GPL (LGPL). GPLGPL is the most widely used open source license (Spiller & Wichmann, 2002). Under the GPL, the user has to agree not to impose licensing restrictions on others and any distribution of modified versions of the program must make available all changes to the source under the same license. Furthermore, the recipient of such source inherits the full rights to use or redistribute the program and code in any manner desired (Stallman, 1996).  GPL forbids the derivative work to be released under a proprietary license. This enhances the diffusion of software under the GPL license and guards the incentives of developers because it assures them that the code will remain open forever (Bonaccorsi & Rossi, 2005). However, the very strong “copyleft” makes GPL not very business-friendly because a company would have to reveal their software source code if they used (in the sense of included) parts of GPL software to develop it (Spiller & Wichmann, 2002). Additionally, to use code from another license, it must be assimilable by the viral license. Thus many other licenses are called “GPL incompatible”, as they may not be re-licensed upon distribution with the GPL code.  LGPLLesser GPL (LGPL) is a variant of the GPL license that promotes the use of GNU C libraries and Free Software libraries. A computer program can call a library released under the LGPL and maintain its own license scheme. The inheritance provision does not apply in this case (Bonaccorsi & Rossi, 2005). LGPL allows greater flexibility regarding the “mixing” requirement. Programs are allowed to link with (or employ) other programs that are not themselves available under an open source license. In all other respects, however, the LGPL is similar to the GPL (Lerner & Tirole, 2002b). BSDBSD is the most permissive license. BSD allows anyone to freely copy and modify the source code, requiring only a notice of the original copyright in any redistribution in source or binary form. It is much less constraining than the GPL. BSD allows the redistribution of derivative works under any license scheme. Moreover, it is possible to prepare derivative works by mixing BSD and proprietary code. Users can modify the mixed program and redistribute it for a fee without making the source code freely available. Changes may be made to the source code by a firm that then keeps the changes private and charges for the resulting binaries. The BSD is more commercial friendly than GPL and LGPL (Schadler et al., 2003), but it paves the way for code hijacking and increases the risk of project forking (Bonaccorsi & Rossi, 2005).
  • http://www.informationweek.com/shared/printableArticle.jhtml;jsessionid=EXB3ZCKHRTCUCQSNDLOSKH0CJUNN2JVN?articleID=166401756
  • http://news.cnet.com/Nessus-security-tool-closes-its-source/2100-7344_3-5890093.html
  • Examples include MySQL AB's database, Asterisk, Mozilla Firefox, and Trolltech'sQt development toolkit.Projects have taken their public software private after being GPL, e.g. Nessus
  • Increase the demand for complementary productsCompanies can benefit if they can offer products and services in proprietary segments of the market which complement the OSS (Lerner & Tirole, 2004). Lerner and Tirole (2004) argue that code release is like giving away the razor (the released code) to sell more razor blades. The company that releases code as open source expects to boost its profit by selling products and services in complementary market segments. This strategy will make sense when the profit increase in the proprietary complementary segment offsets the profit decrease in the primary segment (Lerner & Tirole, 2002a).  Set standard The release of code as open source develops network externalities that drive the establishment of a standard (Koenig, 2004). Some open source projects have as a goal the development of a standard such as API definitions, language extensions, or tool extensions. Releasing the code as open source increases the likelihood that what is proposed as the standard will be adopted (Gabriel & Goldman, 2005). Weaken competitors Companies release code as open source to weaken competitors (Lerner & Tirole, 2002a; Koenig, 2004). Releasing code as open source helps the company pursue new markets, position itself against established competitors more effectively (Koenig, 2004), and exert pricing pressure on competitors (Henkel, 2003). A company may also commoditize a particular layer of the software stack, eliminate competitors that are extracting revenue from that layer by releasing code as open source (Koenig, 2004). Build better relations with customersBy releasing code as open source, commercial companies may generate good public relations with customers by inviting them to fix bugs and contribute enhancement (Henkel, 2003). Being included in the development process makes customers feel they are a part of the community working on the project. Giving customers access to the source code lets them assist in fixing the bugs and adding the features that they care most about (Gabriel & Goldman, 2005). Benefit from external support Companies release code as open source to receive design and development support from other firms and external developers or users (Gabriel & Goldman, 2005; Henkel, 2003). An OSS project receives advice on the direction to pursue, new features and usability as well as help with implementation (Gabriel & Goldman, 2005). Nurture innovationCompanies release code as open source to find out what potential customers do with the code. This can lead to new products or new features for their existing products. By observing the problems other people are having, the company can innovate to solve or alleviate those problems (Gabriel & Goldman, 2005). Gain reputationCompanies release high quality OSS expecting to improve the company’s technical reputation (Henkel, 2003). Trigger gift economy Gabriel and Goldman (2002) argue that by releasing the source code as open source, companies provide gifts that trigger a gift-economy effect. The products released, i.e., technology, tools, and prototypes are of high value to outside users or companies and encourage them to work in areas important to the company that releases the code. Companies providing this gift will benefit from the development triggered by the code release in which various factors, i.e. users, third parties, and the evolution of products will affect each other and drive the value creation process.
  • Losing the intellectual property (IP) rights to the code may result in lost revenue. Gabriel and Goldman (2002) argue that companies must understand and isolate the true proprietary value of the code to the company before releasing it as open source. Usually companies would only release what is outside their core value as open source. But if what is valuable to external developers and firms is too small, the company will have a hard time surviving as others crowd into its space (Gabriel & Goldman, 2002). A company that releases its code may lose competitive advantages (Gabriel & Goldman, 2002; Henkel, 2003). The company that releases code as open source must consider the potential benefits to competitors from accessing the code in addition to any revenue lost (Hawkins, 2004). A company that releases its code as open source also faces two other risks: (i) high costs of contributing to the open source project and resolving conflicts between differences in company’s goals and community’s goals and (ii) possibility that part of the community forks out into a new independent community and evolves the code in a different way (Henkel, 2003; Lerner & Tirole, 2004).
  • The original Linux distributors package and sell their own versions of Linux. To end-users, these distributors sell Linux in various software packages and bundles. To IT administrators, they sell appropriate administration tools. To developers, they sell development tools. A critical success factor in Linux distribution is brand building. The niche and specialty OSS distributorsdevelop and distribute OSS other than operating systems. In this model, the company collects, maintains and develops OSS in a symbiotic relationship with the community. Typically, the major customers are Value Added Resellers (VARs) or Original Equipment Manufacturers (OEMs). Retailers of OSS distributions and complementary products sell software products or provide and sell additional documentation and information of OSS products. They do not develop OSS themselves, but focus on distribution and/or publishing. OSS development and interest enablers are either marketplaces that match potential buyers and sellers, or conference organizers who provide opportunities for the OSS community and business partners to meet. Service and support providers offer product or integration and service knowledge to customers.  
  • Increase the demand for complementary productsFirms participate in open source activities to generate revenues from the sale of related products (Henkel, 2003). For these firms, contributing to OSS makes sense because they need the OSS to complement their commercial offerings.  For example, manufacturers such as Compaq, IBM, and Sun as well as distributors such as Red Hat, SuSE, and TurboLinux contribute to the GNOME project since they need the GNOME desktop customized to their requirements (Henkle, 2003). The GNOME desktop is a piece of software that runs on GNU/Linux and several other UNIX operating systems. It was developed as a reaction to the widespread criticism that GNU/Linux was not user-friendly.  Nurture innovationThe link between open source and innovation processes is widely debated in the literature (von Krogh et al., 2003). Although it has been pointed out that most open source programs are imitations of proprietary solutions, it has been argued that the free circulation of ideas provides an environment that fosters innovation (Raymond, 1999) and reduces the cost for small firms to carry out innovative work (Bonaccorsi & Rossi, 2004). Developers who are also users of the software make most of the contributions to OSS projects (von Hippel & von Krogh, 2003). Open source development enables user innovation networks where users develop, produce, distribute and consume software. User innovation networks can function independently from manufacturers when: (i) users have sufficient incentive to innovate, and at least some users have an incentive to voluntarily reveal their innovations; (ii) diffusion of innovations is low cost and (iii) innovation can compete with commercial production and distribution (von Hippel, 2002). Use OSS as a low cost componentAn important reason for the increase in the use of OSS is its lower cost (Hawkins, 2004). Working with OSS enables firms to avoid license fees. Firms will use OSS if it is available at a low cost. Moreover, firms will participate in the production of commodity components of their product line as a method of reducing their development and maintenance costs (Wichmann, 2002; Hawkins, 2004).  Linux adoption is a good example of using OSS as a low cost component. Service providers see Linux as a way to deploy a system using commodity components and avoid paying license fees (Fink, 2003). When the operating system is not a differentiator, a firm that can produce bundles of hardware and software functionality to meet specific requirements at a low cost can gain competitive advantages (Wichmann, 2002). For many customers, the combination of relatively cheap Intel hardware and a free operating system fits their requirements better than an expensive albeit more powerful proprietary hardware and operating system combination (Wichmann, 2002). Set standardSetting a standard is another possible benefit pursued by commercial firms involved in open source projects. This is particularly important for infrastructure and tools (Raymond, 1999). Adopting open source models helps develop network externalities and imposes a standard in network industries (Lecocq & Demil, 2002; Gabriel & Goldman, 2005; Koenig, 2004).  Wichmann (2002) identifies the common interest in a single operating system as the main reason for hardware manufactures’ involvement in Linux development.  Implement strategy Firms participate in OSS projects to weaken competitors or decrease dependencies on suppliers (Henkel, 2003; Wichmann, 2002; Lerner & Tirole, 2002a; Koenig, 2004).  Companies may limit the code they release to that which provides non-essential functionality. For example, SAP released its SAP DB database, a software which is only needed to run the company’s core ERP software (Wichmann, 2002). Benefit from external supportFeedback and contributions from the open source community allow firms to lower software development and R&D costs and improve their software through the bug fixing activities. Firms that release the source code of their programs to the open source community can exploit the R&D activity undertaken by external developers to improve the code (Bonaccorsi & Rossi, 2004). Given a large beta-tester and co-developer base, almost every problem will be identified and solved quickly (Raymond, 1999).  Firms can obtain design or development support from external developers, improve the popularity and quality of the open source products, and build better relations with customers (Gabriel & Goldman, 2005; Henkel, 2003). Ideas gathered from the open source projects may also be used to develop commercial solutions (Bonaccorsi & Rossi, 2004).  Make money on complementary servicesSoftware is getting more and more complex. This increases the demand for support services and paves the way for firms to make money on complementary services instead of selling software.  Under a proprietary framework, a firm that supplies services such as installation, integration, maintenance or support of proprietary programs pays license fees to the companies that own these programs. The open source framework does not allow fee payment on open source software. This enables firms to use business models that rely on the supply of software related services (Wichmann, 2002) and contribute to the trend of moving software from being a commodity market to a service market (Bonaccorsi & Rossi, 2004). Gain reputationThe need to appear as a “good citizen” in the open source community may be another reason for a firm to contribute to open source projects. If the software under consideration is of interest only to a small number of firms, then “being a good citizen” translates into reciprocity between these firms. In addition to building reputation as a good open source player, releasing high quality OSS will also improve the company’s technical reputation (Henkel, 2003).
  • Source is \"Why Hackers Do What They Do: Understanding Motivation Efforts in Free/Open Source Software Projects,\" working paper 4425-03, MIT Sloan School of Management, 2003, http://opensource.mit.edu/papers/lakhaniwolf.pdf
  • http://www.programmableweb.com
  • From IBM presentation If your business is information-centric then need to include the potential future disruptions in your business strategy
  • Look for companies in your areaLook at what made them survive or fail and determine relevance to your business
  • Open API Best Practices – Making web sites into web services, John Muser, Programmable Web, web2.0 Expo 2007

Transcript

  • 1. Lead to Win Ecosystems, Open Source, API’s and Mashups May 20, 2009 Morning Brian Hurley, CEO Purple Forge Lead to Win
  • 2. Day 2: Morning Schedule 8AM Business Ecosystems 1 hour 9:00 Open Source 45 hour 9:45 Coffee Break 15 min 10 :00 API’s and Mashups 1 hour 11:00 Breakout Activity 25 min 11:30 Breakout Reports 30 min 12PM Lunch Break 2 Lead to Win
  • 3. Business Ecosystems Lead to Win
  • 4. Objective Introduce business ecosystem concepts and highlight potential value to Entrepreneurs in launching new companies. 4 Lead to Win
  • 5. Agenda • Value of Ecosystems to Entrepreneurs • Overview of Ecosystems • How Money is Made in Ecosystems • Examples of Ecosystems • Pitfalls 5 Lead to Win
  • 6. Value of Ecosystems to Entrepreneurs • Market entry barrier reduction • Access to customers • Operations cost reduction • Elimination of regional limitations • Makes niche markets viable • Leverages international disparities • Makes scarce skills abundant • Collaborative communities 6 Lead to Win
  • 7. Agenda • Value of Ecosystems to Entrepreneurs • Overview of Ecosystems • How Money is Made in Ecosystems • Examples of Ecosystems • Pitfalls 7 Lead to Win
  • 8. Business Ecosystems • Microsoft • Cisco • Google • eBay • GM • Ford 8 Lead to Win
  • 9. Microsoft Ecosystem • Microsoft slide from eclipse 9 Lead to Win
  • 10. Google Ecosystem Google Google Consumers platform • Search for information Content providers • Reveal interests • Create information • Consume targeted advertising • Stimulate consumer interest • Validate ideas and foster community • Contribute ideas for improvements • Provide delivery mechanism for • Become users of new commercial ads products Innovators Mashup creators, software suppliers, Google Advertisers engineers, open source developers who: • Deliver relevant content to users • Develop products that keep Google sticky • Pay Google • Generate revenue for themselves and Google • Monetize innovators’ new offers • Extend value of Google’s tools and platform 10 Lead to Win
  • 11. Context of Presentation • Focus will be on – Global ecosystems – Ecosystems which leverage online and communications technologies – Ecosystems with low barriers to entry – Ecosystems which depend upon members making money 11 Lead to Win
  • 12. Ecosystem Roles • Keystone organization provides to members Buyers – Reusable assets or services – Access to sellers Keystone – Access to buyers – Co-ordination/Community of ecosystem Reusable Sellers members on activities to strengthen the Assets ecosystem, e.g. development of reusable assets • Members – Buyers – Sellers – Sellers may participate as competitors and collaborators 12 Lead to Win
  • 13. Ecosystem Roles • An ecosystem may have many dependent niche ecosystems Buyers Buyers Keystone Keystone Reusable Reusable Assets Sellers Sellers Assets Buyers Keystone Reusable Sellers Assets 13 Lead to Win
  • 14. Types of Ecosystems • Product Centric • Span range of selling models: – e.g. AppStore, Amazon Webstore, CafePress – B2B, e.g. Amazon Webstore – Physical, Digital, Creative – B2C, e.g. Apple AppStore – Add-on, Derivative – Financial transactions – C2C, e.g. eBay • Service Centric • Span all market verticals: – e.g. uTest, oDesk, 99Designs – Auto parts – Technical, Creative, Commodity – Software – Service workflow management – Social Networking – Financial transactions • Information Centric – … – e.g. Jigsaw, LinkedIn, Facebook, YouTube – Information access/manipulation – Networking workflow management • Transaction Centric – e.g. PayPal – Financial transactions 14 Lead to Win
  • 15. Types of Keystones and Risk Not for Profit Not for Profit - Not for Profit - TYPE OF KEYSTONE Commercial - Commercial - - Voluntary Supplier Customer ORGANIZATION Large Small Donations Memberships Memberships Microsoft, 99 Designs, Joomla, EXAMPLES eBay, Google, oDesk, Drupal, Eclipse Lead to Win Apple Just Parts Apache ECOSYSTEM Medium (non- MEMBERS ABILITY TO strategic INFLUENCE Low to Low Low to High members) to High KEYSTONE AND Medium High (strategic ASSOCIATED members) SHARED ASSETS LEVEL PLAYING High Medium Low Medium Low FIELD CHANGE RISK 15 Lead to Win
  • 16. Agenda • Value of Ecosystems to Entrepreneurs • Overview of Ecosystems • How Money is Made in Ecosystems • Examples of Ecosystems • Pitfalls 16 Lead to Win
  • 17. How Money is Made • Ecosystem Member • Not for Profit Keystone • Commercial Keystone 17 Lead to Win
  • 18. How Money is Made – Ecosystem Members • Ecosystem members make money in the traditional manner - they sell products and/or services to customers. • The business operational model is non- traditional relative to how the ecosystem member engages with other members of the ecosystem. 18 Lead to Win
  • 19. How Money is Made – Ecosystem Members • In an ecosystem, a member competes and collaborates at the same time. • The ecosystem member may compete with other ecosystem members and with other ecosystems. • Significantly the ecosystem member also must collaborate with the ecosystem keystone organization and other ecosystem members relative to the development and health of the keystone and its re-usable assets. 19 Lead to Win
  • 20. How Money is Made – Not for Profit Keystone A not for profit keystone organization typically makes its money through some or all of the following means: – Selling memberships – Selling consulting services – Selling documentation and books related to the keystone's assets – Accelerating feature developments on the keystone's assets in return for cash – Selling support for the keystone's assets – Selling advertising to on keystone-associated websites, printed publications – Selling t-shirts/etc with the keystone logos/tag-lines – Soliciting donations from ecosystem suppliers/consumers, e.g. through Paypal – Running conferences and symposiums – Selling company/product listing services for ecosystem members – Selling training services/courses related to the keystone's assets – Selling certifications for products which use the keystone's assets – Selling infrastructure services which the ecosystem assets use, e.g. webservices – Selling sponsorships to commercial organizations in return for access to Ecosystem members, e.g. through offering of meetings, special offers/discounts from commercial businesses to its members – Government grants 20 Lead to Win
  • 21. How Money is Made – Commercial Keystone For-profit Keystone organizations may make money from any of the above, but may also include some or all of the following as key sources of revenue: • Sales channel and fees from associated transactions between consumers and suppliers of the channel (e.g. Apple Apps Store) • Selling products that are complimentary to the assets that the ecosystem is based on and which are not competing directly with the ecosystem members (e.g. Apple iPhone). 21 Lead to Win
  • 22. Agenda • Value of Ecosystems to Entrepreneurs • Overview of Ecosystems • How Money is Made in Ecosystems • Examples of Ecosystems • Pitfalls 22 Lead to Win
  • 23. Detailed Examples Keystone Type Example Buyers Large Not for Profit Eclipse Foundation Small Not for Profit Joomla Keystone Large Commercial Apple AppStore Reusable Sellers Small Commercial 99 Designs Assets 23 Lead to Win
  • 24. Eclipse • Not for Profit Keystone – Spin-out from IBM • Board Governance Model – “Eclipse Foundation” – Membership fees supported – Money can buy a board position – Members are predominately “sellers” • Members sell products/services based on the Keystone assets (“Rich Client Platform”) • Open Source Software – Eclipse License • Software is architected to easily support add- Buyers on’s and derivative products • Many companies have key commercial products that depend heavily upon the Eclipse Foundation platform, e.g. IBM, Borland, Oracle • Headquarters are in Ottawa! OSS Sellers 24 Lead to Win
  • 25. Reusable Asset • An open and extensible application framework – The Rich Client Platform • A open tool platform for developing extensible IDEs • An extensible IDE, especially the Java Development Toolkit, built using the Eclipse Platform • Used by over 4M developers worldwide 25 Lead to Win
  • 26. Eclipse Business Models 26 Lead to Win
  • 27. Financials (Mar’08) 27 Lead to Win
  • 28. - Membership 28 Lead to Win
  • 29. Detailed Examples Keystone Type Example Buyers Large Not for Profit Eclipse Foundation Small Not for Profit Joomla Keystone Large Commercial Apple AppStore Reusable Sellers Small Commercial 99 Designs Assets 29 Lead to Win
  • 30. Joomla • Not for Profit Keystone – “Open Source Matters” NFP corporation – No membership fees – Board members are drawn from community • Most popular open source CMS system for Websites (e.g. leadtowin.ca), Intranets • Software is architected to easily support add-ons which include: extensions (over Buyers 4,000) and themes Open Source • Open Source Software - GPL License Matters • Over 200,000 community users and OSS Sellers contributors 30 Lead to Win
  • 31. Joomla Ecosystem Small Business Customers Enterprises, etc. Website Joomla Joomla Development Conferences Books Services Joomla Custom Hosted Joomla Joomla Training Joomla Joomla Themes Code Websites Services Extension Stores Stores Development Joomla CMS Software - KEYSTONE ORGANIZATION (www.joomla.org) Bug Tracking, Release Management, Community Forums, Product Roadmap, Product Documentation, Directory of Extension Vendors, Advertising Services ($), Marketing Joomla 31 Lead to Win
  • 32. Joomla Template Providers 32 Lead to Win
  • 33. Joomla Extensions Over 4,000 extensions and growing 33 Lead to Win
  • 34. Joomla Niche Ecosystems Buyers Keystone Reusable Sellers Assets Buyers Keystone Reusable Sellers Assets Buyers Keyston e Reusabl Sellers e Assets 34 Lead to Win
  • 35. Joomla Service Providers 35 Lead to Win
  • 36. Joomla Financials 2007 • Donations $22,816 • Adsense Income $112,319 • Publishing Royalties $14,596 • Total Expenses $155, 766 36 Lead to Win
  • 37. Joomla Business Models For Joomla service providers creating Joomla-based CMS projects - 37 Lead to Win
  • 38. Joomla Business Models Models for selling Joomla themes and extensions: – Sell as a digital download, e.g. SOBI2 Distance Radius Search ($110) • Variants include: encrypted, license key, source with license, limitations based on number of site deployments, source with advertisements removed – Sell a subscription for ongoing access to one or more digital downloads, e.g. RocketTheme ($90/year) • Variants include: limitations based on number of site deployments – Sell a subscription for online access to documentation, e.g. Community Builder ($34/year) 38 Lead to Win
  • 39. Detailed Examples Keystone Type Example Buyers Large Not for Profit Eclipse Foundation Small Not for Profit Joomla Keystone Large Commercial Apple AppStore Reusable Sellers Small Commercial 99 Designs Assets 39 Lead to Win
  • 40. Apple AppStore • Commercial Keystone • Assets: – iPhone platform – Complete development environment – Channel to iPhone customers (service provider independent) – AppStore • Advertising • Fulfillment 16m+ iPhone/iTouch Owners • Financial purchase transaction via iTunes • Account management for dynamic pricing Apple AppStore • Automatic application update distribution Channel, Fulfillmen t and Platform Software Developers • Over 16M+ iPhone/iTouch customers and growing 40 Lead to Win
  • 41. If you can fart, you can earn $10,000 quot;... iFart - the most popular of the new and gaseous gang of iPhone and iPod Touch quot;entertainmentquot; apps - is pulling in around $10,000 per day....quot; http://www.theregister.co.uk/2008/12/26/ifart Christmas Day saw 38,927 downloads of iFart Mobile, making Comm’s InfoMedia $27,249 in net income for one day of sales! Lead to Win
  • 42. Pre-Apple Ecosystem Pre-Apple Mobile-phone software development has been around for a long time. But before the application stores made their debut, finding and installing the apps was rather complicated. The challenge for developers was to bring their apps to the attention of users, while users often had to attach data cables and download the software. Even Java applications, which could be distributed through web downloads, were tough to get into users' hands when it was difficult to get people to visit a website on their handsets. As a result, mobile-application developers depended on hard- to-get bundling deals with carriers. If a developer could strike a deal with a carrier to get their software preloaded on its phones, you were able to reach the customers -- if not, you were out in the cold. And in all cases carriers could dictate their own terms. Lead to Win
  • 43. Access to Buyers… • Apple shipped 2.3M iPhones in 2007 and 13.7M in 2008 • The iphone is generating 67% of total mobile internet traffic • Admob data shows that the iPhone represented 48% of total smartphone ad inventory on their network in December 2008 43 Lead to Win
  • 44. Access to Buyers… http://www.comscore.com/press/release.asp?press=2545http://rubiconconsulting.com/downloads/whitepapers/Rubicon-iPhone_User_Survey.pdf 44 Lead to Win
  • 45. Disruption - It’s All About the Channel • Direct access to iPhone/iTouch customers regardless of Wireless service provider • Where the AppStore leads over rivals is: – Easy click to find and download an app – Paying for it through iTunes. 45 Lead to Win
  • 46. AppStore Characteristics • The App Store is very hit-driven. Almost all of the sales from the store are driven by the apps in the Top 100 chart. • Once an app falls off the chart it’s typically a matter of days before sales numbers shrink down into the teens or even single-digit numbers per day. • Most AppStore purchases fulfills the need of instant gratification, not traditional “need” • When it’s only a buck or two at stake the buyer’s remorse factor is minimal. • Desktop apps don’t have this benefit, where they’re typically sold for $20+ and up so impulse buys there are nowhere near as frequent as with iPhone apps. • Consumption is more like a cup of coffee or a candy bar. Lead to Win
  • 47. 99 Designs Business Model Buyers  Click to Buy (via iTunes account) 16m+ iPhone/iTouch Owners Apple  30% of App Selling Price Apple AppStore Seller (Winner only)  70% of App Selling Price Channel, Fulfillm Software ent and Platform Developers 47 Lead to Win
  • 48. $Disruptive – Absolutely! Dec 2008 - Apple's (AAPL) iPhone and iPod touch customers have downloaded some 300 million software apps since Apple started selling them in July. We estimate that Apple has booked $50 million to $100 million in revenue so from those sales. http://www.alleyinsider.com/2008/12/estimating-apple-iphone-app-sales-so-far-50-100-million-in-revenue-aapl Lead to Win
  • 49. Pitfalls • Apple can: – Change the terms and conditions at will – Decide to include your applications functionality into the base iPhone platform – Change the financial model at will – Negotiate special contracts with individual suppliers • Apple is the gatekeeper of what gets into the store and what doesn't 49 Lead to Win
  • 50. Detailed Examples Keystone Type Example Buyers Large Not for Profit Eclipse Foundation Small Not for Profit Joomla Keystone Large Commercial Apple AppStore Reusable Sellers Small Commercial 99 Designs Assets 50 Lead to Win
  • 51. 99 Designs Contest Holders 99 Designs Channel, Workflow/ Design Transaction Community Management 51 Lead to Win
  • 52. 99 Designs – Workflow for Buyers 52 Lead to Win
  • 53. 99 Designs – Posting the Project 53 Lead to Win
  • 54. 99 Designs – Project Active 54 Lead to Win
  • 55. 99 Designs – Managing the Project 55 Lead to Win
  • 56. 99 Designs – Engaging with Designers 56 Lead to Win
  • 57. Winning Logo 57 Lead to Win
  • 58. 99 Designs – Handover of Content 58 Lead to Win
  • 59. 99 Designs - Business Model Buyers  $(Contest Award )+ $(Posting Fee) Contest Holders 99 Designs  $(Posting Fee) + 10% $(Contest Award) 99 Designs Seller (Winner only)  Channel, $(Contest Award – 10%) Workflow/ Design Transaction Community Management 59 Lead to Win
  • 60. Disruptive – Absolutely! 60 Lead to Win
  • 61. Other Example Ecosystems Keystone Name URL Description Apple Apps Store http://www.apple.com/iphone/features/appstore.html Allows individuals to sell applications to Apple iPhone phone users, handles delivery and payment, payment is via iTunes accounts Google Android Market http://www.android.com/market Allows individuals to sell applications to Android mobile phone users, handles delivery and payment using Paypal accounts Amazon Webstore http://webstore.amazon.com Allows individuals to sell their products online, providing access to Amazon shoppers and Amazon store tools, handles payments using Amazon accounts 99Designs http://www.99designs.com Connects graphics designers with customers oDesk http://www.odesk.com Connects professional services teams or individuals with customers and provides and environment to manage the transaction and working relationship between professionals and customers Shutterstock http://www.shutterstock.com Connects photographic/graphic designers with customers Innovation Exchange http://www.innovationexchange.com Companies/individuals post challenges and cash, suppliers post responses Mechanical Turk http://www.mturk.com People post questions/tasks, suppliers post answers/accept task Cafepress http://www.cafepress.com Individuals/companies generate graphic content, Cafepress puts the graphics onto physical products such as mugs, shirts, etc and handles fulfillment Amazon Kindle https://dtp.amazon.com Allows individuals to self publish eBooks via Amazon and their Kindle eBook reader uTest http://www.utest.com Connects testing professionals with customers Crowd Spring http://www.crowdspring.com Similar to 99Designs Lulu http://www.lulu.com Allows individuals to self publish books Beta Test http://www.ibetatest.com Connects testers with software publishers (e.g. iPhone) Eclipse Foundation http://www.eclipse.org Links Eclipse product consumers with suppliers who build on top of the Eclipse open source RCP platform Just Parts http://www.justparts.com Links consumers of auto parts with suppliers Top Coder http://www.topcoder.com Links software designers with companies who respond to contest proposals Audio Life http://www.audiolife.com Similar to Cafepress but oriented towards music artists who can produce artist related graphics, which Audio Life will then manufacture on physical products and ship to customers 61 Lead to Win
  • 62. Agenda • Value of Ecosystems to Entrepreneurs • Overview of Ecosystems • How Money is Made in Ecosystems • Examples of Ecosystems • Pitfalls 62 Lead to Win
  • 63. Leveraging an Ecosystem • Create an Ecosystem Keystone Organization – NFP keystones are not a method to make money for the keystone owner except by selling/leveraging the IP into a commercial company which also holds the “community”, e.g. XEN, SugarCRM, JBoss – Commercial keystones can potentially be very profitable - look for discontinuities – regional, new cost structures due to technology, etc • Join an existing Ecosystem – Need to chose carefully 63 Lead to Win
  • 64. Joining an Ecosystem - Pitfalls • Health of Ecosystem – Size of customer base which “pays” – Size and participation of community involvement for support, development, awareness – Competitive alternatives, e.g. Drupal vs Joomla – Keystone focus on internal jobs/priorities/existence rather then community – Stability of financial resources of the ecosystem • Ability of a Member to Influence the Ecosystem – e.g. ensuring that the platform does not “absorb” your product offering into the platform – e.g. Eclipse can set the platform roadmap according to major paying players – e.g. Apple AppStore can change the developer agreement, fees, return policies, approval policies at will • Expectation of a “level playing field” for all members – e.g. Apple can negotiate special AppStore deals with major service providers and manufacturers – e.g. Apple can decide to build a product that does what a supplier’s product does and can exclude the competitive product from the AppStore 64 Lead to Win
  • 65. Open Source Lead to Win
  • 66. Objective • Introduce Open Source concepts, potential benefits and pitfalls for the Entrepreneur 66 Lead to Win
  • 67. Agenda • Value of Open Source to Entrepreneurs • What is Open Source? • Why make a product Open Source • How to make money from Open Source 67 Lead to Win
  • 68. Value of Open Source to Entrepreneurs • Can be a strategic component of a business model • Can use open source products as a means to reduce: – operations costs – development costs • Open source ecosystems which can offer member benefits as discussed in the Ecosystem module 68 Lead to Win
  • 69. What is Open Source? • Social Culture • Development Model • Legal Contract/Restrictions • Component of a Business Model 69 Lead to Win
  • 70. Examples of Types of Open Source Open SPARC – Processor ASIC Design Arduino – physical computing platform Wikipedia – Documentation GIMP – Image Manipulation Software Wiki Commons – Images, Media 70 Lead to Win
  • 71. Open Source • Focus of this presentation is on – Software and Content as they are the dominant Open Source product type – Business perspective 71 Lead to Win
  • 72. Open Source Definition per Open Source Initiative 1. Free Redistribution 2. Source Code 3. Derived Works 4. Integrity of The Author's Source Code 5. No Discrimination Against Persons or Groups 6. No Discrimination Against Fields of Endeavor 7. Distribution of License 8. License Must Not Be Specific to a Product 9. License Must Not Restrict Other Software 10. License Must Be Technology-Neutral 72 Lead to Win
  • 73. Open Source Licensing Top 20 Most Commonly Used Licenses in Open Source Projects • More than 60 types of licenses • Varying degrees of restrictiveness – Unrestrictive, e.g. BSD – Restrictive, e.g. LGPL – Highly Restrictive, e.g. GPL http://www.blackducksoftware.com/gpl3 73 Lead to Win
  • 74. GPL v2 Overview • GPL v2 is intended to – ensure that modified versions of the code it covers remain free and open source – spread copyleftism by mandating the use of the GPL v2 for distributed adaptations of GPL v2-licensed code • The GPL v2 grants rights under certain provisos. Briefly, a licensee of GPL v2-licensed software can: – copy and distribute the program's unmodified source code (Section 1) – modify the program's source code and distribute the modified source (Section 2) – distribute compiled versions of the program, both modified and unmodified (Section 3) – provided that: all distributed copies (modified or not) carry a copyright notice and exclusion of warranty (Section 1 and 2) – all modified copies are distributed under the GPL v2 (Section 2) – all compiled versions of the program are accompanied by the relevant source code, or a viable offer to make the relevant source code available (Section 3) 74 Lead to Win
  • 75. Creative Commons Overview Creative Commons licenses contain four major permissions: • Attribution (by) requires users to attribute a work's original author. All Creative Commons licenses contain this option, but some now- deprecated licenses did not contain this component. • Authors can either not restrict modification, or use Share-alike (sa), which is a copyleft requirement that requires that any derived works be licensed under the same license, or No derivatives (nd), which requires that the work not be modified. • Non-commercial (nc) requires that the work not be used for commercial purposes. 75 Lead to Win
  • 76. Choosing the Right License • ADP developers avoid code that is licensed using the General Public License • The reason: – The license requires developers who modify GPL code to make the modified code public, effectively giving up their intellectual property. – Instead, the company uses the BSD open-source license, based on the open-source Berkeley Software Distribution Unix, which allows developers to keep modified code proprietary. http://www.informationweek.com/shared/printableArticle.jhtml;jsessionid=EXB3ZCKHRTCUCQSNDLOSKH0CJUNN2JVN?articleID=166401756 76 Lead to Win
  • 77. Nessus Moves from GPL to Proprietary License Among the reasons for the move away from the GPL are two issues that traditionally open source advocates have touted as the license's strengths, namely community development and the quot;freedomquot; of code such that is can be re-used and redistributed by anyone. In a mailing list posting, Deraison commented that, quot;Virtually nobody has ever contributed anything to improve the scanning engine over the last 6 years.“ Deraison also took aim at the GPL itself, which, in his opinion is not in the competitive best interests of his firm. quot;A number of companies are using the source code against us by selling or renting appliances, thus exploiting a loophole in the GPL,quot; Deraison wrote. quot;So in that regard, we have been fueling our own competition and we want to put an end to that. Nessus3 contains an improved engine, and we don't want our competition to claim to have improved quot;theirquot; scanner.quot; http://news.cnet.com/Nessus-security-tool-closes-its-source/2100-7344_3-5890093.html 77 Lead to Win
  • 78. Owner of the Copyright – Dual Licensing • As the owner of the copyright for software released under GPL, can distribute versions without making the enhancements public and under a non-GPL license • Dual licensing is used by the copyright holders of some free software packages advertising their willingness to distribute using both a copyleft free software license and a non-free software license. The latter license typically offers users the software as proprietary software or offers third parties the source code without copyleft provisions. • Allows the holder to offer customizations and early releases, generate other derivative works or grant rights to third parties to redistribute proprietary versions all while offering everyone a free version of the software. • Sharing the package as copyleft free software can benefit the copyright holder by receiving contributions from users . These contributions can be the support of a dedicated user community, word of mouth marketing or modifications that are made available as stipulated by a copyleft license. 78 Lead to Win
  • 79. Sharing Source Code =/= Open Source • Some customers may require that source code must be made available as part of a sale, e.g. Nortel and 3rd party protocol libraries • Source code can be shared under a legal contract that is not related to any OSS license • Owner can specify limits and controls that the customer must apply when handling the source code to protect the IP, e.g. – only a specific set of named people only may access – stored on a separate secured server – no redistribution of modified source code 79 Lead to Win
  • 80. Why Make a Product Open Source • Increase the demand for complementary products • Set standards • Weaken competitors • Build better relations with customers • Build better relations with partners • Benefit from external support • Nurture innovation • Gain reputation • Provide gifts that trigger gift economy effect which ultimately encourages others to work in a company 80 Lead to Win
  • 81. Risks When Releasing Open Source • Loss of revenue due to loss of intellectual property rights • Loss of advantage given that competitors can use code (e.g. Nessus) • High costs of contributing to the open source project and resolving conflicts between differences in company’s goals and community’s goals • Part of the community branches out with the software 81 Lead to Win
  • 82. How to Make Money Name Idea behind the model Revenue comes from media distribution, branding, training, consulting, custom Support and Maintenance development, and post-sales support. A no-charge open source product is used as a loss leader for traditional commercial Loss Leader software. Companies in business primarily to sell hardware use the open source model for Hardware Sales enabling software such as driver and interface code. A company distributes books, computer hardware, and other physical items Complementary Products associated with and supportive of . Is created and distributed primarily to support access to revenue-generating online Service Enabler services. One company charges other companies for the right to use its brand names and Brand Licensing trademarks in creating derivative products. A company offers an open source version of the product and sells a closed source Sell Enhanced Versions enhanced version of the product under dual license model. 82 Lead to Win
  • 83. Open Source Business Models 83 Lead to Win
  • 84. Why Do Firm’s Participate in Open Source Projects • Increase the demand for complementary products • Nurture innovation • Use as a low cost component • Set standard • Implement strategy • Benefit from external support • Make money on complementary services • Gain reputation • Building relationships • Influencing direction of product for business advantage 84 Lead to Win
  • 85. Why Do Individuals Participate in Open Source Projects • A 2003 MIT study shows that motivations are quite diverse and include, in decreasing order of relevance, • intellectual engagement; • knowledge sharing; • the product itself; and • ideology, reputation, and community obligation. • Understanding motivations is important when attempting to leverage or build an OSS community http://opensource.mit.edu/papers/lakhaniwolf.pdf 85 Lead to Win
  • 86. Open Source Pitfalls • Ecosystem Business Models pitfalls all apply when looking to join an Open Source product business ecosystem • “AS IS” code – Customer issue is your issue • Infringement Liability – Patents – Wrongful inclusion of third party code • Minimizing or balancing effort on open source projects relative to “social good” versus business success objectives • Understanding licenses and implications relative to proprietary value add product offer – When using OSS inside a product ensuring that proprietary additions are not “caught” in the GPL relative to disclosure – Compromised due to use of OSS with different licenses 86 Lead to Win
  • 87. 15 Minute Coffee Break 87 Lead to Win
  • 88. Mashups and Open API’s Lead to Win
  • 89. Objective • Introduce Open API’s, Mashups and associated opportunities for Entrepreneurs 89 Lead to Win
  • 90. Agenda • Value to Entrepreneur • What are Mashup’s and Open API’s • How is Money Made • Why are they important • Pitfalls 90 Lead to Win
  • 91. Value to Entrepreneurs • Disruptions to traditional value chains presents opportunities – entry to established markets possible due to • changing economics • changing operational cost structures – new product and service markets created • Reduced cost for online product/service development • Access/extension to established customer channels 91 Lead to Win
  • 92. APIs and Open APIs • API is the interface that a computer system, library or application provides to allow requests for services by other computer programs, and/or to allow data to be exchanged between them. • An API may be available free or for a fee 92 Lead to Win
  • 93. Lead to Win • Uses API’s: – Twitter – Digg, Delicious, Facebook and other social bookmarking services – YouTube – Slideshare – Google Maps – Google Translate – Google Analytics – Crowdsound • Exports: – RSS interface 93 Lead to Win
  • 94. Mash-ups • Mash-ups are interactive web applications that draw upon content retrieved from external data sources to create entirely new services • This type of web-based integration aggregates and combines third-party data • 1+1=3 94 Lead to Win
  • 95. Mashup Examples • A variety of web applications use open APIs, such as Google maps. This has enabled programmers to create combinations, or mash-ups, of Google Maps with other information sources, e.g. – include a map where all housing ads from Craig’s List are placed on a Google Map with relevant information, or – the plotting of all of a city’s crime incidences on a map with the time and date of occurrence • Other web application mash-ups include video and photo mash- ups, where designers mash photos or video with other information that can be associated with the attached metadata (i.e. tags), e.g. – taking news headlines and displaying photos tagged with the particular words. News and RSS feed mash-ups such as NetVibes and My Yahoo aggregate various feeds and present them on a website, enabling users to create a personalized page 95 Lead to Win
  • 96. Weather Bonk 96 Lead to Win
  • 97. Flickrvision 97 Lead to Win
  • 98. More Examples http://www.mashupfeed.com/ 98 Lead to Win
  • 99. API’s and Mashups by the Numbers Top API’s used by mashups Types of mashups Mashups over time http://www.programmableweb.com/ 99 Lead to Win
  • 100. Agenda • Value to Entrepreneur • What are Mashup’s and Open API’s • How is Money Made • Why are they important • Pitfalls 100 Lead to Win
  • 101. API Business Models Model Where’s the Money? Revenue Sharing Via affiliates; advertising (e.g. Amazon Affiliate) Subscription Per time period; classic SaaS (e.g. Salesforce priced per seat) Tiered Pricing in volume buckets Per-call metering Fee per API call Utility API is free, but fee for resources (CPU, storage, bandwidth) (e.g. Amazon E2C pay-for-usage) Pay per conversion or sign-up Commissions and referrals Ad-supported is free, ad-free is Advertising for free version, one of other models premium for premium Units Different calls priced at different levels (e.g. AdWords) 101 Lead to Win
  • 102. Agenda • Value to Entrepreneur • What are Mashup’s and Open API’s • How is Money Made • Why are they important • Pitfalls 102 Lead to Win
  • 103. Why are API’s and Mashups Important? Value Benefits Communications / • Feedback • Social network sharing Engagement • Marketing channel (particularly if the derivative work is complementary to the source data/service, e.g. Salesforce) Leveraging • Reduces cost to develop web-based business • Professional distribution/management for your and UCC content (e.g. Slideshare, YouTube, Box.net) • Syndication to extend reach Content Source • User Created Content (UCC) (e.g. community, managed, new) • Professional created content (e.g. news, images) • Derived Content (e.g. 1+1=3) • Revenue generating content (e.g. Adsense) Business Enabler • Can lower barriers to working with your company • Removes big technical barriers for complex web applications (e.g. scaling, storage, management) • Enabling Derivative/Complementary Products such as: Add-ons (e.g. Salesforce de-duplication); Integration with complementary products (e.g. Salesforce ERP integration) Can be Disruptive • Different economies of scale • Broader market reach • Changes or creates new value chain models – opportunities for new ecosystems to be created or joined 103 Lead to Win
  • 104. Changing the Context of an Application 104 Lead to Win
  • 105. Changing Ways of Doing Business • “Content” is at the heart – How content is created (e.g. 1 + 1 = 3) – How content is distributed – How content is managed – How content is monetized – How content is licensed – How content is … 105 Lead to Win
  • 106. Types of User-Created Content 106 Lead to Win
  • 107. Distribution Platforms for User-Created Content 107 Lead to Win
  • 108. Value Chain – Traditional Offline Media Publishing 108 Lead to Win
  • 109. Value Chain – Internet Based User-Created Content 109 Lead to Win
  • 110. Economic Incentives and Benefits for UCC Value Chain Participants 110 Lead to Win
  • 111. Agenda • Value to Entrepreneur • What are Mashup’s and Open API’s • How is Money Made • Why are they important • Pitfalls 111 Lead to Win
  • 112. Dynamic Environment 2008 2009 LEGEND: X = dead O = bought by another company http://meish.org/2009/05/13/game-web-2over/ 112 Lead to Win
  • 113. API’s and Mashups Pitfalls • Dependencies – business and technical – Cost of switching due to issues or changes in terms of use – API support and long-term viability – Scaling • Business relationships – Lack of service level agreements - your warranty is only as good as those your business is built on – M&A activities • Commercial vs non-commercial use – API terms of service usually specify • Copyright law issues – What data can be re-used and how – Data ownership (e.g. maps, weather) • Legal issues – Where customer/user-related data is geographically stored (e.g. US, EU) 113 Lead to Win
  • 114. Moment of Truth • Breakout Activity (1 hour total) – Discussion in break-out groups - 30 minutes – Presentations (and discussions) in full class - 10 minutes each • Break into 4 teams • Nominate one person to moderate the discussion • Nominate one person to act as scribe • Nominate one person to present the report back to the main group • Pick one (or more if time permits) person's opportunity • Discuss and identify specific ways their opportunity already does, or could, take advantage of open source, mashups, open API’s and/or business ecosystems to - reduce costs, reduce time to revenue • Discuss and prioritize recommendations to the opportunity owner • Return to class PROMPTLY at 11:30! • Present results of your session to full class 114 Lead to Win