Business Ecosystems Overview


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Business Ecosystems Overview

  1. 1. Contact Tony Bailetti, Director, TIM program. 613 829 8885 613 520 2600 ext 8398 Department The TIM program is offered by the Department of Systems and Computer Engineering, Faculty of Engineering and Design. The Department of Systems and Computer Engineering has 46 faculty members and 30 adjunct professors. It has special strengths in the areas of telecommunications, computer systems, software engineering, and the analysis and management of engineering processes.
  2. 2. TIM initiatives Innovation Engagement Solve significant problems •  Create and capture value in flat •  Keeps up with industry issues •  Better approaches to markets commercialize market offers •  Research with Nortel and from Ontario technology Eclipse •  Open source as an economic companies environment, not free SW •  Projects or students with 50 •  Make money from market small innovative technology •  Co-creation in product offers that rely on open companies and volunteer development context source organizations •  User-centric innovation in •  Grow micro tech •  Spinning out Big Blue Button volunteer sector businesses during (BBB) and Blindside Networks meltdowns •  Shift in customer value from •  Established Coral CEA – discontinuities Carleton, IBM, Nortel, Eclipse, ITAC
  3. 3. Acknowledgement This presentation has benefitted from the experience and contributions of the following individuals: •  Peter Carbone (Chair of Coral CEA) •  Brian Hurley (CEO, Purpleforge) •  Douglas King (TIM, Carleton University) •  Steven Muegge (TIM, Carleton University) •  Stoyan Tanev (TIM, Carleton University) •  Michael Weiss (TIM, Carleton University)
  4. 4. James Moore introduced the term business ecosystems in 1993. His work won the McKinsey Award for article of the year. Moore, Please read: James F. (1993) Predators and Prey: A New Ecology of Competition, Harvard Business Review, May/June, 75-86. Moore (1993) defined an 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. Other references include: Iansiti, Marco and R. Levien (2004) The Ecology of Strategy, Harvard Business Review, March 2004, 68-78. Iansiti, M., Levien, R. (2004). Response to Strategy as Ecology. Harvard Business Review, September 2004, 132-133. Iyer, Bala, Lee, Chi-Hyon., Venkatraman, N. (2006) Managing in a “Small World Ecosystem”: Lessons from the software sector. California Management Review. 48(3), 27-47.
  5. 5. 1. Keystone •  Small organization that has large impact •  Owns and advances platform •  Decreases costs and increases trust •  Creates niches, fills gaps and acquires and retains members •  Decreases barriers to enter markets for members 2. Out of box platform Platform is comprised of assets, processes and norms that: •  Harness creative individuals to co-create new value and take it to market •  Scale globally 3. Niche •  Group that defines space •  Performs a distinct function which (i) addresses a need and (ii) adds value to ecosystem •  Niche player uses and contributes to platform and interacts with other niches 4. Member •  Organization or individual; supplier, user, customer, distributor, etc. •  Different member types •  May or may not be part of a niche (e.g., X in diagram is not in a niche)
  6. 6. Ecosystems are anchored around: •  Single company (e.g., Google, Apple, Microsoft, e-Bay, Amazon) •  Supplier consortia (e.g., Scope Alliance) •  Open source community (e.g., Eclipse, Linux, Apache, Mozilla) •  University (e.g., Talent First Network, Lead to Win) •  Members (e.g., Coral CEA)
  7. 7. Diagram was adapted from: Iyer, Bala and Thomas H. Davenport (2008)Reverse Engineering Google's Innovation Machine, Harvard Business Review, April, 59-68.
  8. 8. For information on the Eclipse ecosystem please refer to:
  9. 9. Vertical Horizontal Ecosystem Way to organize Focus Control over Transactions of Harness innovation activities that goods across a large number of produce goods and diverse organizations deliver services worldwide Creative people find Difficult to address Difficult to align •  Easier to combine offers it breadth and many product into solutions for which importance of inter- road maps of customers are willing to company relationships customers and pay other companies •  Shorter time to cash •  Lower development cost Best suited Mass production Craft production •  Continuous innovation •  Flexible specialization •  Peer to peer production Slide builds on information in: Moore, James F. (2006) Business Ecosystems and the View from the Firm, The Antitrust Bulletin, Vol 51, No. 1/Spring, 31-75. Draft of paper MooreBusinessecosystemsandth.pdf
  10. 10. Old vs new economy Economy Industrial (old) Creativity (new) Basis of •  In-house tech capability •  Ability to harness global creativity competition to benefit company’s customers •  Product excellence and channel partners •  Access to scarce resources •  Pull sales and supply chains •  Push sales Solution Low Very high diversity Improve How company’s products How customers feel about their function experiences with company’s market offers Knowledge Source of advantage Commodity Enterprise wide Identify and remove the causes Identify and exploit opportunities processes of defects and errors to innovate and take educated risks
  11. 11. The example illustrates the power of a business ecosystem. Consider a concrete business opportunity identified by a leading US orchestrator that requires a diverse set of capabilities to be pulled together to meet customer needs that are beyond the capability of any single small company. The ecosystem members' response would be as follows: •  SME3, a niche player, assume the ownership of the overall value proposition, and identifies which components are required to be assembled •  Companies that can contribute to the customer value proposition are identified (SM1, SME2 and SME4) •  Companies and buyer (a European customer) collaborate around the keystone's dominant design to rapidly prototype, validate, and implement the required value proposition and then deliver it to the buyer’s organization •  Companies that are members of the ecosystem are able to commit an ongoing supply of rapid innovation beyond anything a single larger player can commit. The response described above will be disruptive to large competitors and generally beneficial to ecosystem members and all customers. Please refer to Carbone (2009) at
  12. 12. Ontario Talent First Network (TFN) Users and producers of open source assets and users and suppliers of market offers that rely on open source Big Blue Button (BBB) Users and producers of web conferencing systems for education applications Coral CEA IBM, Nortel, Carleton, Eclipse and ITAC; commercialization ecosystem to exploit an ICT discontinuity Lead to Win (LTW) Content suppliers, serial entrepreneurs, capital suppliers, lead customers, and individuals interested in starting and growing new businesses for the new economy Sparked by successful LTW program run by Carleton after 2002 tech bubble burst