Companies often ask how to build their partner ecosystem. This presentation explains the concept of software ecosystems and gives answers to very pragmatic questions.

1. Copyright © 2015 Dr. Karl Popp (1)
LEVERAGING SOFTWARE
ECOSYSTEMS –
PRAGMATICS OF SUCCESS

2. Copyright © 2015 Dr. Karl Popp (2)
Agenda
• The magic of ecosystems of companies
• The theory of software ecosystems
– Types of ecosystems
– Goals
• Pragmatics of software ecosystems
– Questions on software ecosystems get pragmatic answers

3. Copyright © 2015 Dr. Karl Popp (3)

4. Copyright © 2015 Dr. Karl Popp (4)
Your Company’s Networks Might Matter More
than Its Strategy
• Uber, the world’s largest
taxi company, owns no
vehicles.
• Alibaba, the most valuable
retailer, has no inventory.
• Ariba, the largest B2B
supplier network, has no
inventory.

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INTRODUC
SOFTWARE
ECOSYSTE

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Software Ecosystem
Products,
Assets or
Services
Payments
Standards
Bodies
Customers
Software
vendor
Software
Partners
System
Integrators
Compe-
titors
Open
Source
Commu-
nity
Suppliers
Acqui-
sition
Targets

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Exchange of products,
services,payments
CustomerSupplier
Partner
Products,
Assets or
Services
Payments
Provide
Software
Sell
Software
System
Integra-
tors
Software
vendor
Revenue
License Fee

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Types of ecosystems
Supplier
Ecosystem
Customer
Ecosystem
Partner
Ecosystem
System
Integra-
tors
Standards
Bodies
Customers
Partners
Compe-
titors
Acquisi-
tion
Targets
Suppliers
Open
Source
Commu-
nity

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GOALS F
SOFTWA

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Financial goals
• Monetize on the partner ecosystem
– Increase existing or create new revenue
streams
– E.g. by letting partners sell products or by
charging fees for certification
• Save cost
– Lower cost of development, support,
maintenance, education, marketing
– E.g. by outsourcing tasks to partners like
support, maintenance, sales, training

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Product related goals
• Strengthen market presence
– Diversified partnership strategies for regional
and local markets
• Strengthen software vendor´s offerings
– Partners fill whitespaces and provide
complementing solutions
• Innovate and co-innovate solutions
– A sound innovation strategy of a software
vendor contains a mix of internal and external
innovation.

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Network effect related goals
• Maximize ecosystem gravity
– Hypothesis: increasing the number of
participants in the ecosystem attracts even
more new members for the ecosystem.
• Maximize retention of participants in
the ecosystem
– Retention of participants in the ecosystem is
based on two important factors: incentives
and lock-in.

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PRAGMATI
SOFTWARE
ECOSYSTE

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Q 1: Is finding partners is a high effort activity?
• Answer: NO
• Why:
– There always exists an ecosystem
– Expectation of revenue pulls partners into a
company´s ecosystem

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Q 2: Is educating partners a high effort
activity?
• Answer: Depends on approach
• Example
– SugarCRM offers most of its source code
under open source license
– „Partners never talked to us, they downloaded
the code and changed it.“
• Strategy:
– APIs, SDKs, Developer networks, Software
stores lead the way

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Q 3: Will the partner ecosystem work?
• Answer: YES
• Strategy:
– Be a keystone, not a dominator.
– Grow low-impact partnerships massively.
– Staff high-impact partnerships
with growth of ecosystem.

17. Copyright © 2015 Dr. Karl Popp (17)
Summary
• Every company has a software ecosystem
– Leverage it!
• You will be successful if:
– Partners can execute on revenue expectations
– You establish low entry thresholds for partners
to enter the ecosystem
– You establish niches for partners and offers
help to partners

18. Copyright © 2015 Dr. Karl Popp (18)
Background information
Business Models
in the software industry
http://softwarebusinessmodels.net
Profit from Software
Ecosystems
ISBN-13: 978-3842300514
Business Models, partnership
models and ecosystems in the
software industry
Examples from over 50
software companies