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Product Lines and Ecosystems: from customization to configuration
The document discusses the impact of digitalization on software platforms and systems engineering, emphasizing the importance of superset software platforms for implementing DevOps, DataOps, and MLOps. It highlights how digital transformation necessitates a shift in business models and product development strategies to avoid commoditization, with emphasis on collaboration within ecosystems. The key takeaways include the need for continuous innovation, the role of various ecosystem participants, and the transition to software-centric approaches in systems engineering.
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Product Lines and Ecosystems: from customization to configuration
- 1. Product Lines andEcosystems from customization to configuration Jan Bosch Director Software Center www.software-center.se Professor of Software Engineering Chalmers University of Technology Gothenburg, Sweden.
- 2. • Digitalization drivesthe adoption of Ops, i.e. DevOps, DataOps, MLOps, putting unique, new challenges on software platforms • Superset software platforms are the only cost effective solution for DevOps • Superset platforms affect the way we conduct systems engineering Three Key Take-Aways
- 3. • Vem ärjag? Wie ben ik? Who am I? • Digitalization • Superset platforms • Three layer product model • Systems engineering • Conclusion Overview
- 4.
- 5. Software Center Mission: Tosignificantly improve the digitalization capability of the European Software-Intensive industry
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- 8. • Vem ärjag? Wie ben ik? Who am I? • Digitalization • Superset platforms • Three layer product model • Systems engineering • Conclusion Overview
- 9. How many companiesthat were on the Fortune 500 list in 2000 are still on the list in 2014?
- 10. Disruption Is TheNew Normal • Jim Collins (Built to last): Companies last, on average, 30 15 10 years on the Fortune 500 list. And that time period is decreasing • Main cause: Companies fail to innovate and to build new core capabilities Digitalization Is The New Disruptor!
- 11. Digitalization Digitalization is theuse of digital technologies to change a business model and provide new revenue and value- producing opportunities; it is the process of moving to a digital business. - Gartner
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- 13. Digitalization Value Time upgrade electronics Replace mechanics Value Time continuous software deployment incl.AI models • Differentiation through mechanics and electronics is increasingly difficult • To avoid commoditization, new solutions and services are required • Digitalization of products, data from the field and changed business models can provide differentiation Hypothesis: growing revenue through new, continuous business models based on a digitalized product portfolio is the most promising strategy to increase differentiation and avoid commoditization
- 14. • Product generations •Annual software updates • DevOps, DataOps and AI/MLOps • A/B testing • Reinforcement learning How do we deliver value to customers? shortening of value delivery cycles
- 15. Bosch, Jan, andHelena H. Olsson. "Digital for real: A multicase study on the digital transformation of companies in the embedded systems domain.” Journal of Software: Evolution and Process 33, no. 5 (2021): e2333.
- 16. Stairway to Heaven:Speed R&D teams R&D teams V&V R&D teams V&V Release Cust. Sup. R&D teams V&V Release Cust. sup. Prod. mgmt. Sales & mrkt
- 17. • Vem ärjag? Wie ben ik? Who am I? • Digitalization • Superset platforms • Three layer product model • Systems engineering • Conclusion Overview
- 18. • Traditional: sharecommodity functionality between products • Current: support DevOps for a portfolio of products • Upcoming: provide common API for rapid prototyping, 3rd party developers, partners and customers (your business ecosystem) Why Platforms?
- 19. Typical Architectural EvolutionPath independent products standardized infrastructure platform software product line superset platform ecosystem
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- 21. DevOps continuous deployment of new software data A/Btest, performance, user, AI … processing, analytics, labeling, …
- 22. • Traditional: sharecommodity functionality between products • Current: support DevOps for a portfolio of products • Upcoming: provide common API for rapid prototyping, 3rd party developers, partners and customers (your business ecosystem) Why Platforms?
- 23. Economic community supportedby a foundation of interacting organizations and individuals, which can also be perceived as organisms of the business world (Moore, 1993). 1. Symbiotic relationship 2. Co-evolution 3. Platform: tools, services and technology used in ecosystem to enhance performance Business Ecosystem
- 24. • Keystone: centralfirm (e.g., Apple) • Complementor: provide product/service complementing ecosystem product/platform and enhances value (e.g., suppliers, developers) • Integrator: brings together parts provided by ecosystem players into an integrated solution for end-user • Customer or end-user Roles in ecosystems
- 25. Two fundamental strategies •Collaborative – cooperation in communities e.g., android platform (Google), Wikipedia • Competitive – market driven e.g., Apple app-store, Gore- Tex Ecosystem Strategies
- 26. Boudreau & Lakhani(2009)
- 27. • Here’s atry: A business ecosystem consists of a platform, a set of internal and external developers and a community of domain experts in service to a community of users that compose relevant solution elements to satisfy their needs. • Some more detail: Platform: A hierarchical set of shared components providing functionality that is required and common for the developers constructing solutions on top of the platform. Evolution: Over time, the functionality in the ecosystem commoditizes and flows from unique solutions to the platform. Developers: Although internal and external developers use the platform differently, the platform often allows developers to build on top of each other’s results. Composition: Users are able to compose their own solutions by selecting various elements into a configuration that suits their needs optimally. Software Ecosystems
- 28. Model of IndustryStructures Open Ecosystem Fully Integrated Firms 1 2 3 4 Supply Chains Suppliers and Integrators Closed Ecosystem 5 Open Ecosystem Fully Integrated Firms 1 2 3 4 Supply Chains Suppliers and Integrators Closed Ecosystem 5
- 29. Characteristics Fully integrated firm Suppliersand integrator Supply chains Closed ecosystem Open ecosystem Product architecture Firm Integrator Shared control Keystone partner & key partners Open industry standards Customer contact Direct, sole contact Integrator only Last firm in chain Keystone partner All ecosystem participants Platform architecture N/A N/A Dominant player Keystone partner Open industry standard Functionality All done in- house Selected parts sourced Each party owns their own parts Everyone, based on platform architecture All ecosystem participants Industry Structures
- 30. Conflicting Forces Open Ecosystem Fully Integrated Firms Less developmentCosts Shorter Time-to-market (Time to money) More variability Constrained innovation 1 2 3 4 More control over the architecture More efficient use of computer resources Better control over process More control over requirements Better control over quality Supply Chains Suppliers and Integrators Integrators view: Closed Ecosystem 5 Open Ecosystem Fully Integrated Firms Less development Costs Shorter Time-to-market (Time to money) More variability Constrained innovation 1 2 3 4 More control over the architecture More efficient use of computer resources Better control over process More control over requirements Better control over quality Supply Chains Suppliers and Integrators Integrators view: Closed Ecosystem 5
- 31. • Vem ärjag? Wie ben ik? Who am I? • Digitalization • Superset platforms • Three layer product model • Systems engineering • Conclusion Overview
- 32. How do we knowthat we’re actually delivering value customers care about?
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- 34.
- 35. Bosch, J. (2013).Achieving Simplicity with the Three-Layer Product Model, IEEE Computer, Vol. 46 (11), pp. 34-39. Three Layer Product Model
- 36. What % ofR&D for Commodity?
- 37. Innovation ecosystem • Who:Customers, 3rd party developers, suppliers • What: Development of new functionality • Why: Share/minimize innovation costs/risks • When: High market uncertainty • How: Open innovation, co-opetition, partnerships • Mechanisms: Product platforming, idea competitions, customer involvement, collaborative design, innovation networks etc. Differentiating ecosystem • Who: Keystone player • What: Optimization and extension of existing functionality • Why: Turn innovations into core product offerings, keep internal control over value-adding functionality, optimize for maximum customer value • When: When innovative functionality have proven valuable for customers • How: Innovation transfer, R&D management, monetizing strategies • Mechanisms: Data-driven development, patents, contracts, licenses etc. Commoditizing ecosystem • Who: Suppliers, competitors, developers • What: Reduce efforts related to old, non value-adding functionality • Why: Share/minimize maintenance costs • When: Functionality that has become so integral to the product that it no longer offers customer value • How: OSS, COTS, inner source, standardization, shared supplier • Mechanisms: Open platforms and API’s, connecting services etc. • Collaborative • Internal/external • Exploratory • Risk prone • Less control-driven • Competitive • Internal • Efficient • Risk averse • Control-driven • Collaborative • Internal/external • Cost-efficient • Riske averse • Less control- driven Ecosystem Drivers Ecosystem Type Ecosystem Characteristics External Internal External Internal Internal Functionality transfer Functionality transfer
- 38. Innovation ecosystem internal external collaborative •Me-Myself-I Strategy • Be-My-Friend Strategy • Copy-Cat Strategy • Cherry-Picking Strategy • Orchestration Strategy • Supplier Strategy • Preferred Partner Strategy • Aquisition Strategy • Customer Co-Creation Strategy • Supplier Co-Creation Strategy • Peer Co-Creation Strategy • Expert Co-Creation Strategy Differentiating ecosystem internal external collaborative • Increase Control Strategy • Incremental Change Strategy • Radical Change Strategy Commoditizing ecosystem internal external collaborative • COTS Adoption Strategy • OSS Integration Strategy • Outsourcing • OSS Creation Strategy • Partnership Strategy • OEM partnerships • Rationalized in-sourcing • Push-Out Strategy • Complementing Strategy • Platform Control Strategy TeLESM: Three Layer Ecosystem Strategy Model
- 39. • Vem ärjag? Wie ben ik? Who am I? • Digitalization • Superset platforms • Three layer product model • Systems engineering • Conclusion Overview
- 40. 1. Build itin software unless you really, really can’t 2. Build it in hardware and keep it flexible (FPGAs instead of ASICS) unless you really, really can’t 3. Build it in mechanics if you HAVE to and keep it modular, easily replaceable and simple Systems Engineering 2.0
- 41. From: • Systems builtto last • Opinions-based decision making (experience) • Deeply integrated architectures • Hierarchical organizational model • Satisfying the requirements • Static certification To: • Systems built to evolve • Data-driven decision making • Modularized architectures • Ecosystem of partners • Constant experimentation and innovation • Dynamic, continuous certification Systems Engineering 2.0
- 42. • Vem ärjag? Wie ben ik? Who am I? • Digitalization • Superset platforms • Three layer product model • Systems engineering • Conclusion Overview
- 43. • Digitalization drivesthe adoption of Ops, i.e. DevOps, DataOps, MLOps, putting unique, new challenges on software platforms • Superset software platforms are the only cost effective solution for DevOps • Superset platforms affect the way we conduct systems engineering Conclusion
- 44.
- 45. www.janbosch.com jan@janbosch.com Follow me onLinkedIn, Twitter (@JanBosch) or www.janbosch.com/blog