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Companies often ask how to build their partner ecosystem. This presentation explains the concept of software ecosystems and gives answers to very pragmatic questions. - PowerPoint PPT Presentation
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Copyright © 2015 Dr. Karl Popp (1)
LEVERAGING SOFTWARE ECOSYSTEMS – PRAGMATICS OF SUCCESS
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
Copyright © 2015 Dr. Karl Popp (3)
Magic of ecosystems
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.
Copyright © 2015 Dr. Karl Popp (5)
INTRODUCTION SOFTWARE ECOSYSTEMS
Copyright © 2015 Dr. Karl Popp (6)
Software Ecosystem
Products,Assets orServices Payments
StandardsBodies
CustomersSoftware vendor
SoftwarePartners
System Integrators
Compe-titors
Open Source Commu-
nity
Suppliers
Acqui-sition
Targets
Copyright © 2015 Dr. Karl Popp (7)
Sell
Software
Exchange of products, services,payments
CustomerSupplier
Partner
Products,Assets orServices
Payments
ProvideSoftware
Sell Software
Endo
rse
Soft
war
e
Ref
erra
l Fee
System Integra-
tors
Educate
Consul-
tants Serv
ices
fees
Serv
ices
Revenue
Software vendor
Revenue License Fee
Copyright © 2015 Dr. Karl Popp (8)
Types of ecosystems
SupplierEcosystem
CustomerEcosystem
Partner Ecosystem
System Integra-
tors
StandardsBodies
Customers
Partners
Compe-titors
Acquisi-tion
Targets
Suppliers
Open Source Commu-
nity
Copyright © 2015 Dr. Karl Popp (9)
GOALS FOR SOFTWARE ECOSYSTEMS
Copyright © 2015 Dr. Karl Popp (10)
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
Copyright © 2015 Dr. Karl Popp (11)
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.
Copyright © 2015 Dr. Karl Popp (12)
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.
Copyright © 2015 Dr. Karl Popp (13)
PRAGMATICS SOFTWARE ECOSYSTEMS
Copyright © 2015 Dr. Karl Popp (14)
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
Copyright © 2015 Dr. Karl Popp (15)
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
Copyright © 2015 Dr. Karl Popp (16)
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.
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
Copyright © 2015 Dr. Karl Popp (18)
Background information
Business Models in the software industry
http://softwarebusinessmodels.net
Profit from Software EcosystemsISBN-13: 978-3842300514Business Models, partnership models and ecosystems in the software industryExamples from over 50 software companies
