NEWS

Karl Popp 2/23/21 Karl Popp 2/23/21

Software partnerships and business models: Certified solutions

The European Workshop on Software Ecosystems is an annual event which connects top notch researchers and business professionals in the field of software and platform ecosystems as well as business networks. Here is an example of a topic we will discuss at the event.

Customers are looking for minimizing their integration cost in a heterogeneous landscape of software solutions. To proof that the integration between two software solution exists and has some level of quality, software vendors are offering certification programs. Certification allows competition between software partners to keep prices low while certification increases integration quality.

The software vendor provides certification services for a certification fee and logo usage to software companies. Software companies sell their software to customers. No revenue share is paid to the software vendor.

Business Model Canvas for Certification

The value proposition contains the following values:

Reduced development cost and time for integrating solutions since the integration already works based on the certifiable interface.
Quality products are being integrated to avoid that customer value is destroyed by bad quality.
Partners that get certified on an interface create value for the company that offers the interface on their solutions because the solution scope is extended by the partner products.

More details and background information can be found in these books:

Karl Popp 2/22/21 Karl Popp 2/22/21

Open Source Business Models

Commercial use of open source

For a commercial company, Open Source Software is software that is licensed to that company under an open source license. The commercial company may make use of the open source, like usage or redistribution of the open source free of charge, but it also has to fulfill the obligations, like delivering a copy of the license text with the software.
So the rights and obligations have to be analyzed diligently to make sure there is no violation of the license terms.

Suppliers of open source software

Open Source software can be supplied by a community or by a commercial company. We speak of community open source and commercial open source respectively.
For community open source, a community of people provides creation, maintenance and support for an open source software. In most of the cases the community provides these services free of charge.
There are, of course, differences between a company and the open source community. These differences are important to understand, because they influence a customer´s supplier decision and they also create niches for companies to establish a business in that niche.

Commercial open source vs. community open source

So a customer might decide for commercial open source if he needs customized license terms, runs open source in a mission-critical environment and thus needs service level agreements in support or if he needs maintenance provided in a different way than via the open source community.
In many business contexts it makes also sense to have liability and warranty provisions from a supplier when using open source. In most of the existing open source licenses there is exclusion of any warranty or liability (3). This is another reason why companies might choose commercial open source over community open source.

Classification of open source business models

Based on a classification of business models (Weill et al.) we will have a look at open source business models.

Open source usually is free of charge, but that does not necessarily mean there is no compensation for using the open source component.
The next figure shows a classification of generic business models. The business models relevant for commercial open source business are marked in bold. In this general classification of business models, software classifies as an intangible product, see the corresponding column “Intangible”. Software can be created or written (“Inventor”), distributed (“IP Distributor”) or licensed or rented to customers (“IP Lessor”). In addition, the customer needs services to run and maintain the software, like implementation, support and maintenance services. These classify as “Contractor” business. We assume here that all open source businesses make use of at least a subset of these four business models.

No matter if it is a community or a commercial software vendor, one or many of these business models are applied. By choosing a specific selection of business models, a so-called hybrid business model is created. Creating a hybrid business model means combining different business models with their specific goals, requirements and cost structures.
Since these business models are models on a type level, there might be different implementations of how a certain business model is run. An open source community might run the Inventor business for creating software in a different way (leveraging the community) than a commercial software vendor (leveraging a development team), from a process as well as from a resource perspective. But on a type level, both run the same type of business called Inventor.
So going forward, we will analyze commercial and community open source business models as a selection of a subset of the business models identified here: Inventor, IP Lessor, IP distributor and Contractor.

Community open source business model

The open source community business model usually makes use of the following business models: Inventor, IP Lessor and Contractor.

For the community, the Inventor business is what the community is most involved in. It is about creating open source software and engaging with the community members to coordinate the work and collect the contributions of the community members.

The IP Lessor business is also important for the community. The IP lessor business defines the terms and conditions of the open source license and makes the software available to customers. The license is defined by the community and all customers using the software have to comply with it. In some cases, there are multiple different licenses for an open source software that a customer can choose from.

The Contractor business contains all human services to customers. The community typically provides these via email and they contain services like maintenance, support, translation for country specific versions and the like. They are all carried out by community members. In almost every case, the customer does not pay for these services, but the customer has no rights to enforce any of these services and he does not have service level agreements, like a definition of minimum answer time for support incidents.

The community can serve two types of customers: software vendors and (end) customers. For software vendors, the open source community works as a supplier of software, for the customer, the open source community works as a software vendor licensing software to the customer.
These two relationships differ in the way that customers and software vendors might make use of the software. Customers usually license the software for internal use only. Software vendors license software for internal use and/or for distribution to customers. Often open source software is included in commercial software and provided to customers by the software vendor. In this case, the software vendor has to make sure he complies with all licenses of all open source software he is including in his software product.

Commercial open source business models overview

In the last section we described the community business model, now we turn to the commercial open source business model. Figure 4 shows the typical business models implemented by commercial software vendors. As mentioned before, a commercial software vendor does not have to implement all of these business models, but can rather build a unique business model by selecting a subset of available business models. One basic difference to community open source is that the IP Distributor business model is an option for commercial companies.

The history of commercial open source companies shows that in the beginning the companies focused on services around open source software, which matches the Contractor business.

The next step was to build distributions for open source software, like e.g. for Linux. This matches to the IP Distributor business model.

Today, we find all kinds of hybrid business models around open source. Companies are building software and donate it, completely or partially to the open source community (Inventor business model). Commercial software vendors often package or change or extend existing community open source software, so the community acts as a supplier of open source software to the software vendor. In some cases the software vendor does not use existing open source software from a community, but chooses to offer its proprietary software under a dual licensing strategy, e.g. under a commercial and an open source license.

Commercial services for open source

Since open source licenses are free of charge, commercial companies first and foremost focused on providing services around open source software. The expectation was simply that customers would still need services and since the license was free, that customers would have more money to spend on services.

Commercial open source companies provide the following services for open source software: Maintenance, Support, Consulting and Extension or adaption of open source software to a customer´s needs.

Maintenance services consist of the following activities: building future versions, bug fixes and upgrades and providing them to the customers.

Support services contain of accepting, maintaining and resolving incidents that the customer has while using the software.

Consulting services mean planning and executing the installation and go-live of customers´ system landscapes containing the software.

Extension or adaption of open source software based on customer´s requests is designing, programming, testing and delivering open source software that has been modified or expanded. Examples for extensions and modifications are:

Functional Extensions for open source applications with country-specific functionality or customer specific functionality;
Extending the usage scenarios for open source to additional countries by adding additional translations of user interfaces;
Adapting open source software means to make open source software run on customers´ hardware and software platforms.

Summary and outlook

The evolution of open source and commercial open source business is still underway. In the future we will see additional varieties of open source business licenses, such as in open source hardware or designs, and new open source business models, like in open source on demand applications or open source software in cloud environments.

For best practices in open source use in commercial products see these books:

Karl Popp 2/14/21 Karl Popp 2/14/21

Managing the Dark Side of Software Ecosystems

Despite all the potential benefits for complementors, however, innovation in platform ecosystems also introduced essential new risks that remain under investigated.

The emergence of platforms is significantly changing the organizing logic of software

development. Platform owners are increasingly engaging vibrant ecosystems around

their platform to foster third-party innovation. Despite all the potential benefits for

complementors, however, innovation in platform ecosystems also introduced essential

new risks that remain under investigated.

Find more information here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3245777

Talk about it and discuss at EWSECO

Karl Popp 2/10/21 Karl Popp 2/10/21

Locations sponsor for European workshop on software ecosystems announced: Schwarz Group

For the eighth workshop we are looking forward to short presentations and long breaks which fuel discussions and networking between participants from all across the software industry and academia.

We proudly announce that Schwarz Group sponsors location, food and drinks for EWSECO 2021, April 29 2021 in Heilbronn.

The Schwarz Group, headquartered in Neckarsulm, Germany, owns the companies Lidl and Kaufland and is Germany's largest retail group with a group turnover of 90 billion euros. Its activities are divided into discount food markets under the name of Lidl and hypermarkets and hypermarkets such as Kaufland, KaufMarkt, Concord and Handelshof. Today, Lidl stores are located in almost all European countries. Lidl is currently represented in 26 countries, Kaufland in Germany and in six other countries.

Find more information here.

Karl Popp 2/8/21 Karl Popp 2/8/21

New sponsor for European workshop on software ecosystems announced: Kaufland

For the eighth workshop we are looking forward to short presentations and long breaks which fuel discussions and networking between participants from all across the software industry and academia.

We proudly announce that Kaufland sponsors the location for EWSECO 2021, April 29 2021 in Heilbronn.

Kaufland is an international retail company with about 1,300 branches in Germany, Poland, the Czech Republic, Romania, Slovakia, Bulgaria, Croatia and the Republic of Moldova. Currently, Kaufland is preparing to expand to Australia. In Germany, Kaufland operates about 670 stores and employs around 74,000 people. With an average of 30,000 articles, the company offers a large assortment of food and everything for daily needs. The focus lies on fresh fruit and vegetables, dairy products as well as meat, cheese and fish. The company is part of the Schwarz Group, one of the leading food retail companies in Germany and Europe.

Kaufland operates about 670 stores all over Germany and employs around 74,000 people. With an average of 30,000 articles, the company offers a large assortment of food and everything for daily needs. The focus lies on fresh fruit and vegetables, dairy products as well as meat, cheese and fish. The company is part of the Schwarz Group, one of the leading food retail companies in Germany. Kaufland is based in Neckarsulm, Baden-Wuerttemberg.

Find more information here.

Karl Popp 11/20/20 Karl Popp 11/20/20

New exciting book about platforms and complementors published

Leading edge research on platforms.

This publication examines how platforms affect companies that use multiple technology platforms. It gives actionable recommendations on how to accommodate the platforms' influence.

Content

The concept of platforms emerges in an increasing number of industries and affects customers' changing expectations, industries themselves, and new technologies' availability.
Today, most platforms act as a technical foundation and distribution channel for complementary software products. Organizations can join platforms and use them to develop and distribute software products. They become complementors on the platforms. Platforms influence the motivations as well as the organization and affects software products of the complementors.
Among other things, when using platforms, complementors must accept the platforms' specifications (for example, the technologies to be used). These requirements lead to additional work for complementors. The effort for complementors increases if software products are to be offered in parallel on multiple platforms. This publication examines how platforms affect organizations that use multiple platforms. It gives organizations recommendations for action on how to accommodate the platforms' influence.

About the author

Christopher Georg Jud studied Information Systems at the HTWG Konstanz (Bachelor of Science) and the Universities of Hohenheim and Stuttgart (Master of Science).
After graduating, he was an academic assistant at the Chair of General Business Administration and Information Systems II (Enterprise Software) of Prof. Dr. Georg Herzwurm at the University of Stuttgart. He currently works for a German hypermarket chain where he is responsible for the department "Business Technology and Agile Management".
The author is also a lecturer at the FOM University of Applied Sciences in Munich. His research and lectures focuses on software product management, digital business models, and agile transformation in software development. He received his doctorate as Dr.rer.pol. in 2020.

CLICK HERE TO ORDER

Karl Popp 2/21/20 Karl Popp 2/21/20

Next sponsor for European workshop on software ecosystems announced: Corum Group

For the eighth workshop we are looking forward to short presentations and long breaks which fuel discussions and networking between participants from all across the software industry and academia.

We proudly announce that Corum Group sponsors EWSECO 2021, April 29 2021 in Heilbronn.

Corum serves as an intermediary for software companies seeking to be acquired and/or recapitalized, whether by a strategic acquirer, private equity firm or other partner.

The Corum Group has been working exclusively in the software technology space for over 30 years and has established relationships with all major strategic and financial buyers of software conmpanies. We have negotiated deals with many of them, and even more importantly, our educational Tech M&A events provide us a unique opportunity to build relationships outside the crucible of the deal, with buyers participating as attendees, speakers and sponsors. All of the information we gather from our interactions with buyers is centralized and utilized through the most robust database of software companies and acquirers in the world.

Additionally, as non-tech companies become more and more active in the technology space, Corum's global, dedicated research team is always working to identify and connect with the unexpected and unusual buyers that make up a suprising share of the acquirers of technology companies today.

Find more information about EWSECO click here.

Karl Popp 3/18/19 Karl Popp 3/18/19

Proceedings of the European workshop on software ecosystems, held as part of the Platform economy summit, are available

Dear all,

the European workshop on software ecosystems, this year held at the Platform Economy Summit in Berlin, was a huge success.

All the results are in the proceedings, so if you have not been participating, you can get a summary of the discussions in the workshop!

The proceedings are available in print and ebook with the ISBN 9783748140153

at amazon

at BOD, our publisher.

DETAILS

The workshop was held within two sessions of the second day of the First European Platform Economy Summit in Berlin. The first session was a workshop called “New Ecosystem Opportunities & 'White space' Opportunities in Software and High-Tech“ and the second session was a panel about “Network Effects, Data Effects & AI - Keys to the castle“ moderated by Slinger Jansen. You can find more details on both sessions below.
Session one: New Ecosystem Opportunities & 'White space' Opportunities in Software and High-Tech

This design-thinking based workshop featured three short motivating presentations by Peter Buxmann, Sebastien Dupre and Thomas Curran followed by topic-based, hands-on workshops.

Thomas captured the audience by describing his recent success with creating new cloud based ecosystems for digital business in the financial industry. In a traditionally closed industry, what do you do to turn a company into a digital, open platform? Thomas had done just that in a three year project and talked about how to do that successfully.

Peter reported about several studies on the value of data and the importance of privacy. He provided insights into challenges and success factors for software platform providers regarding the value of customer data, customer privacy and tradeoffs between data privacy and data farming by platform providers.

Sebastien showed how Uberization in field service management works by engaging a crowd of service technicians inside and outside of companies. He explained how companies can build an ecosystem connecting field service technicians, partners, own employees and customers to scale their field service operations, increase revenue and provide unmatched customer experience.

All presentations are in the proceedings. The proceedings are available in print and ebook with the ISBN 9783748140153, at amazon, and at BOD, our publisher.

Then we split the crowd of thirty people into three teams that worked together and discussed with the help of the moderators and our design thinking coach Olaf Mackert. First, we ran an introduction game called two truths and one lie, which created a lot of laughter and made everybody ready to work together trustfully.

Then everybody dumped his ideas, questions, issues he or she wanted to discuss on post-its, which were clustered into topics by the moderator. Then the teams voted on the topic to start with. The discussions went on in five minute slots. The team voted on either continuing the discussions on the topic or going to the next topic after each slot.

Thomas Curran´s team, which was the largest team, focused on the technical aspects of creating a platform and technology selection. They had lively and productive discussions leveraging the joint wisdom of the team.

Sebastien´s team of ten discussed topics around uberization of any industry and about changes in strategies for field service management.

Peter Buxmann´s team was a diverse team made up of members from venture capital, manufacturing, public administration which made discussions very interesting based on the different views. The team addressed question around motivations of people to share data, ways to create value from data and also around data protection impact on data-driven business models.

The results of each team are listed in the proceedings. The proceedings are available in print and ebook with the ISBN 9783748140153, at amazon, and at BOD, our publisher.

Session TWO: Network Effects, Data Effects & AI - Keys to the castle

John Rethans, head of Digital Transformation Strategy from Apigee/Google, brought everybody on the same page regarding APIs - what they are and what it means to implement an API driven strategy and technology.

Slinger Jansen from Utrecht University opened the panel with a short presentation about his research. The panel´s focus was on pragmatic aspects of creating successful API platforms. It covered questions like “What is the role of APIs for platforms? How do you build API-based platforms? What are the success factors and pitfalls when building API-based platforms? How to explain their power to non-technical executives and shareholders?”

In addition to Slinger and John, the panel featured the following speakers: Nik Willetts - President & CEO, TM Forum, Andreas von Oettingen - MD of Factor10.

The presentations are in the proceedings. The proceedings are available in print and ebook with the ISBN 9783748140153, at amazon, and at BOD, our publisher.

best regards

Karl

Karl Popp 3/15/19 Karl Popp 3/15/19

2018 proceedings are available

Dear all,

the European workshop on software ecosystems, this year held at the Platform Economy Summit in Berlin, was a huge success.

All the results are in the proceedings, so if you have not been participating, you can get a summary of the discussions in the workshop!

The proceedings are available in print and ebook with the ISBN 9783748140153

at amazon

at BOD, our publisher.

DETAILS

This design-thinking based workshop featured three short motivating presentations by Peter Buxmann, Sebastien Dupre and Thomas Curran followed by topic-based, hands-on workshops.

All presentations are in the proceedings. The proceedings are available in print and ebook with the ISBN 9783748140153, at amazon, and at BOD, our publisher.

Sebastien´s team of ten discussed topics around uberization of any industry and about changes in strategies for field service management.

The results of each team are listed in the proceedings. The proceedings are available in print and ebook with the ISBN 9783748140153, at amazon, and at BOD, our publisher.

Session TWO: Network Effects, Data Effects & AI - Keys to the castle

In addition to Slinger and John, the panel featured the following speakers: Nik Willetts - President & CEO, TM Forum, Andreas von Oettingen - MD of Factor10.

The presentations are in the proceedings. The proceedings are available in print and ebook with the ISBN 9783748140153, at amazon, and at BOD, our publisher.

best regards

Karl

Karl Popp 3/4/19 Karl Popp 3/4/19

2018 proceedings available soon

Dear all,

all the results are in, the proofreading and design are completed, just waiting for the cover design and we are ready to go.

The proceedings will be available in print and ebook with the ISBN 9783748140153

best regards

Karl