Are Products And Services That Allow For The Development And Integration Of Complementary Goods.

Complementary Product

The Rising of Platform Ecosystems

Amrit Tiwana , in Platform Ecosystems, 2014

1.two.ane Elements of a software platform ecosystem

A platform-based ecosystem consists of two major elements—a platform and complementary apps—equally Figure i.one illustrates. A software platform is a software-based product or service that serves every bit a foundation on which outside parties can build complementary products or services. A software platform is therefore an extensible software-based system that provides the core functionality shared by "apps" that interoperate with information technology, and the interfaces through which they interoperate ( Baldwin and Woodard, 2009; Tiwana et al., 2010). We refer to the lead business firm primarily responsible for the platform as the platform owner, sometimes as well called the ecosystem's keystone house (Iansiti and Levien, 2004) or the economic catalyst (Evans and Schmalensee, 2007). Platform ownership can be shared by multiple firms and a platform demand not be proprietary or for-profit. An app refers to an add-on software subsystem or software service that connects to the platform to extend its functionality. Although such complementary subsystems are oftentimes also called add-ons, plug-ins, modules, and extensions, here we refer to such platform complements merely as apps and their developers equally app developers. Apps are complementary goods for platforms; platforms are functionally more desirable when at that place are a broad variety of complements available to them. (2 products are complements when one increases the attractiveness of the other; think of cookies and milk or a laptop and a Web browser.) For example, Internet streaming boxes are more than desirable when streaming content is widely bachelor; smartphones are more valuable when networks supporting them be; Amazon's Kindle is more valuable when publishers produce e-books. The platform therefore consists of the enabling core technologies and shared infrastructure that apps can leverage. Apps access and build on the functionality of the platform through a fix of interfaces that let them to communicate, interact, and interoperate with the platform. The metaphor that science fiction fans can relate to is that the platform is like the Starship Enterprise and apps are like the lilliputian shuttlecrafts that dock into its myriad ports. The drove of the platform and apps that interoperate with information technology represents the platform's ecosystem. A platform ecosystem therefore meets the criteria for defining a complex system; one comprised of numerous interacting subsystems (Simon, 1962). Table 1.1 summarizes these cadre elements of a platform ecosystem.

Table 1.one. Core Elements of a Platform Ecosystem

Chemical element	Definition	Example
Platform	The extensible codebase of a software-based system that provides core functionality shared past apps that interoperate with it, and the interfaces through which they interoperate	iOS, Android Dropbox, Twitter AWS Firefox, Chrome
App	An add-on software subsystem or service that connects to the platform to add functionality to it. As well referred to as a module, extension, plug-in, or add-on	Apps Apps Apps Extensions
Ecosystem	The collection of the platform and the apps specific to it
Interfaces	Specifications that describe how the platform and apps interact and commutation information	APIs Protocols
Compages	A conceptual blueprint that describes how the ecosystem is partitioned into a relatively stable platform and a complementary fix of apps that are encouraged to vary, and the pattern rules binding on both	–

Outside of these central elements of a platform ecosystem are iii other contextual features: end-users, rival platform ecosystems, and the competitive surround in which they exist. End-users are the collection of existing and prospective adopters of the platform. The characteristics and diversity of this market evolves over fourth dimension and equally industries converge and split. A platform ecosystem exists within a larger competitive surround, often competing with other rival platform ecosystems. Such rival platform ecosystems constantly compete for both users and app developers. For example, Apple tree'south iOS competes with Google's Android, Blackberry, Nokia's Symbian, and Microsoft's mobile platforms. The competition within this environment is rarely directly among the platforms themselves merely rather among competing ecosystems. The more intense this competition, the more important a platform'due south evolution becomes for surviving and thriving. A vibrant and dynamic ecosystem is therefore key to the survival of any software platform, and increasingly of products and services every bit they morph into platforms or become subservient complements of some other platform.

An ecosystem can also be divided into its upstream and downstream parts of a value concatenation, as illustrated in Figure ane.2. The upstream part of the value chain is what goes into producing the platform itself (component and hardware suppliers, software licensors, manufacturing partners, network connectivity providers). The downstream part of the value concatenation includes platform complement producers (primarily app developers and complementary service providers), terminate-users who adopt information technology, and other intermediaries between the platform owner and end-users such as retailers and carriers (Adner and Kapoor, 2010). Apps are therefore downstream complements to a platform. Tabular array 1.2 provides examples of various contemporary platform ecosystems and their downstream complements. Downstream complements are bundled by a platform'due south end-users to customize the platform to their unique needs (Adner and Kapoor, 2010). Other downstream complements are necessary but bereft to sustain differentiation of a platform vis-à-vis rival platforms. The platform itself therefore serves every bit only one part of the larger arranged system from which the platform'due south end-users derive value. The bewitchery of a platform to stop-users comes non from the platform itself just from what they can do with it. The fate and survival of a platform then critically hinges on the variety and vibrancy of its downstream ecosystem. The evolutionary battles of platform dominance and survival are fought primarily downstream, where formidable competitive barriers for rival platforms tin can be created. That does not mean that the upstream is unimportant; it just does not differentiate platforms in their evolutionary trajectory to the same degree every bit long as they manage the upstream task of executing the platform assembly process comparably efficiently. Our focus in this book is therefore exclusively on the downstream role of the platform value chain.

Table 1.2. Examples of Software Platforms

Industry	Platform	"Apps"
Mobile computing	Blackberry OS	Apps
	Apple'southward iOS
	Google's Android
	Palm Os/HP TouchOS (defunct)
Browser	Firefox	Extensions
Browser	Google Chrome	Add together-ins, Spider web apps
Social networks	Dropbox	Apps
	Twitter
	Facebook
Publishing	Amazon'southward Kindle	east-Books
Publishing	iTunes	Music
Specialized software tools	R (statistical analysis platform)	Modules
Operating systems	Ubuntu Linux	Applications
Search engines	Users	Advertisers
Video games	Gamers	Game developers

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Initiate a New Stage in the Electronics Industry's Services for the Iv Modernizations*

Jiang Zemin , in On the Development of Red china's Data Engineering science Manufacture, 2010

B Focus on Priorities, Concentrate Investment in Certain Areas, and Raise Funds in Diverse Ways and Through Multiple Channels

During the Seventh Five-Year Programme period, authorities investment in upper-case letter construction in the electronics manufacture will be limited, only there are many problems to solve. Therefore, we must focus on priorities and strive for counterbalanced development. We will make integrated circuits, computers, communications equipment and software our priorities, and concentrate on making breakthroughs in sure appropriate new technologies in these fields while developing related complementary products such as electronic materials, technical equipment, measuring instruments, components, and devices. In order to achieve comprehensive and counterbalanced development, we volition requite a leading position to electronic capital appurtenances, and advance their evolution, while standing to significantly increase production of consumer electronics. We need to concentrate our funds on certain areas and keep the focus of investment on the technological upgrading of onetime enterprises. In principle nosotros will not launch new projects. We need to rid ourselves of the mentality of depending on the government for help and implant the mentality of developing production by relying on reform, government policy, and science and technology. Nosotros will raise funds through multiple channels and in diverse ways such as joint evolution, investment, and production with terminate-users in other industries. Nosotros volition as well actively develop Sino-foreign cooperation and concenter foreign capital.

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Platform Governance

Amrit Tiwana , in Platform Ecosystems, 2014

6.iii.3.1 Adjustment the pricing symmetry decision

The first criterion in deciding whether to price the two sides asymmetrically is the platform's business model. If a platform is two-sided from the beginning, getting both sides on board is critical to getting it off the ground. Recall that about successful multisided platforms started out as one-sided services that added a second side but subsequently a critical mass of adopters was on lath on the first side. For example, Dropbox, the pop file-sharing service, added app developers (the second side) only after it had a large terminate-user base (the first side; initially the but side).

In two-sided platforms, one side is oftentimes the loss leader and the other side is the turn a profit center. Money lost on the money-losing side is usually made upward on the money-making side. Just in rare cases do platforms brand money on both sides; this is often when it starts off as a dominant early mover that started out every bit a successful product (e.g., iPhone) or service (e.g., Dropbox and YouTube) with a lot of adopters. Platform pricing therefore oftentimes must be asymmetric such that either the app developers or the end-users are the side that pays a lot less than the other side.

A second consideration is whether the platform's business model depends on cross-side network effects for its success. If then, asymmetric pricing can accelerate the creation of cross-side network effects in the early stages of its lifecycle; if plenty subsidy-side users are attracted to a platform, the money-side users volition pay a premium to reach them (Eisenmann et al., 2006). An instance of this is Amazon's Kindle platform. Amazon subsidized end-users (by selling devices based on the platform at a loss) to create a large potential reader base. This attracted major volume publishers to the Kindle platform, jumpstarting cross-side network effects. The initial subsidies tin can then exist reduced, possibly fifty-fifty eliminated. This approach, withal, tin autumn flat if there are no early-mover advantages in the platform'due south market place.

Being a first mover to sell in a product or service category does not necessarily guarantee success. A beginning mover tin can be riddled by an underdeveloped or immature pipeline of adopters on the subsidized side and unclear market requirements, which can make being an early on follower a more than bonny proposition for entering a potential platform market. The power to create switching costs ⁵ among the subsidized-side adopters, exploiting scale and increasing returns advantages and maybe network effects is necessary for outset-mover reward to be plausible. Dropbox is an example of a platform that inspired many copycats attempting to replicate its offer. Such copycats who enter the market subsequently the product or service has begun to penetrate the mass market place are known every bit late entrants. They were able to replicate Dropbox's offering but were unable to overcome the stiff same-side network furnishings that Dropbox had used to create a showtime-mover advantage.

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Antitrust Policy

D.Fifty. Rubinfeld , in International Encyclopedia of the Social & Behavioral Sciences, 2001

iv High Applied science and Dynamic Network Industries

In the latter function of the twentieth century rapid changes in technology have altered the nature of competition in many markets in means that would well-nigh likely take surprised the antitrust reformers of the late nineteenth century. The early on debates centered on scale—did the benefits of economies of scale in product outweigh the associated increase in marketplace power? In many dynamic high technology industries today, demand, rather than supply is ofttimes the source of substantial consumer benefits and significant marketplace power. Economies of scale on the demand side arise in industries such as computers and telecommunications because of the presence of network furnishings, whereby each private's need for a production is positively related to the usage of the product (and complementary products) by other individuals. Network effects apply to communications networks (where consumers value a large network of users with whom to communicate, such as compatible telephone systems and uniform fax machines), and they utilize to virtual networks or hardware–software networks (where at that place is non necessarily whatever advice betwixt users).

In industries in which network effects are meaning, a host of issues challenge our traditional views of antitrust. Considering network industries are oft characterized by large sunk costs and very low marginal costs, at that place is a substantial likelihood that a successful firm will come to dominate a market and to persist in that dominance for a pregnant menses of fourth dimension. Indeed, while at that place is no assurance that a single standard will arise in network industries, it is nevertheless ofttimes the case that users will gravitate toward using uniform products. This combination of economic factors makes it possible for firms to prefer toll and nonprice policies that exclude contest and effectively raise prices significantly above what they would be were there more competition in the market (Rubinfeld 1998).

A host of hotly debated antitrust policy issues are raised by the increasing importance of dynamic network industries. Any view one holds, there is footling doubt that the antitrust enforcement stakes are raised. On one hand, because the path of innovation today volition significantly bear upon future product quality and toll, the potential benefits of enforcement are huge. This perspective clearly motivated the Department of Justice and twenty states when they chose to sue Microsoft for a variety of antitrust violations in 1998 (Us vs. Microsoft 1998). On the other mitt, because the path of innovation is highly uncertain and technology is quickly changing, barriers to entry that seem great today could disappear tomorrow, and the potential costs of enforcement are large as well. The threat of potential entry past innovative firms has been a significant part of Microsoft'south defense in the Department of Justice case.

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Conceptual Econometrics Using R

Sebastián Cano-Berlanga , ... Cori Vilella , in Handbook of Statistics, 2019

3.1 The classic consumer theory

von Neumann and Morgenstern (1944) analyze how consumers make purchasing decisions. Specifically, they written report the backdrop of the individuals' preferences that are transferred into a utility function. This function measures the satisfaction or do good obtained by the consumer from a specific purchasing (i.e., a combination of goods' basket). Consequently, the purchase process is obtained through an optimization problem, where the consumer maximizes his utility function taking into account his budget constraint. Formally,

$\begin{array}{l} M a x & u (10_{1}, x_{2}, \dots, 10_{due north}) \\ due south . a . & \sum_{i = i}^{n} p_{i} \cdot x_{i} = m \end{array}$

The solution of this trouble leads united states of america to a demand function with a negative relationship between the quantity, x _i, and its cost, p _i. Information technology is noteworthy that the demand function plays a key-role in the literature, since its proper estimation allows united states of america to know (i) the individuals' reactions when prices alter, and, (ii) how the demand of a certain proficient reacts to its economic context. To illustrate the aforementioned comments, we present a synthetic linear demand part,

$\begin{array}{l} x_{i} = A_{i} (E) - β \cdot p_{i} \end{array}$

whose parameters have the post-obit estimation:

x _i: purchased quantity of skillful i.

A _i(E): relationship of x _i with the context. This magnitude explains the interaction between the demand of the analyzed good among a big list of factors, such that complementary products, substitute goods and income of the heir-apparent.

β: individuals' reaction to changes in the price. The higher the β, the more sensitive the consumer is to changes in prices.

In this regard, quantitative enquiry of demand functions has provided different developments on how individuals take purchasing decisions in more complex contexts. For example, Berry et al. (1995) provide a sophisticated study about the demand in automobile sector. Withal, demand models are extremely complicated to guess: they require a big amount of information, meaning computational power and a precise econometric estimation that guarantees a proper statistical behavior. Though quantitative estimation of need part is such a difficult job, its econometric specification sheds additional calorie-free regarding the purchasing procedure. Therefore, from an empirical perspective, a need function takes the following expression,

$\begin{array}{l} x_{i} = A_{i} (East) - β \cdot p_{i} + ɛ_{i}, \end{array}$

where the mistake ɛ _i is introduced to our simple linear demand. The error plays a fundamental role on the consumers' purchasing machinery, as information technology provides a random component in the original model. On the one manus, the new term measures the consumers' response to news and different stimulations related to a nondeterministic way of the purchasing dynamics of x _i. On the other hand, the qualitative bear on of ɛ _i is extraordinary, since it explains how exogenous phenomena might change the purchasing decision. Indeed, the better modeling of the error term has improved the understanding of some economics fields. For instance, Engle (1982) dramatically enhances the comprehension of Financial Markets thanks to his ARCH model, which is a refinement on how to model ɛ _i in stock returns time series (run across Bollerslev, 1987). ^b

In our context, ɛ _i has ii chief implications. First, it transforms the initial model to a more realistic approach, since information technology relaxes the stiff rationality hypothesis of the consumer theory. Second, ɛ _i tell us that applying the right amount of positive force per unit area, individuals may be exogenously influenced in order to increase the sales of a good (come across Scott, 1976, Tybout, 1978, Prabhu and Stewart, 2001, amongst others). Therefore, even if the demand function remains unknown a marketer can raise his success via publicity, i.east., advertisements.

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Network Economics

Jean Walrand , Pravin Varaiya , in High-Performance Communication Networks (Second Edition), 2000

ten.i DERIVED Need FOR NETWORK SERVICES

Advice networks, similar road networks, alter the absolute and relative toll of access to locations of activities that people value. Dissimilar physical locations that are reached past a road network, the locations reached by a communication network are hosts continued to the network. These hosts are virtual locations.

Physical and virtual locations provide the "infinite" for a variety of activities. Some physical locations are workplaces, others are shops or places that provide entertainment, and others are homes where people live. Virtual locations (Spider web sites, workplace hosts, email servers, etc.) provide information or the means to buy and sell appurtenances and services on-line.

When people embark on an action at a remote physical or virtual location, they incur a communication cost and a search price. These costs are subtracted from the value of the activity itself. If you purchase a book from a physical bookstore, the advice cost is the toll of transportation to i or more bookstores, and the search cost is the time and effort you spend in finding the book you want. If y'all go to work or to visit a friend, the communication price is the effort in traveling to your destination, and the search cost is negligible. If you access an on-line library catalog to enquiry some topic, the advice cost may be the price you pay for the advice services, and the search price is determined by how well the on-line search facility matches your need.

The sum of the communication and search costs is the transaction price associated with an activity such as going to work, shopping for a book, or Web browsing for some information. The transaction toll has a budgetary component, and a subjective component, which is a function of how the transaction is experienced. If the transaction uses network services, the experience depends on the time it takes to complete the transaction such as downloading a Web page. That time is determined past the speed of the service. Other dimensions of service quality (latency, jitter) also affect the experience. Economists suppose that an individual assigns a monetary value to this subjective chemical element of the transaction price. When we refer to the transaction cost faced past an individual, we mean the sum of the budgetary cost and this assigned value.

The subjective cost of the same transaction is different for dissimilar individuals and for the same individual at different times. For case, when individuals identify a high value on their time, they volition choose a more expensive, high-speed service because of the time they salvage.

Individuals may accept a option among physical and virtual locations, and among communication services of different qualities and price. They compare the full cost of the different alternatives and cull the ane with the least cost.

Consider the choice between physical and virtual locations. For some activities the transaction toll at a virtual location is much lower than at a physical location. So people are increasingly probable to visit virtual locations for those activities. This explains the growth of on-line commerce, specially for goods and services that are reasonably standard (purchasing airline tickets, books, or stocks).

The shift to on-line commerce is altering many businesses. Airline travel agents take seen their revenues decline precipitously. Soon there will be few of them left as travelers save money and time through on-line purchases. The growth of on-line trading in stocks because of its convenience and much lower transaction toll is reducing the incomes of brokers. On-line "aggregators" are attracting customers by providing information nearly price and quality of products from competing manufacturers. In 1998 i% of full retail trade in the United States was conducted on-line, and some estimate that this will increase to 6% by 2002. On-line sales among businesses will increment even faster judging by the examples of Cisco, Dell Calculator, and Boeing.

10.1.1 Information Appurtenances

The growth in on-line commerce is owing to the reduced transaction cost. Total cost reductions are fifty-fifty larger for on-line sales of data appurtenances. These appurtenances are themselves in digital form (due east.g., software packages and database access). This cost reduction will stimulate the production of many appurtenances such every bit CDs, videos, and books in digital form.

We signal to some distinguishing features of the market for information goods. The costs of producting, distributing, and consuming information goods difer from those of other goods and services. While it can be costly to design and produce the first (or principal) item, the toll to produce additional items or distribute them on-line is negligible.

The consumer of an information good incurs, in addition to the cost of the good itself, the training and authoritative toll of "absorbing" the good. For case, the price of using a new software package–i that is unlike from the i yous are currently using–can be high and serve as a deterrent from acquiring the new bundle. In some cases, the price of switching to a new packet is high because information technology requires others to switch as well, as is the example with document packages.

The high initial cost, the low marginal toll of product and distribution, and the high assimilation toll affect the nature of the competition in the markets for information goods and the strategies that producers and consumers of those goods are likely to follow. We note some of these impacts.

Because the marginal cost of production is low, toll contest can lead to pricing below the average price. This benefits consumers only it can ruin producers. In this situation, a producer may engage in price competition to build up market share. Once an adequate share has been acquired, prices of the same or complementary products could be raised without losing customers who would exist reluctant to switch to a competing product because of its absorption toll. The incentive to increase market share explains why Web browsers are given away gratuitous. The aim is to sell complementary products such as servers.

Lastly, since the marginal cost of production is low, but consumers face up high absorption costs, producers will try price discrimination. They would similar to charge a high price to current customers and a low price to attract customers of competitive products. This price discrimination tin can take a variety of forms. Ane form is product differentiation. For example, the New York Times gives free on-line access to current articles, but you have to pay for archived fabric. Often an introductory version of a software production is given abroad free, just advanced versions are sold at a high toll.

10.1.ii Site Rents

The road network and the advice network alter the distribution of transaction costs over the geography of physical or virtual locations. Suppose location A is reached at a lower price than B. Then more people will visit A than B, and and then merchants at A volition generate higher sales than at B. As a result, rents at A will be college than at B. The deviation in the rents is chosen location or site hire. Landlords of commercial space endeavour to increase site rents by attracting more people to their location.

Site rents also accrue to owners of virtual locations such every bit Web sites. A common course of site rent is a charge for advertising at a Web site. This is also how TV, radio, and newspapers collect site rents. To attract visitors Web site owners subsidize diverse services (due east-mail, message boards, chat groups), merely as TV broadcasts are free and newspapers are sold below cost. Because they compete for the same viewers from the general public, Spider web sites imitate one another. Then there is a trend for Web sites to look alike, but as Telly programs, newspapers, and politicians during elections wait alike.

An alternative strategy to increase site rents is to specialize and target a narrow prepare of viewers. This occurs in physical locations likewise, and so restaurants tend to cluster together, equally do warehouses and investment banks. Similarly, some Web sites specialize in alluring viewers seeking fiscal information, others attract chemists, and others specialize in information about automobiles or real manor.

At that place as well are some interesting differences between the site rents at concrete and virtual locations. For example, since it is possible to determine if an item was purchased from a particular Web site, the site hire may take the course of a commission on the sales. This is not generally possible with newspaper or Telly advertising (although it is the case with on-line TV shopping channels). Some Web sites obtain demographic information nearly their viewers (normally in substitution for a free service like due east-mail). They can then target advertisement more selectively and charge a higher rent.

The attraction of 1 physical location relative to some other may be because the onetime is more easily attainable by route. The attraction then persists for a long time as the route network changes very slowly. Virtual locations, past contrast, are likely to exist equally accessible and it is easy to build competing locations, so their relative attraction will exist determined by how much they reduce the search cost component of transaction costs, how much they subsidize services that viewers desire, and how much brand loyalty they can create.

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Sense and Respond

Fred A. Cummins , in Building the Agile Enterprise (Second Edition), 2017

Virtual Enterprise Management

A virtual enterprise is an enterprise composed of multiple companies that work together for a shared purpose—a collaboration of companies. The companies involved in a virtual enterprise each expect to realize do good from the collaboration, otherwise the virtual enterprise will not survive. This is represented in a VDM model as a business network exchange of value propositions.

The decision to participate in a virtual enterprise will be the result of enterprise management strategic planning. Strategic planning will keep to focus on the virtual enterprise relationships and the role of the parent enterprise in this business concern system and the marketplace. See the discussion of strategic planning in the next section.

Industry Change

By and large, the purpose of the virtual enterprise is to create a stronger business organisation than the participants tin can achieve on their own. Germination of a virtual enterprise suggests a change to a business organization model that is not consistent with electric current manufacture relationships. Information technology volition have a significant industry bear on and will involve a greater investment, duration, and risk than a transformation that is independent and managed within the single enterprise.

While the industry modify may involve multiple companies, 1 company will exist the focus of the transformation as the visitor that will realize the major competitive reward among its competitors, and likewise the one that will have the greatest risks, making the industry transformation a main focus of that visitor's efforts for several years.

The participants volition work together for seamless integration of their products and services and potentially participate in joint sales or integrated client solutions. This will involve adoption or development of shared standards for seamless integration of complementary products and services as an aspect of the expected competitive advantage.

An manufacture change usually brings a new business model or at least a substantial alter in the nature of a production or service. A radical change has the potential to take reward of the cultural inertia of competitors because they are heavily invested and comfortable with business as usual.

Convergence of Factors

Generally, the change becomes viable because of the convergence of multiple factors—potentially multiple industries. Consider the introduction of iTunes by Apple. It was not just a new music download service, and it changed the recording industry—a new business model. There was already a transition to digital music, and inexpensive memory enabled collections of music to be stored on a small, portable device. Recording studios and artists were already losing to the distribution of pirated music. Apple gained the advantage of being first to provide the service to serve the market and develop relationships with members of the recording industry. A mass market was driven by depression prices and piece of cake access to a very big library of recordings that was more convenient (and legal) than access to pirated recordings.

The market place factors did non of a sudden change, they converged over fourth dimension: digital music, very small player devices with lots of retentiveness to hold many recordings, internet access to a library, recording companies and artists losing money to pirates, and an existing market of people enjoying their personal collections on portable devices. The strategy could have been adult much before. If it was introduced also before long, information technology might have failed. A key was to make the commitment and develop the details and relationships at the correct time.

For Apple, the disruptive effect occurred when there was a commitment to the strategy. For the industry, information technology occurred when iTunes was announced.

Of class, in that location was a lot more to the success of iTunes than commitment to a strategy. There was implementation of the service, synergy with mobile devices, the development of a profit formula, evolution of marketing strategy, the acquisition of content, and the commitment of value to the affected artists and enterprises.

Then what could a competitor do? Could they have beaten Apple tree to market with an culling service? Probably not. But they might accept predictable such a motility and congenital a complementary strategy. Apple inverse, non only the portable recording device manufacture, but the music industry as well.

So to create an industry alter requires (1) an agreement of the marketplace, including the behavior of the end customers, (2) agreement of the potential of the core engineering science, (3) relationships with key participants, and (4) having the adequacy and courage to deliver.

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Standardization revisited: A critical literature review on standards and innovation

Dong-Hee Shin , ... Junseok Hwang , in Estimator Standards & Interfaces, 2015

7 Standard-based competition and innovation

Standardization supports competition, either technology or market-based contest, and so as to achieve objectives such as the interoperability of complementary products and services or to provide agreed-upon test methods and requirements for wellness, safety, and organizational and environmental operation. Standards are one of the many tools that can be used to help foster interoperability amongst products or services within a market, and when they are responsive to existent marketplace needs they tin help promote innovation, fuel market growth, and protect investments in new technologies. Standards can apply to various fields. They can catalyze innovation by encouraging companies to contribute their innovative engineering science to standard-setting activities and share their intellectual properties with others. When adult and implemented through open and transparent processes, successful standards help create opportunities for product differentiation and promote more choices for users. Open source software (OSS), a representative activity of open innovation [34], is a skilful case. Although Google was backside in the mobile platform, information technology formed an alliance with many associated firms for using Android equally open source software [36]. Standing aslope Apple's iOS, as a consequence, Android is now one of the de facto standards in the mobile platform [31].

The standard-setting activity in plow enhances competition and innovation amidst vendors. While formal standards play an of import role, market-led customer-driven acceptance of engineering and cross-industry support for popular ICT specifications too plays a crucial role in contest and innovation. The resulting state of affairs is a dynamic coexistence of both formal standards and industry-developed specifications in the ICT marketplace. Together, these standards and specifications fuel innovation and economic development, while helping enable interoperability in ICT products and services to ultimately deliver better user experiences also equally provide ICT companies with a ways for unconventional strategies.

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Special Upshot on Patents, Standardization and Open Problems in ICT Practices

Kai Jakobs , in ICT Express, 2017

three.2 BluRay vs. Hd-DVD

This example resembles the above case in that the technologies involved are descendants of the VHS cassette, Sony was a main player in both cases, and both eventual losers initially seemed to have a competitive edge—in this case, born backward compatibility. However, other factors proved to exist decisive. Sony'due south apparently superior strategy included the provision of complementary products and, in item, the utilization of its engineering in another Sony product, the Playstation iii [14]. The final accident for Hard disk drive-DVD came "when Warner Brothers announced that it would cease its support for HD-DVD and would instead exclusively support Blu-ray", as, plainly "…Warner Brothers received marketing support from Sony as role of the agreement"[15]. Along similar lines,[xvi] cites a lack of sectional support by big studios (the users) every bit the major reason for the demise of HD-DVD.

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A business model for commercial open source software: A systematic literature review

Shahrokh Shahrivar , ... Gholamali Montazer , in Data and Software Technology, 2018

3.2.8 COSS cost-do good

With regard to the iv categories of tangible revenues, tangible costs, intangible benefits, and intangible costs nosotros added another component of COSS cost-do good to COSS business model.

Tangible revenues for COSS producers are obtained by: Customer pay for software based on the market attitude [i], inevitable payment of users for support [60], increase of offered service fees [1], profit increase [1], users learning costs [73], installation costs [73], maintenance costs [73], the possibility of more than back up costs of open up source software compared to proprietary software [73] , displaying more than software products equally a consequence of open sourcing and increasing the size of the market which will result in more sales of complementary products and more profits through lower maintenance and management costs of software code [61], the potential profitability of open up source software through venture capital investment in open source software [42].

The intangible benefits of COSS development include faster development [74], faster distribution [74], faster credence [one], free and fast user feedback [one], volunteer code contribution [1], recruitment of software developers in the early days of an open source projection [1], toll reduction of innovation past reusing existing technology [51], investors satisfaction and to get a successful open up source business if not the market leader [ane], the use of the closed source marketplace leader by open sourcing instead of non enjoying at all [1], getting help from other open source projects with suitable license [1], getting admission to more customers through the flexibility of pricing [1], individual keeping of tacit knowledge [51], learning in creating innovation process [51], positive image acquisition [51], boosting competition due to being open source [61], gaining experience in emerging open source markets [44], offering value to more customers through open up source vendors and consultants [44], acquisition of valuable skills in open source implementation for potential small and medium enterprises and nonprofit organizations equally potential employers [44], the straight price savings with open source [1], cheaper software development using open up source [one], the necessity and cost of integrating goods with services for customers [44].

The tangible costs for these companies include the salary of in-house developers and the cost of running the organisation [1]. Also, reducing the return of overall market capitalization if not the market leader, and reducing the utilization in the former closed source earth if marketplace leader [1].

Finally, concerning of the intangible costs in the principal studies, the followings are pointed out: the employment of software developers at the fourth dimension of project maturity [1]; lack of reception of open source software by corporate executives on account of unreliable or unsustainable support sources [75]; lack of reception of open source software by corporate executives on the grounds of lack of available resources, or the unnecessary demand for open source technology in the business, or intensive undertaking of migration toward open source software, or its long or steep learning curve [75], the entrada against open source with non-technical and irrational arguments as part of the strategy of sure Information technology companies to maintain their own market shares [49], use of third-party services for back up [60], indifference to paying the manufacturer or third parties [60], the company'southward being forced to assistance to promote public goods innovations through the reuse of open source software [51], ambiguity of the full price of the open source project for users [44], time-consuming and painstaking evolution of open up source software [sixty], the COSS business model may not be beneficial for all software production organizations [76]. See Fig. 13.

The higher up components are shown in Fig. 14 with respect to the component of value capture.

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