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How to make a successful software ecosystem (and why)
Michael Mace, January 8, 2009
mike@rubiconconsulting.com@ g
About Rubicon
• Help high tech organizations win markets through business and market strategyg gy– Since 1999– Practices: define, deliver, defend, optimize
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 2
The first electronic computer
• ENIAC, 1946
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 3
The first business software app
• Lyons LEO, 1951– Managed UK's biggest catering
companycompany• 30,000 employees, 150m meals a year• All managed on paper• Payroll inventory order management• Payroll, inventory, order management...
• Software bundled with hardware
– 5,000 square feet, 4k of memory weighing half a ton
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 4
David Caminer, the first business app programmer
The first third-party app
• Applied Data Research's Autoflow, 1965
– An automatic flowcharting program• Also the first patented software
– RCA first then IBM– RCA first, then IBM– IBM: free clone– US government antitrust suit, 1969
M i G j– January 1, 1970: IBM unbundles Martin Goetz, project manager, Autoflow
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 5
Rise of third party app platforms
• Minicomputers, 1970sApple• Apple
• IBM PCM i t h• Macintosh
• Windows
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 6
Distance from hardware increases
1940s 1950s 1960s 1970s 1980s 1990s 2000s
• Computers
• Software that lets computers do multiple tasks
• Independent software
• OS platforms separated from hardware
Pl f d• Platforms separated from OS
• Cloud as a l f
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 7
platform
The web discovers APIs
• Mashups
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 8
Mobile discovers APIsOne-year growth in
• Intense interest due to recent successes of a
25,000
registered developers
recent successes of a certain mobile device
15 000
20,000
10,000
15,000
0
5,000
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 9
0
Mobile discovers APIsOne-year growth in
• Intense interest due to recent successes of a
25,000
registered Palm developers
recent successes of a certain mobile device
15 000
20,000
10,000
15,000
0
5,000
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 10
01998 1999
"That's unfair"
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 11
Reality: Most platforms fail
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 12
Failure depends on your goal
– Give me a marketing boost over h i i
Developer motivation
Don't carethe competition
– Get developers to add features I
Don t care
C h tdon't have time to develop
– Address user problems and sub-
Care somewhat
dd ess use p ob e s a d submarkets that neither of us could have tackled alone
Care a lot
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 13
What motivates developers?
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 14
How platforms fail
Almost impossible to
Apps hard to findStore financials outrageous
monetizeg
Inconsistent APIs (raises cost)Very hard to get on device
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 15
The PC and Windows
• The RiseIBM drives belief in large user base– IBM drives belief in large user base
– Hardware architecture permits powerful apps (for the time)– Open APIsOpen APIs– Clone licensing drives additional growth; virtuous circle
• The Decline– Microsoft preys on successful software developers– Intel and Microsoft can't coordinate innovation
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 16
The less friction, the more apps
• Easy to developPowerful APIs great documentation and support uses– Powerful APIs, great documentation and support, uses existing tools/languages, easy to debug
• Easy to sellasy to se– No artificial barriers, easy discovery, marketing,
installation, billing, reasonable financials
• Large user base– Or the belief that it'll get large
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 17
Pluses and minuses of iPhone ecosystemecosystem
Strength WeaknessStrength Weakness
APIs Very capable App functionality limited
Development Familiar if you're a Mac d l
Nonstandard, Java and Flash i ideveloper missing
Store Built in, pretty good terms Arbitrary screening by Apple, price pressure
User base Perception of world domination, high traffic seen by websites
(Will it continue to grow?)
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 18
If you wanted to beat them...
• Reduce the revenue cut to 20%Eliminate prior review of apps• Eliminate prior review of apps
• Enable background processingE bl thi d t l tf• Enable third party platforms– Java, Flash, etc.
M f di t ti• Move from discovery to suggestions• Enable web apps
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 19
The ultimate ecosystem
• Advantages of an integrated platformGreat discovery billing support APIs– Great discovery, billing, support, APIs
• Advantages of web app development– Lots of Ajax-style tools instant deployment huge user– Lots of Ajax-style tools, instant deployment, huge user
base, write once run anywhere
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 20
Remember
• If you're a developer"Which platform gives me the best long term business– Which platform gives me the best long-term business proposition?"
– Strong bias toward Ajax-style developmenty
• If you're a platform vendor– "How can I create a better ecosystem than the other
guy?"– "Am I on the right side of the trend toward web apps?"
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 21
Discussion
• mike@rubiconconsulting.com
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 22
Win MarketsT d Ad i hi h h fi kiTrusted Advisors to high-tech firms seeking to transform their visions into strategies, strategies into plans, and plans into results.
Practices:
Define / Design / Defend / Optimize
Software ecosystems ©2009 Rubicon Consulting, Inc. | Proprietary & Confidential Page 23
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