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Abstract. tomers.like: that streams, this papervidebusinessthree
Keywordsbusiness models,
1 Definition of terms
To talk about business models and revenue models, these terms have to be defined. classification of business modelsware vendor.types. The (real, physical products, durable and nonintellectual property, knowledge and brand image) and
Fig. 1: Types of goods and services
2 Business Model Archetypes
Business analyzing one thousand companies in different industrieslessor and broker.
Hybrid
Abstract. Software companies create revenue from selling software licenses and services to cutomers. This paper tries to model revenue streams of software companies and addresses queslike: What do revenue that of other companies? streams, this papervides some answers to the questions by using a semibusiness models and revenuethree companies in the
Keywords. Business model, Software business models, business models,
Definition of terms
To talk about business models and revenue models, these terms have to be defined. classification of business modelsware vendor. Two dimensions are being used: types of goods and services and business model arch
The types of goods and services(real, physical products, durable and nonintellectual property, knowledge and brand image) and
Types of goods and services
Business Model Archetypes
Business model archetypes analyzing one thousand companies in different industrieslessor and broker.
Hybrid revenue relationship to
Karl Michael Popp
Software companies create revenue from selling software licenses and services to cuThis paper tries to model revenue streams of software companies and addresses ques
revenue models consist of and how do companies differentiate their of other companies? After
streams, this paper shows the relationship answers to the questions by using a semi
and revenue modelscompanies in the software industry.
Business model, Software business models, business models, Business model generation
Definition of terms
To talk about business models and revenue models, these terms have to be defined. classification of business models from
Two dimensions are being used: types of goods and services and business model archtypes of goods and services
(real, physical products, durable and nonintellectual property, knowledge and brand image) and
Types of goods and services [2]
Business Model Archetypes
model archetypes are basic pattanalyzing one thousand companies in different industries
models of software companiesrelationship to hybrid
Karl Michael Popp, Corporate Development ([email protected]
Software companies create revenue from selling software licenses and services to cuThis paper tries to model revenue streams of software companies and addresses ques
models consist of and how do companies differentiate their After structuring revenue models
relationship between revenuanswers to the questions by using a semi
models on a type levelsoftware industry.
Business model, Software business models, model generation
To talk about business models and revenue models, these terms have to be defined. from Weill [1],
Two dimensions are being used: types of goods and services and business model archtypes of goods and services are: financial goods
(real, physical products, durable and non-durable goods), intellectual property, knowledge and brand image) and
Business Model Archetypes
are basic patterns of doing businessanalyzing one thousand companies in different industries
of software companieshybrid business models
Corporate [email protected]
Software companies create revenue from selling software licenses and services to cuThis paper tries to model revenue streams of software companies and addresses ques
models consist of and how do companies differentiate their revenue models
between revenue models and answers to the questions by using a semi-formal approach to
on a type level. It illustrates the findings with examples from
Business model, Software business models, Business
To talk about business models and revenue models, these terms have to be defined. , we are able to classify the business model of a sof
Two dimensions are being used: types of goods and services and business model archfinancial goods
durable goods), intangible goodsintellectual property, knowledge and brand image) and human
erns of doing businessanalyzing one thousand companies in different industries. Available archetypes are creator, distributor,
of software companiesbusiness models
Corporate Development, SAP [email protected])
Software companies create revenue from selling software licenses and services to cuThis paper tries to model revenue streams of software companies and addresses ques
models consist of and how do companies differentiate their and describing attributes of revenue
e models and business modelsformal approach to classifying and
. It illustrates the findings with examples from
Business model classification
To talk about business models and revenue models, these terms have to be defined. able to classify the business model of a sof
Two dimensions are being used: types of goods and services and business model archfinancial goods (cash and other assets),
intangible goodshuman services (people´s time and effort).
erns of doing business [1]. They were derived from a study Available archetypes are creator, distributor,
of software companies and their business models
SAP AG
Software companies create revenue from selling software licenses and services to cuThis paper tries to model revenue streams of software companies and addresses ques
models consist of and how do companies differentiate their revenue model and describing attributes of revenue
business models and classifying and modeling
. It illustrates the findings with examples from
model classification,
To talk about business models and revenue models, these terms have to be defined. By able to classify the business model of a sof
Two dimensions are being used: types of goods and services and business model arch(cash and other assets), physical goods
intangible goods (software but also other (people´s time and effort).
They were derived from a study Available archetypes are creator, distributor,
and their
Software companies create revenue from selling software licenses and services to cus-This paper tries to model revenue streams of software companies and addresses questions
model to and describing attributes of revenue
and pro-modeling
. It illustrates the findings with examples from
, Hybrid
extending the able to classify the business model of a soft-
Two dimensions are being used: types of goods and services and business model arche-physical goods
(software but also other (people´s time and effort).
They were derived from a study Available archetypes are creator, distributor,
extending the t-e-
physical goods (software but also other
They were derived from a study Available archetypes are creator, distributor,
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
77
A creatorportant to know that the main work done by the creator is designing the product. An example is AppleApple designs the iPod in
A distributorcompanies in the wholesale and retail ind
A lessorples are landlords,
A brokerthe products and services. An example is a stock broker. Another exampness, which matches the advertiser
Figure 2 sults. Each combination of called a business pattern
Fig. 2: Business patterns from the column titled “Intangible”.
Since software vendors are focused on providing intangible goods and services like softwareus investigate what the specifics of the different business
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often this is an expensive task, on his own payroll. After the invention activities have ended, software companies make use of other archetypes for intangible products to make them available to selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cutomers. Typical ways to distribute intellectual property in the software industry are OEM agreements for software components and distribution rights for redistributables, which are often bundled with dvelopment tools and are integrated and shipped with a softwar
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be software but also other intellectual property, Software companies provide usage rights for th
3 Business, Business Model and Revenue Model
For the sake of simplicity, let´s assume a business (software company) under consideration has one or more business models and one or more revenue models.
creator uses supplied goods and internal assets and transforms them to create a portant to know that the main work done by the creator is designing the product. An example is AppleApple designs the iPod in
distributor buys a product and provides the same product to customers. Obvious examples are companies in the wholesale and retail ind
lessor provides the temporary right to use, but not own, a product or service to customers. Exalandlords, lendors of money
broker facilitates the matching of potential buyers and sellers. A broker never takes ownership of the products and services. An example is a stock broker. Another exampness, which matches the advertiser
Figure 2 shows the combination of archetypes and type of goods offered, resulting in 16 different rEach combination of
called a business pattern
: Business patterns from the column titled “Intangible”.
Since software vendors are focused on providing intangible goods and services like softwareus investigate what the specifics of the different business
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
an expensive task, on his own payroll. After the invention activities have ended, software companies make use of other archetypes for intangible products to make them available to selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cuTypical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with dvelopment tools and are integrated and shipped with a softwar
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be software but also other intellectual property, Software companies provide usage rights for th
Business, Business Model and Revenue Model
For the sake of simplicity, let´s assume a business (software company) under consideration has one or more business models and one or more revenue models.
uses supplied goods and internal assets and transforms them to create a portant to know that the main work done by the creator is designing the product. An example is AppleApple designs the iPod in California. So Apple
buys a product and provides the same product to customers. Obvious examples are companies in the wholesale and retail ind
provides the temporary right to use, but not own, a product or service to customers. Exalendors of money
facilitates the matching of potential buyers and sellers. A broker never takes ownership of the products and services. An example is a stock broker. Another exampness, which matches the advertisers
shows the combination of archetypes and type of goods offered, resulting in 16 different rEach combination of the type o
called a business pattern.
are inside the matrixfrom the column titled “Intangible”.
Since software vendors are focused on providing intangible goods and services like softwareus investigate what the specifics of the different business
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
an expensive task, e.g. when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other archetypes for intangible products to make them available to selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cuTypical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with dvelopment tools and are integrated and shipped with a softwar
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be software but also other intellectual property, Software companies provide usage rights for th
Business, Business Model and Revenue Model
For the sake of simplicity, let´s assume a business (software company) under consideration has one or more business models and one or more revenue models.
uses supplied goods and internal assets and transforms them to create a portant to know that the main work done by the creator is designing the product. An example is Apple
California. So Apple uses the business model archetype buys a product and provides the same product to customers. Obvious examples are
companies in the wholesale and retail industries, or value added resellers in the software industryprovides the temporary right to use, but not own, a product or service to customers. Exa
lendors of money or software companiefacilitates the matching of potential buyers and sellers. A broker never takes ownership of
the products and services. An example is a stock broker. Another examp with potential customers.
shows the combination of archetypes and type of goods offered, resulting in 16 different rthe type of goods/services provided
are inside the matrix [2]. Software companies typically, but not exclusively, use from the column titled “Intangible”. Consulting services are classified as “Contractor”
Since software vendors are focused on providing intangible goods and services like softwareus investigate what the specifics of the different business
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other archetypes for intangible products to make them available to selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cuTypical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with dvelopment tools and are integrated and shipped with a softwar
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be software but also other intellectual property, like knowledge, Software companies provide usage rights for their software to customers and thus act as IP Lessors.
Business, Business Model and Revenue Model
For the sake of simplicity, let´s assume a business (software company) under consideration has one or more business models and one or more revenue models.
uses supplied goods and internal assets and transforms them to create a portant to know that the main work done by the creator is designing the product. An example is Apple
uses the business model archetype buys a product and provides the same product to customers. Obvious examples are
, or value added resellers in the software industryprovides the temporary right to use, but not own, a product or service to customers. Exa
companies that facilitates the matching of potential buyers and sellers. A broker never takes ownership of
the products and services. An example is a stock broker. Another exampwith potential customers.
shows the combination of archetypes and type of goods offered, resulting in 16 different rf goods/services provided
. Software companies typically, but not exclusively, use Consulting services are classified as “Contractor”
Since software vendors are focused on providing intangible goods and services like softwareus investigate what the specifics of the different business patterns
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other archetypes for intangible products to make them available to customers. Common are IP distributor for selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cuTypical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with dvelopment tools and are integrated and shipped with a software product.
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be like knowledge, eir software to customers and thus act as IP Lessors.
Business, Business Model and Revenue Model
For the sake of simplicity, let´s assume a business (software company) under consideration has one or more business models and one or more revenue models. A business model
uses supplied goods and internal assets and transforms them to create a portant to know that the main work done by the creator is designing the product. An example is Apple
uses the business model archetype buys a product and provides the same product to customers. Obvious examples are
, or value added resellers in the software industryprovides the temporary right to use, but not own, a product or service to customers. Exa
s that license their software to customersfacilitates the matching of potential buyers and sellers. A broker never takes ownership of
the products and services. An example is a stock broker. Another example is Google
shows the combination of archetypes and type of goods offered, resulting in 16 different rf goods/services provided and the business model archetype
. Software companies typically, but not exclusively, use Consulting services are classified as “Contractor”
Since software vendors are focused on providing intangible goods and services like softwarepatterns are for intangible goods/services.
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other
customers. Common are IP distributor for selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cuTypical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with de product.
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be like knowledge, brand imageeir software to customers and thus act as IP Lessors.
Business, Business Model and Revenue Model
For the sake of simplicity, let´s assume a business (software company) under consideration has one or siness model
uses supplied goods and internal assets and transforms them to create a productportant to know that the main work done by the creator is designing the product. An example is Apple
uses the business model archetype creator.buys a product and provides the same product to customers. Obvious examples are
, or value added resellers in the software industryprovides the temporary right to use, but not own, a product or service to customers. Exa
license their software to customersfacilitates the matching of potential buyers and sellers. A broker never takes ownership of
le is Google´s advertising bus
shows the combination of archetypes and type of goods offered, resulting in 16 different rthe business model archetype
. Software companies typically, but not exclusively, use Consulting services are classified as “Contractor”
Since software vendors are focused on providing intangible goods and services like softwareare for intangible goods/services.
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other
customers. Common are IP distributor for selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cuTypical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with d
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be brand image, trade secrets or patents.
eir software to customers and thus act as IP Lessors.
For the sake of simplicity, let´s assume a business (software company) under consideration has one or determines which goods or
product. It is im-portant to know that the main work done by the creator is designing the product. An example is Apple
creator. buys a product and provides the same product to customers. Obvious examples are
, or value added resellers in the software industry. provides the temporary right to use, but not own, a product or service to customers. Exam-
license their software to customers. facilitates the matching of potential buyers and sellers. A broker never takes ownership of
´s advertising busi-
shows the combination of archetypes and type of goods offered, resulting in 16 different re-the business model archetype is
. Software companies typically, but not exclusively, use business
Since software vendors are focused on providing intangible goods and services like software [3], let are for intangible goods/services.
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other
customers. Common are IP distributor for selling the intellectual property or IP lessor to provide usage rights for the software to customers.
IP distributors sell their intellectual property rights or another software vendor´s usage rights to cus-Typical ways to distribute intellectual property in the software industry are OEM agreements
for software components and distribution rights for redistributables, which are often bundled with de-
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be , trade secrets or patents.
eir software to customers and thus act as IP Lessors.
For the sake of simplicity, let´s assume a business (software company) under consideration has one or which goods or
m-portant to know that the main work done by the creator is designing the product. An example is Apple.
buys a product and provides the same product to customers. Obvious examples are
m-
facilitates the matching of potential buyers and sellers. A broker never takes ownership of i-
e-is
business
, let
Inventors create intangible services or goods. The main task is inventing (designing) the new service or product. Being an inventor is a widespread business model archetype in the software industry. Often
when the inventor designs and programs software leveraging developers on his own payroll. After the invention activities have ended, software companies make use of other
customers. Common are IP distributor for
s-Typical ways to distribute intellectual property in the software industry are OEM agreements
e-
IP Lessors are providing intangible goods “for rent”. As outlined above, intangible goods can be , trade secrets or patents.
For the sake of simplicity, let´s assume a business (software company) under consideration has one or which goods or
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
78
services are provided by a companypatterns. type of business, but not how the business is run. models, please review the literature
Fig. 3: Business model
A revenue modelThe compensation usually, but not necessarily, is a payment. A companyrevenue model for
A revenue model consists of one or several compensates for each of the SaaS, the customer usually ical Lessor
There are flexible ways to create revenue streams for the goods and services provided. Different types of revenue models and attributes All of these attributes except causality also apply to revenue models.
3.1 Compensator
The Compensator is the pcreation of a revenue model, you first look at the different parties which could provide the compenstion. A simple case of a compensator for goods andinstance of a service that was consumed.
3.2 Effect
The effect of the compensation tells if is:
A good or a service might have be used without a volunteer.
A good or a service might be compensated with vice from Google is compensated with information about the searching user.
A good or a service might be compensated financially by example is
services are provided by a companypatterns. A business model is a model on type level, which means that it is a generic model type of business, but not how the business is run. models, please review the literature
Business model and revenue model
revenue model defines hThe compensation usually, but not necessarily, is a payment. A companyrevenue model for each the
A revenue model consists of one or several compensates for each of the SaaS, the customer usually ical Lessor, IP Lessor and Contractor business.
There are flexible ways to create revenue streams for the goods and services provided. Different revenue models and
attributes that apply to revenue streamsAll of these attributes except causality also apply to revenue models.
Compensator
The Compensator is the pcreation of a revenue model, you first look at the different parties which could provide the compenstion. A simple case of a compensator for goods andinstance of a service that was consumed.
Effect
he effect of the compensation tells if
A good or a service might have be used without monetary a volunteer.
A good or a service might be compensated with vice from Google is compensated with information about the searching user.
A good or a service might be compensated financially by example is a barber, who gets compensated by cash or credit card paym
services are provided by a companyA business model is a model on type level, which means that it is a generic model
type of business, but not how the business is run. models, please review the literature
and revenue model
defines how a company is compensated for each of the The compensation usually, but not necessarily, is a payment. A company
each the company´A revenue model consists of one or several
compensates for each of the business patternsSaaS, the customer usually pays one subscription fee for the combination of
, IP Lessor and Contractor business.There are flexible ways to create revenue streams for the goods and services provided. Different
revenue models and revenue streams are created by choosing different values for the following that apply to revenue streams
All of these attributes except causality also apply to revenue models.
The Compensator is the party, which provides the compensation (creation of a revenue model, you first look at the different parties which could provide the compenstion. A simple case of a compensator for goods andinstance of a service that was consumed.
he effect of the compensation tells if
A good or a service might have no compensationmonetary compensation under a cer
A good or a service might be compensated with vice from Google is compensated with information about the searching user.
A good or a service might be compensated financially by barber, who gets compensated by cash or credit card paym
services are provided by a company. Formally, tA business model is a model on type level, which means that it is a generic model
type of business, but not how the business is run. [2,3].
and revenue model components
ow a company is compensated for each of the The compensation usually, but not necessarily, is a payment. A company
company´s business patternA revenue model consists of one or several
business patterns offered. But this is not necessarily the case. pays one subscription fee for the combination of
, IP Lessor and Contractor business. There are flexible ways to create revenue streams for the goods and services provided. Different
revenue streams are created by choosing different values for the following that apply to revenue streams [2]:
All of these attributes except causality also apply to revenue models.
arty, which provides the compensation (creation of a revenue model, you first look at the different parties which could provide the compenstion. A simple case of a compensator for goods andinstance of a service that was consumed.
he effect of the compensation tells if a compensation takes place and of what type the compensation
no compensationcompensation under a cer
A good or a service might be compensated with vice from Google is compensated with information about the searching user.
A good or a service might be compensated financially by barber, who gets compensated by cash or credit card paym
Formally, the business modelA business model is a model on type level, which means that it is a generic model
type of business, but not how the business is run. For further definition and information on business
s
ow a company is compensated for each of the The compensation usually, but not necessarily, is a payment. A company
s business patterns. A revenue model consists of one or several revenue streams
offered. But this is not necessarily the case. pays one subscription fee for the combination of
There are flexible ways to create revenue streams for the goods and services provided. Different revenue streams are created by choosing different values for the following
CompensatorAll of these attributes except causality also apply to revenue models.
arty, which provides the compensation (creation of a revenue model, you first look at the different parties which could provide the compenstion. A simple case of a compensator for goods and services is that a customer pays in cash for each
compensation takes place and of what type the compensation
no compensation. An example is open sourcecompensation under a certain license. Another example is the social work of
A good or a service might be compensated with other goods and servicesvice from Google is compensated with information about the searching user.
A good or a service might be compensated financially by different forms of paymentbarber, who gets compensated by cash or credit card paym
business model consists of A business model is a model on type level, which means that it is a generic model
For further definition and information on business
ow a company is compensated for each of the The compensation usually, but not necessarily, is a payment. A company has the freedom to create a
revenue streams [4,5]. Usually offered. But this is not necessarily the case.
pays one subscription fee for the combination of
There are flexible ways to create revenue streams for the goods and services provided. Different revenue streams are created by choosing different values for the following
Compensator, Effect, RatingAll of these attributes except causality also apply to revenue models.
arty, which provides the compensation (e.g. a customer or third parties).creation of a revenue model, you first look at the different parties which could provide the compens
services is that a customer pays in cash for each
compensation takes place and of what type the compensation
example is open sourcetain license. Another example is the social work of
other goods and servicesvice from Google is compensated with information about the searching user.
different forms of paymentbarber, who gets compensated by cash or credit card payments.
consists of one or many business A business model is a model on type level, which means that it is a generic model
For further definition and information on business
ow a company is compensated for each of the business patternshas the freedom to create a
Usually one revenue stream offered. But this is not necessarily the case.
pays one subscription fee for the combination of the business patterns Phy
There are flexible ways to create revenue streams for the goods and services provided. Different revenue streams are created by choosing different values for the following
Rating, Charging
customer or third parties).creation of a revenue model, you first look at the different parties which could provide the compens
services is that a customer pays in cash for each
compensation takes place and of what type the compensation
example is open source software, which can tain license. Another example is the social work of
other goods and services in return. The search sevice from Google is compensated with information about the searching user.
different forms of paymentents.
one or many business A business model is a model on type level, which means that it is a generic model showing the
For further definition and information on business
business patterns provided. has the freedom to create a
revenue stream offered. But this is not necessarily the case. In the case of
the business patterns Phys-
There are flexible ways to create revenue streams for the goods and services provided. Different revenue streams are created by choosing different values for the following
Charging and Timing
customer or third parties). In the creation of a revenue model, you first look at the different parties which could provide the compensa-
services is that a customer pays in cash for each
compensation takes place and of what type the compensation
software, which can tain license. Another example is the social work of
The search ser-
different forms of payment. An obvious
one or many business showing the
For further definition and information on business
provided. has the freedom to create a
revenue stream In the case of
s-
There are flexible ways to create revenue streams for the goods and services provided. Different revenue streams are created by choosing different values for the following
Timing.
In the a-
services is that a customer pays in cash for each
compensation takes place and of what type the compensation
software, which can tain license. Another example is the social work of
r-
. An obvious
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
79
3.3 Causality
The relationship between business models and revenue models is based on causality. is always linked to exactly one business patternsality). relationship, which allows flexibility in
3.4 Rating
Rating is defined as the done based on amounts or on time or ratings are combinations of both. on the number of goods and services consumed. There are many different rdifferent ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software solution or the throughputnumber of users that have access to the offering.
Fig. 4: Types of Ratings
Ratings by timetime or for a certain period of time. A cell phone network provider could for example rate for initiation of a call and for each minute of the call by one minute increments
3.5 Charging
Charging and service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or fixed fee per megabyte throughput for a
Extreme examples of rating and charging in the software industry are all you can eat licenses. software component, which means that the software can be used forever. So the usage is rated by time for unlimited time, but compensated for perpetual use.
An all you can eat licensea software vendor. In this case, the software vendor is bundlingis usually done for large customerscustomer and to lock
Causality
The relationship between business models and revenue models is based on causality. is always linked to exactly one business pattern
Please note that the relationship between business model and revenue model is an indirect relationship, which allows flexibility in
Rating
is defined as the done based on amounts or on time or ratings are combinations of both. on the number of goods and services consumed. There are many different rdifferent ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software solution or the throughputnumber of users that have access to the offering.
: Types of Ratings
Ratings by time are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation of a call and for each minute of the call by one minute increments
Charging
Charging is defined as the and service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or fixed fee per megabyte throughput for a
Extreme examples of rating and charging in the software industry are all you can eat licenses. software component, which means that the software can be used forever. So the usage is rated by time for unlimited time, but compensated for perpetual use.
all you can eat licensea software vendor. In this case, the software vendor is bundlingis usually done for large customerscustomer and to lock-out competitors from that customer.
The relationship between business models and revenue models is based on causality. is always linked to exactly one business pattern
Please note that the relationship between business model and revenue model is an indirect relationship, which allows flexibility in
is defined as the way to measuredone based on amounts or on time or ratings are combinations of both. on the number of goods and services consumed. There are many different rdifferent ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software solution or the throughput of a software solution. A software as a service provider usually rates the number of users that have access to the offering.
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation of a call and for each minute of the call by one minute increments
is defined as the way to define the compensation amount for a certain ratingand service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or fixed fee per megabyte throughput for a
Extreme examples of rating and charging in the software industry are all you can eat licenses. Perpetual licensesoftware component, which means that the software can be used forever. So the usage is rated by time for unlimited time, but compensated for perpetual use.
all you can eat license might refer to the customer having a right to use all software solutions of a software vendor. In this case, the software vendor is bundlingis usually done for large customers
out competitors from that customer.
The relationship between business models and revenue models is based on causality. is always linked to exactly one business pattern that represents the cause for the revenue stream
Please note that the relationship between business model and revenue model is an indirect relationship, which allows flexibility in creating combinations of business models and revenue models.
way to measure the usage or consumption of goods and services. Ratings are done based on amounts or on time or ratings are combinations of both. on the number of goods and services consumed. There are many different rdifferent ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software
of a software solution. A software as a service provider usually rates the number of users that have access to the offering.
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation of a call and for each minute of the call by one minute increments
way to define the compensation amount for a certain ratingand service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or fixed fee per megabyte throughput for a data cleansing solution or a combination of the above.
Extreme examples of rating and charging in the software industry are Perpetual license mean
software component, which means that the software can be used forever. So the usage is rated by time for unlimited time, but compensated for perpetual use.
might refer to the customer having a right to use all software solutions of a software vendor. In this case, the software vendor is bundling
of software vendorsout competitors from that customer.
The relationship between business models and revenue models is based on causality. that represents the cause for the revenue stream
Please note that the relationship between business model and revenue model is an indirect creating combinations of business models and revenue models.
the usage or consumption of goods and services. Ratings are done based on amounts or on time or ratings are combinations of both. on the number of goods and services consumed. There are many different rdifferent ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software
of a software solution. A software as a service provider usually rates the
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation of a call and for each minute of the call by one minute increments
way to define the compensation amount for a certain ratingand service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or
data cleansing solution or a combination of the above.Extreme examples of rating and charging in the software industry are
means that a revenue stream relates to perpetual use of a software component, which means that the software can be used forever. So the usage is rated by time for unlimited time, but compensated for perpetual use.
might refer to the customer having a right to use all software solutions of a software vendor. In this case, the software vendor is bundling
ware vendors. It is a good way to sell more products into a out competitors from that customer.
The relationship between business models and revenue models is based on causality. that represents the cause for the revenue stream
Please note that the relationship between business model and revenue model is an indirect creating combinations of business models and revenue models.
the usage or consumption of goods and services. Ratings are done based on amounts or on time or ratings are combinations of both. Ratings by amounton the number of goods and services consumed. There are many different rdifferent ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software
of a software solution. A software as a service provider usually rates the
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation of a call and for each minute of the call by one minute increments.
way to define the compensation amount for a certain ratingand service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or
data cleansing solution or a combination of the above.Extreme examples of rating and charging in the software industry are used for
s that a revenue stream relates to perpetual use of a software component, which means that the software can be used forever. So the usage is rated by time
might refer to the customer having a right to use all software solutions of a software vendor. In this case, the software vendor is bundling all of its products into one bundle.
. It is a good way to sell more products into a
The relationship between business models and revenue models is based on causality. A revenue stream that represents the cause for the revenue stream
Please note that the relationship between business model and revenue model is an indirect creating combinations of business models and revenue models.
the usage or consumption of goods and services. Ratings are Ratings by amount
on the number of goods and services consumed. There are many different ratings possible and many different ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software
of a software solution. A software as a service provider usually rates the
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation
way to define the compensation amount for a certain ratingand service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or
data cleansing solution or a combination of the above.used for perpetual license
s that a revenue stream relates to perpetual use of a software component, which means that the software can be used forever. So the usage is rated by time
might refer to the customer having a right to use all software solutions of all of its products into one bundle.
. It is a good way to sell more products into a
A revenue stream that represents the cause for the revenue stream (Cau-
Please note that the relationship between business model and revenue model is an indirect creating combinations of business models and revenue models.
the usage or consumption of goods and services. Ratings are Ratings by amount are based
atings possible and many different ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software
of a software solution. A software as a service provider usually rates the
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation
way to define the compensation amount for a certain rating of goods and service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or
data cleansing solution or a combination of the above. perpetual licenses and
s that a revenue stream relates to perpetual use of a software component, which means that the software can be used forever. So the usage is rated by time
might refer to the customer having a right to use all software solutions of all of its products into one bundle. This
. It is a good way to sell more products into a
A revenue stream u-
Please note that the relationship between business model and revenue model is an indirect
the usage or consumption of goods and services. Ratings are are based
atings possible and many different ratings are used in practice.Typical ratings by amount in the software industry are the number of processors of a computer that runs software or the number of users that has access to a software
of a software solution. A software as a service provider usually rates the
are also popular. You could allow the usage of a software or service for a limited time or for a certain period of time. A cell phone network provider could for example rate for initiation
of goods and service consumption. There is again tremendous freedom to create charging rules. Typical charging models in the software industry are fixed fees for each processor of a server or fixed fees per user or
and s that a revenue stream relates to perpetual use of a
software component, which means that the software can be used forever. So the usage is rated by time
might refer to the customer having a right to use all software solutions of This
. It is a good way to sell more products into a
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80
3.6 Pricing
There are different pricing mechanisms and strategies possible. We omit further discussions on pricing and therefore point to existing literature [2,3,6].
3.7 Timing of compensation
The timing of compensation tells at what time the compensation will happen and what additional conditions apply for the timing of the compensation. Examples we meet often are prepay, which means you pay before you are able to consume goods or services, by payment schedule, which might define certain payments at different points in time under certain payment conditions and post pay, meaning you pay after you were able to consume or have received or consumed the products or servic-es.
4 Hybrid business models and hybrid revenue models
If a business model is made up of several business patterns, it is called a hybrid business model. To create a hybrid business model in the real world, you could choose the business patterns Inventor, IP Lessor and Contractor to create a product software company. Hybrid business models can be a source of business model synergies to create competitive advantage, for example: when there is an asymme-tric market for companies offering that specific hybrid business model, like the early markets for on demand software or if a hybrid business model creates competitive advantage in markets due to syner-gies between business patterns or business models.
If a revenue model is made up of several revenue streams, we call it hybrid revenue model. By de-
finition, a hybrid business model always has a hybrid revenue model due to causality. Hybrid revenue models can be a source of revenue model synergies to create competitive advantage. This can be the case if a hybrid revenue model allows to fund cost of a business pattern with a revenue stream that is not connected by causality or to fund cost for a new business pattern. We will see examples later in this paper.
4.1 Hybrid business and hybrid revenue models in the software industry
Looking at the software industry, most software companies have a hybrid business model, because they are acting as an inventor and as an IP Lessor at the same time. In addition, software companies can differentiate their business model by offering software as a product, software as a service or a combina-tion of both.
Software as a product (SaaP) means that a copy of the software product gets delivered to the cus-
tomer and the customers gets usage rights, usually in the form of a license, for using the software for a specified purpose. The customer does not get ownership of a product, but rights to use the software for a compensation back to the software company. Cost of support and of providing maintenance releases is carried by the IP Lessor. The cost of operations of the solution and the license fees are carried by the customer. The typical Software as a product business represents a hybrid business model as shown in figure 5.
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
81
Fig. 5: Hybridcombination if they offer Software as a product.
The hybrid revenue model for software as a product is usually made up of the following revenue streams: pattern in the software product business, the Inventor business pattern is often associated with sunk cost, IP Lessor (license fees) and
Software as a servicerights for a specified time and a specified purpose. The software runs at a hosting provider or in the cloud and is not delivered physically to the customer
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the service. The software is operated leveraging the business patterns physical lessor (hardware usage), IP Lessor (usage rights) and Contractor (operating, maintaining and supporting). carries the sunk cost of development, tions of the
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not
for each of the business patterns contained in SaaS. as follows:pattern in the software product business, the Inventor business pattern is often associated with sunk cost, IP Lessor (license fees)ance and support fees).
Hybrid business model for Software as a productcombination if they offer Software as a product.
The hybrid revenue model for software as a product is usually made up of the following revenue Inventor (no
pattern in the software product business, the Inventor business pattern is often associated with sunk IP Lessor (license fees) and
Software as a servicefor a specified time and a specified purpose. The software runs at a hosting provider or in the and is not delivered physically to the customer
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
Lessor (usage rights) and Contractor (operating, maintaining and supporting). the sunk cost of development,
tions of the software.
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not for each of the business patterns contained in SaaS. as follows: Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
IP Lessor (license fees)ance and support fees).
business model for Software as a productcombination if they offer Software as a product.
The hybrid revenue model for software as a product is usually made up of the following revenue compensation
pattern in the software product business, the Inventor business pattern is often associated with sunk IP Lessor (license fees) and Contractor (service, maintenan
Software as a service (SaaS) means that the customer gets access to the software for a specified time and a specified purpose. The software runs at a hosting provider or in the and is not delivered physically to the customer
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
Lessor (usage rights) and Contractor (operating, maintaining and supporting). the sunk cost of development,
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not for each of the business patterns contained in SaaS.
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
IP Lessor (license fees), Physical Lessor (usage fees)ance and support fees).
business model for Software as a productcombination if they offer Software as a product.
The hybrid revenue model for software as a product is usually made up of the following revenue compensation), since there is no direct compensation for the Inventor business
pattern in the software product business, the Inventor business pattern is often associated with sunk Contractor (service, maintenanmeans that the customer gets access to the software
for a specified time and a specified purpose. The software runs at a hosting provider or in the and is not delivered physically to the customer
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
Lessor (usage rights) and Contractor (operating, maintaining and supporting). the sunk cost of development, the cost of supp
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not for each of the business patterns contained in SaaS.
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
Physical Lessor (usage fees)
business model for Software as a product [7]. Software companies typically use these archetypes in
The hybrid revenue model for software as a product is usually made up of the following revenue since there is no direct compensation for the Inventor business
pattern in the software product business, the Inventor business pattern is often associated with sunk Contractor (service, maintenanmeans that the customer gets access to the software
for a specified time and a specified purpose. The software runs at a hosting provider or in the and is not delivered physically to the customer.
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
Lessor (usage rights) and Contractor (operating, maintaining and supporting). the cost of support and maintenance as well as the cost of oper
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not for each of the business patterns contained in SaaS. The hybrid revenue model for
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
Physical Lessor (usage fees) and
oftware companies typically use these archetypes in
The hybrid revenue model for software as a product is usually made up of the following revenue since there is no direct compensation for the Inventor business
pattern in the software product business, the Inventor business pattern is often associated with sunk Contractor (service, maintenance and support).means that the customer gets access to the software
for a specified time and a specified purpose. The software runs at a hosting provider or in the
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
Lessor (usage rights) and Contractor (operating, maintaining and supporting). ort and maintenance as well as the cost of oper
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not The hybrid revenue model for
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
and Contractor (operation, service, mainte
oftware companies typically use these archetypes in
The hybrid revenue model for software as a product is usually made up of the following revenue since there is no direct compensation for the Inventor business
pattern in the software product business, the Inventor business pattern is often associated with sunk ce and support).
means that the customer gets access to the software as well as usage for a specified time and a specified purpose. The software runs at a hosting provider or in the
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
Lessor (usage rights) and Contractor (operating, maintaining and supporting). The software companyort and maintenance as well as the cost of oper
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not The hybrid revenue model for SaaS is constructed
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
Contractor (operation, service, mainte
oftware companies typically use these archetypes in
The hybrid revenue model for software as a product is usually made up of the following revenue since there is no direct compensation for the Inventor business
pattern in the software product business, the Inventor business pattern is often associated with sunk
as well as usage for a specified time and a specified purpose. The software runs at a hosting provider or in the
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
software companyort and maintenance as well as the cost of opera-
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not SaaS is constructed
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
Contractor (operation, service, mainten-
oftware companies typically use these archetypes in
The hybrid revenue model for software as a product is usually made up of the following revenue since there is no direct compensation for the Inventor business
pattern in the software product business, the Inventor business pattern is often associated with sunk
as well as usage for a specified time and a specified purpose. The software runs at a hosting provider or in the
The hybrid business model for SaaS consists of the business patterns Inventor, Physical Lessor, IP Lessor and Contractor. The Inventor business pattern creates the software product that is underlying the ervice. The software is operated leveraging the business patterns physical lessor (hardware usage), IP
software company a-
For most SaaS offerings in the market, the customer pays for the usage of the SaaS offering, but not SaaS is constructed
Inventor (no compensation), since there is no direct compensation for the Inventor business pattern in the software product business, the Inventor business pattern is often associated with sunk
n-
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
82
Fig. 6: Hybrid business model for Software as a servicecombination if tware use and operations services to the customer as part of the SaaS offering.
5 Revenue
Now let us apply this frameworavailability of information about their business models: SAP, Microsoft and Google.SAP AG, a germa
SAP is a [8]. SAP´s focus is on offering software as a product, but SAP is actively working on increasing the software as a service business. In addition, support services.
5.1 SAP business model details
One part of SAP´s business model is acting as an inventor. developmentwork for SAP if and only if there are the future revenue streamcover for sunk cost of inventions.
Another part of SAP´s business model is the IP distributor business. Here revenue share partner property of SAP
Furthermore, While SAP access to small and medium sized customer companies. SAP offers all models of the IP Lessor busness. While most of the cuing the software as a service business.
Yet another business at SAP is the financial lessor business to pay for hardwaremand, which are running on hardware in SAP data centers
SAP also well as customer specific development SAP´s SaaS
Hybrid business model for Software as a servicecombination if they offer Software as a service. Key difference to SaaP is that the software vendor offers the harware use and operations services to the customer as part of the SaaS offering.
Revenue models of successful software companies
Now let us apply this frameworavailability of information about their business models: SAP, Microsoft and Google.SAP AG, a german company
SAP is a 11,5 billion Euro SAP´s focus is on offering software as a product, but SAP is actively working on increasing the
software as a service business. In addition, support services.
SAP business model details
One part of SAP´s business model is acting as an inventor. development, but there is no direct revenue stre
for SAP if and only if there are the future to make the brearevenue streams for IP Lessor and Contractor business (license, cover for sunk cost of inventions.
Another part of SAP´s business model is the IP distributor business. Here revenue share partner for a number of partner solutionsproperty of SAP partners
Furthermore, SAP has While SAP owns direct business for vaccess to small and medium sized customer companies. SAP offers all models of the IP Lessor busness. While most of the cuing the software as a service business.
Yet another business at SAP is the financial lessor business for their license fees.
hardware. In addition, SAP offers , which are running on hardware in SAP data centers
also acts as a contractor by providingcustomer specific development
SaaS products.
Hybrid business model for Software as a servicehey offer Software as a service. Key difference to SaaP is that the software vendor offers the har
ware use and operations services to the customer as part of the SaaS offering.
models of successful software companies
Now let us apply this framework to three software companies, which were chosen availability of information about their business models: SAP, Microsoft and Google.
company selling software and services in the area of enterprise11,5 billion Euro revenue company
SAP´s focus is on offering software as a product, but SAP is actively working on increasing the software as a service business. In addition,
SAP business model details
One part of SAP´s business model is acting as an inventor. , but there is no direct revenue stre
for SAP if and only if there are to make the break even for each product
IP Lessor and Contractor business (license, cover for sunk cost of inventions.
Another part of SAP´s business model is the IP distributor business. Here for a number of partner solutions
partners while avoiding the sunk cost of inventing these solutionsSAP has IP Lessor business working in a
direct business for vaccess to small and medium sized customer companies. SAP offers all models of the IP Lessor busness. While most of the customers run along the traditional model of ing the software as a service business.
Yet another business at SAP is the financial lessor business their license fees. SAP also
. In addition, SAP offers SaaS, which are running on hardware in SAP data centers
acts as a contractor by providingcustomer specific development
Hybrid business model for Software as a servicehey offer Software as a service. Key difference to SaaP is that the software vendor offers the har
ware use and operations services to the customer as part of the SaaS offering.
models of successful software companies
k to three software companies, which were chosen availability of information about their business models: SAP, Microsoft and Google.
selling software and services in the area of enterpriserevenue company, with more than
SAP´s focus is on offering software as a product, but SAP is actively working on increasing the software as a service business. In addition, SAP also offers system integrator services and a variety of
One part of SAP´s business model is acting as an inventor. , but there is no direct revenue stream compensating for the inventor activities
for SAP if and only if there are enough customers for each product
IP Lessor and Contractor business (license,
Another part of SAP´s business model is the IP distributor business. Here for a number of partner solutions
while avoiding the sunk cost of inventing these solutionsIP Lessor business working in a
direct business for very large and large enterprises, they engage with partners to get access to small and medium sized customer companies. SAP offers all models of the IP Lessor bus
stomers run along the traditional model of ing the software as a service business.
Yet another business at SAP is the financial lessor business also acts as a physical lessor by running SaaS solutions like
, which are running on hardware in SAP data centersacts as a contractor by providing consulting
customer specific development for SAP´s on premise offerings as well as
Hybrid business model for Software as a service [7]. Software companies typically use these archetypes in hey offer Software as a service. Key difference to SaaP is that the software vendor offers the har
ware use and operations services to the customer as part of the SaaS offering.
models of successful software companies
k to three software companies, which were chosen availability of information about their business models: SAP, Microsoft and Google.
selling software and services in the area of enterprise, with more than
SAP´s focus is on offering software as a product, but SAP is actively working on increasing the SAP also offers system integrator services and a variety of
One part of SAP´s business model is acting as an inventor. SAP´s inventor business means sam compensating for the inventor activities
enough customers paying for licenses, maintenance and support for each product invented. By having a hybrid business model, S
IP Lessor and Contractor business (license,
Another part of SAP´s business model is the IP distributor business. Here for a number of partner solutions. SAP distributes
while avoiding the sunk cost of inventing these solutionsIP Lessor business working in a direct a
ery large and large enterprises, they engage with partners to get access to small and medium sized customer companies. SAP offers all models of the IP Lessor bus
stomers run along the traditional model of
Yet another business at SAP is the financial lessor business acts as a physical lessor by running
solutions like SAP Business ByDesign or , which are running on hardware in SAP data centers.
onsulting services, for SAP´s on premise offerings as well as
Software companies typically use these archetypes in hey offer Software as a service. Key difference to SaaP is that the software vendor offers the har
ware use and operations services to the customer as part of the SaaS offering.
models of successful software companies
k to three software companies, which were chosen availability of information about their business models: SAP, Microsoft and Google.
selling software and services in the area of enterprise, with more than 100,000
SAP´s focus is on offering software as a product, but SAP is actively working on increasing the SAP also offers system integrator services and a variety of
SAP´s inventor business means sam compensating for the inventor activities
paying for licenses, maintenance and support By having a hybrid business model, S
IP Lessor and Contractor business (license, maintenance and support
Another part of SAP´s business model is the IP distributor business. Here SAP distributes usage rights for the intellectual
while avoiding the sunk cost of inventing these solutionsdirect and indirect
ery large and large enterprises, they engage with partners to get access to small and medium sized customer companies. SAP offers all models of the IP Lessor bus
stomers run along the traditional model of SaaP, SAP is increasingly targe
Yet another business at SAP is the financial lessor business since SAP offers financing acts as a physical lessor by running customer
SAP Business ByDesign or
services, support and maintenance services as for SAP´s on premise offerings as well as
Software companies typically use these archetypes in hey offer Software as a service. Key difference to SaaP is that the software vendor offers the har
k to three software companies, which were chosen for availability of information about their business models: SAP, Microsoft and Google. The first one
selling software and services in the area of enterprise applications customers in 120
SAP´s focus is on offering software as a product, but SAP is actively working on increasing the SAP also offers system integrator services and a variety of
SAP´s inventor business means sam compensating for the inventor activities
paying for licenses, maintenance and support By having a hybrid business model, S
maintenance and support
Another part of SAP´s business model is the IP distributor business. Here SAP acts as a reseller usage rights for the intellectual
while avoiding the sunk cost of inventing these solutions. nd indirect way with customers.
ery large and large enterprises, they engage with partners to get access to small and medium sized customer companies. SAP offers all models of the IP Lessor bus
, SAP is increasingly targe
offers financing customer software
SAP Business ByDesign or SAP
support and maintenance services as for SAP´s on premise offerings as well as operating services for
Software companies typically use these archetypes in
hey offer Software as a service. Key difference to SaaP is that the software vendor offers the hard-
for their size and The first one is
applications. customers in 120 countries
SAP´s focus is on offering software as a product, but SAP is actively working on increasing the SAP also offers system integrator services and a variety of
SAP´s inventor business means sunk cost of am compensating for the inventor activities. This would
paying for licenses, maintenance and support in By having a hybrid business model, SAP´s
maintenance and support revenue)
SAP acts as a reseller and usage rights for the intellectual
with customers. ery large and large enterprises, they engage with partners to get
access to small and medium sized customer companies. SAP offers all models of the IP Lessor busi-, SAP is increasingly target-
offers financing to customers software on SAP´s SAP CRM on de-
support and maintenance services as operating services for
Software companies typically use these archetypes in d-
their size and is
countries SAP´s focus is on offering software as a product, but SAP is actively working on increasing the
SAP also offers system integrator services and a variety of
of would
in AP´s
revenue)
and usage rights for the intellectual
with customers. ery large and large enterprises, they engage with partners to get
i-t-
customers on SAP´s
e-
support and maintenance services as operating services for
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
83
Last but not least, SAP has an IP broker businessplace called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share from partners if products in the partner ecosystem in order to increase revenue from the ecosystem.
5.1.1 SAP´s Figure 7 listed. The largest stream of revenue for SAP is revenue stream for SaaPrectly for the ecosystem.
Fig. 7: SAP
5.1.2 SAP´s revenue model synergiesSAP´s hybrid revenue model allows to fundrevenue models. In addition, funding of Saas activities by revenue nue generated also allows SAP to acquire companies and thus extend their business and revenue moels.
5.2 Microsoft
The second software vendor analysed herber of different business modelsis rapidly changing from a company that was solely focused ing software as a service solutions. As a difference to SAPas well as in the business to consumer businessMicrosoft has done significant steps forward in establishing a software as a service offering in the busness to consumer business (with through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are including Microsoft´s databases in their offerings etc.
Microsoft has direct and indirectIP Lessor bcross-licensing business with a number of software vendors.customers to find partner solutions on Microsoft´s website, so they match partner offerings with cutomers (IP broker business)broker businessadvertising opportunities via their search engine Bing and as part of Windows Live
Last but not least, SAP has an IP broker businessplace called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share from partners if leads for partner solutions are created via SAP Ecohub.products and services tha
partner ecosystem in order to increase revenue from the ecosystem.
SAP´s Revenue Model7 gives a simplified view of SAP´s revenue model, because only large streamsThe largest stream of revenue for SAP is
revenue stream for SaaPrectly for inventor business at SAP.the ecosystem.
SAP revenue model
SAP´s revenue model synergiesSAP´s hybrid revenue model allows to fundrevenue models. In addition, funding of Saas activities by revenue nue generated also allows SAP to acquire companies and thus extend their business and revenue mo
Microsoft´s business model
The second software vendor analysed herber of different business modelsis rapidly changing from a company that was solely focused
software as a service solutions. As a difference to SAPas well as in the business to consumer businessMicrosoft has done significant steps forward in establishing a software as a service offering in the busness to consumer business (with through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are including Microsoft´s databases in their offerings etc.
Microsoft has direct and indirectIP Lessor business with most of the revenue being indirect
licensing business with a number of software vendors.customers to find partner solutions on Microsoft´s website, so they match partner offerings with cu
(IP broker business)broker business. Microsoft paradvertising opportunities via their search engine Bing and as part of Windows Live
Last but not least, SAP has an IP broker businessplace called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
leads for partner solutions are created via SAP Ecohub.that are resold by SAP on SAP Ecohub.
partner ecosystem in order to increase revenue from the ecosystem.
Revenue Models gives a simplified view of SAP´s revenue model, because only large streams
The largest stream of revenue for SAP is revenue stream for SaaP. Revenue from maintenance and support services
business at SAP.
models.
SAP´s revenue model synergiesSAP´s hybrid revenue model allows to fundrevenue models. In addition, funding of Saas activities by revenue nue generated also allows SAP to acquire companies and thus extend their business and revenue mo
business model
The second software vendor analysed herber of different business models and over 60 billion US Dollar revenueis rapidly changing from a company that was solely focused
software as a service solutions. As a difference to SAPas well as in the business to consumer businessMicrosoft has done significant steps forward in establishing a software as a service offering in the busness to consumer business (with Windows Livethrough partners. Hardware vendors are bundling Microsoft operating systems, software vendors are including Microsoft´s databases in their offerings etc.
Microsoft has direct and indirect usiness with most of the revenue being indirect
licensing business with a number of software vendors.customers to find partner solutions on Microsoft´s website, so they match partner offerings with cu
(IP broker business). But Microsoft is also extending their business models into other types of Microsoft partners with Yahoo in the advertising/matchmaking business
advertising opportunities via their search engine Bing and as part of Windows Live
Last but not least, SAP has an IP broker businessplace called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
leads for partner solutions are created via SAP Ecohub.t are resold by SAP on SAP Ecohub.
partner ecosystem in order to increase revenue from the ecosystem.
gives a simplified view of SAP´s revenue model, because only large streamsThe largest stream of revenue for SAP is
evenue from maintenance and support servicesbusiness at SAP. Emerging revenue streams at SAP are for SaaS and revenue from
SAP´s revenue model synergies SAP´s hybrid revenue model allows to fund new product development from support and maintenance revenue models. In addition, funding of Saas activities by revenue nue generated also allows SAP to acquire companies and thus extend their business and revenue mo
The second software vendor analysed here is Microsoft. and over 60 billion US Dollar revenue
is rapidly changing from a company that was solely focused software as a service solutions. As a difference to SAP
as well as in the business to consumer businessMicrosoft has done significant steps forward in establishing a software as a service offering in the bus
Windows Live etc.)through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are including Microsoft´s databases in their offerings etc.
IP lessor business with end customusiness with most of the revenue being indirect
licensing business with a number of software vendors.customers to find partner solutions on Microsoft´s website, so they match partner offerings with cu
. But Microsoft is also extending their business models into other types of tners with Yahoo in the advertising/matchmaking business
advertising opportunities via their search engine Bing and as part of Windows Live
Last but not least, SAP has an IP broker business [2]. They place called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
leads for partner solutions are created via SAP Ecohub.t are resold by SAP on SAP Ecohub.
partner ecosystem in order to increase revenue from the ecosystem.
gives a simplified view of SAP´s revenue model, because only large streamsThe largest stream of revenue for SAP is revenue for maintenance and support
evenue from maintenance and support servicesEmerging revenue streams at SAP are for SaaS and revenue from
new product development from support and maintenance revenue models. In addition, funding of Saas activities by revenue nue generated also allows SAP to acquire companies and thus extend their business and revenue mo
is Microsoft. Microsoftand over 60 billion US Dollar revenue
is rapidly changing from a company that was solely focused on offering software as a productsoftware as a service solutions. As a difference to SAP [8]
as well as in the business to consumer business, Microsoft offers software and hardware solutionsMicrosoft has done significant steps forward in establishing a software as a service offering in the bus
etc.) and Microsoft does most of its revenue through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are including Microsoft´s databases in their offerings etc.
business with end customusiness with most of the revenue being indirect. In addition, Microsoft has a well established
licensing business with a number of software vendors. Microsoft´s Partner customers to find partner solutions on Microsoft´s website, so they match partner offerings with cu
. But Microsoft is also extending their business models into other types of tners with Yahoo in the advertising/matchmaking business
advertising opportunities via their search engine Bing and as part of Windows Live
They host an onlineplace called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
leads for partner solutions are created via SAP Ecohub. SAP is also advertising Overall, SAP is extending their
partner ecosystem in order to increase revenue from the ecosystem.
gives a simplified view of SAP´s revenue model, because only large streamsrevenue for maintenance and support
evenue from maintenance and support services Emerging revenue streams at SAP are for SaaS and revenue from
new product development from support and maintenance revenue models. In addition, funding of Saas activities by revenue from SaaP nue generated also allows SAP to acquire companies and thus extend their business and revenue mo
Microsoft is a very large company with a nuand over 60 billion US Dollar revenue. Analogous to SAP, Microsoft
on offering software as a product], Microsoft is in the b
Microsoft offers software and hardware solutionsMicrosoft has done significant steps forward in establishing a software as a service offering in the bus
Microsoft does most of its revenue through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are
business with end customers and oIn addition, Microsoft has a well established
Microsoft´s Partner customers to find partner solutions on Microsoft´s website, so they match partner offerings with cu
. But Microsoft is also extending their business models into other types of tners with Yahoo in the advertising/matchmaking business
advertising opportunities via their search engine Bing and as part of Windows Live
host an online solution partner markeplace called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
SAP is also advertising Overall, SAP is extending their
gives a simplified view of SAP´s revenue model, because only large streams of revenue are revenue for maintenance and support
is used to compensate indEmerging revenue streams at SAP are for SaaS and revenue from
new product development from support and maintenance from SaaP seems possible.
nue generated also allows SAP to acquire companies and thus extend their business and revenue mo
is a very large company with a nu. Analogous to SAP, Microsoft
on offering software as a product, Microsoft is in the business to business
Microsoft offers software and hardware solutionsMicrosoft has done significant steps forward in establishing a software as a service offering in the bus
Microsoft does most of its revenue through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are
ers and offers all models of the In addition, Microsoft has a well established
Microsoft´s Partner solution finder allows customers to find partner solutions on Microsoft´s website, so they match partner offerings with cu
. But Microsoft is also extending their business models into other types of tners with Yahoo in the advertising/matchmaking business
advertising opportunities via their search engine Bing and as part of Windows Live.
solution partner market-place called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
SAP is also advertising partner Overall, SAP is extending their activities
of revenue are revenue for maintenance and support followed by a
is used to compensate indi-Emerging revenue streams at SAP are for SaaS and revenue from
new product development from support and maintenance seems possible. The reve-
nue generated also allows SAP to acquire companies and thus extend their business and revenue mod-
is a very large company with a num-. Analogous to SAP, Microsoft
on offering software as a product to offer-usiness to business
Microsoft offers software and hardware solutionsMicrosoft has done significant steps forward in establishing a software as a service offering in the busi-
Microsoft does most of its revenue indirectly through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are
ffers all models of the In addition, Microsoft has a well established
solution finder allows customers to find partner solutions on Microsoft´s website, so they match partner offerings with cus-
. But Microsoft is also extending their business models into other types of tners with Yahoo in the advertising/matchmaking business and provides
t-place called SAP Ecohub. Partners can advertise their solutions there and SAP can get a revenue share
partner activities
of revenue are a i-
Emerging revenue streams at SAP are for SaaS and revenue from
new product development from support and maintenance e-d-
m-. Analogous to SAP, Microsoft
r-usiness to business
Microsoft offers software and hardware solutions, i-
indirectly through partners. Hardware vendors are bundling Microsoft operating systems, software vendors are
ffers all models of the In addition, Microsoft has a well established
solution finder allows s-
. But Microsoft is also extending their business models into other types of and provides
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
84
5.2.1 Microsoft´s revenue modelAs mentioned above, the main source of revenue is the ecosystem of partners(computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and datbase platforms. In addition, Mipliance sales (e.g. XBox).
Fig. 8: Microsoft
5.2.2 Microsoft´s revenue model synergiesMicrosoft´s direct and indirect revenueareas of business.
5.3 Google
Google is a business to many other areasbusiness.
What Google does Google has more products and ness model. We start with the products/services offered and the business model archetype.
Besides of Google´s main business as a broker, pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet.Google is mainly focused on inventing products for the like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business models Physical Lessor, IP Lessor and Contractor.operating
5.3.1 Google´s revenue model
This overview is limited to large sources of Google revenue. revenue at Google is from their broker business, which we will analyze in a little more detail below.
Microsoft´s revenue modelAs mentioned above, the main source of revenue is the ecosystem of partners(computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and datbase platforms. In addition, Mipliance sales (e.g. XBox).
Microsoft revenue
Microsoft´s revenue model synergiesMicrosoft´s direct and indirect revenueareas of business.
Google´s business model
is a software company business to many other areas
What Google does
Google has more products and ness model. We start with the products/services offered and the business model archetype.
Besides of Google´s main business as a broker, pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet.Google is mainly focused on inventing products for the like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business models Physical Lessor, IP Lessor and Contractor.operating systems and content of books.
Google´s revenue model
This overview is limited to large sources of Google revenue. revenue at Google is from their broker business, which we will analyze in a little more detail below.
Microsoft´s revenue modelAs mentioned above, the main source of revenue is the ecosystem of partners(computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and datbase platforms. In addition, Microsoft has revenue coming from SaaS (Windows Live) and from apliance sales (e.g. XBox).
revenue model.
Microsoft´s revenue model synergiesMicrosoft´s direct and indirect revenue
business model
company that started business to many other areas. Google´s revenue in 2010 was 29 billion US Dollars, mainly from broker
What Google does successfully Google has more products and services than just advertising and search. Let us have a look at the busness model. We start with the products/services offered and the business model archetype.
Besides of Google´s main business as a broker, pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet.Google is mainly focused on inventing products for the like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business models Physical Lessor, IP Lessor and Contractor.
systems and content of books.
Google´s revenue models
This overview is limited to large sources of Google revenue. revenue at Google is from their broker business, which we will analyze in a little more detail below.
Microsoft´s revenue models As mentioned above, the main source of revenue is the ecosystem of partners(computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and dat
crosoft has revenue coming from SaaS (Windows Live) and from a
Microsoft´s revenue model synergies Microsoft´s direct and indirect revenue allows Microsoft for their a
that started in the search and advertising businessGoogle´s revenue in 2010 was 29 billion US Dollars, mainly from broker
is matchmaking between advertisers and potential customers. But services than just advertising and search. Let us have a look at the bus
ness model. We start with the products/services offered and the business model archetype.Besides of Google´s main business as a broker,
pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet.Google is mainly focused on inventing products for the like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business models Physical Lessor, IP Lessor and Contractor.
systems and content of books.
This overview is limited to large sources of Google revenue. revenue at Google is from their broker business, which we will analyze in a little more detail below.
As mentioned above, the main source of revenue is the ecosystem of partners(computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and dat
crosoft has revenue coming from SaaS (Windows Live) and from a
allows Microsoft for their a
in the search and advertising businessGoogle´s revenue in 2010 was 29 billion US Dollars, mainly from broker
is matchmaking between advertisers and potential customers. But services than just advertising and search. Let us have a look at the bus
ness model. We start with the products/services offered and the business model archetype.Besides of Google´s main business as a broker, Google is a manufacturer of
pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet.Google is mainly focused on inventing products for the broker business and for other SaaS offerings like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business models Physical Lessor, IP Lessor and Contractor. In addition,
This overview is limited to large sources of Google revenue. As mentioned above, the main source of revenue at Google is from their broker business, which we will analyze in a little more detail below.
As mentioned above, the main source of revenue is the ecosystem of partners(computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and dat
crosoft has revenue coming from SaaS (Windows Live) and from a
allows Microsoft for their activities in the SaaS and other new
in the search and advertising businessGoogle´s revenue in 2010 was 29 billion US Dollars, mainly from broker
is matchmaking between advertisers and potential customers. But services than just advertising and search. Let us have a look at the bus
ness model. We start with the products/services offered and the business model archetype.Google is a manufacturer of
pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet.
broker business and for other SaaS offerings like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business
In addition, Google acts as a IP Lessor for browser,
As mentioned above, the main source of revenue at Google is from their broker business, which we will analyze in a little more detail below.
As mentioned above, the main source of revenue is the ecosystem of partners. Many hardware vendors (computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and dat
crosoft has revenue coming from SaaS (Windows Live) and from a
ctivities in the SaaS and other new
in the search and advertising business and has extended its Google´s revenue in 2010 was 29 billion US Dollars, mainly from broker
is matchmaking between advertisers and potential customers. But services than just advertising and search. Let us have a look at the bus
ness model. We start with the products/services offered and the business model archetype.Google is a manufacturer of the Google Search
pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are companies, that should use the search appliance for searching their intranet. Inventor business at
broker business and for other SaaS offerings like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business
Google acts as a IP Lessor for browser,
As mentioned above, the main source of revenue at Google is from their broker business, which we will analyze in a little more detail below.
. Many hardware vendors (computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and many SaaS and SaaP software vendors base their solutions on Microsoft operating systems and data-
crosoft has revenue coming from SaaS (Windows Live) and from ap-
ctivities in the SaaS and other new
and has extended its Google´s revenue in 2010 was 29 billion US Dollars, mainly from broker
is matchmaking between advertisers and potential customers. But services than just advertising and search. Let us have a look at the busi-
ness model. We start with the products/services offered and the business model archetype. Google Search Ap-
pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are Inventor business at
broker business and for other SaaS offerings like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business
Google acts as a IP Lessor for browser,
As mentioned above, the main source of revenue at Google is from their broker business, which we will analyze in a little more detail below.
. Many hardware vendors (computers, cell phones, cars) are delivering Microsoft operating systems as part of their offerings and
a-p-
ctivities in the SaaS and other new
and has extended its Google´s revenue in 2010 was 29 billion US Dollars, mainly from broker
is matchmaking between advertisers and potential customers. But i-
p-pliance, which is a hardware appliance that includes Google´s Search Engine. Target customers are
Inventor business at broker business and for other SaaS offerings
like Google Apps, Gmail or Google Voice. The SaaS offerings are created by combining the business Google acts as a IP Lessor for browser,
As mentioned above, the main source of
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
85
Fig. 9: Google
Now let us have a look at Google´s revenue modelthere usually is a compensation for every product and service, not necessarily as a payment. In Google´s case the nonIn Fig. 10tomers and a PPC (Pay per clickthe PPC advertising service is payment per click on an advertisement. The for the search service is data about the user
Fig. 10: Google
5.3.2 Google´s revenue model synergiesThis business model has two striking advantages: The information about the search customers is prvided to Google for freeformation, to advtween the search and advertising business. the sunk cost and operations cost of offerings like Gmail and others.
Google revenue models
Now let us have a look at Google´s revenue modelthere usually is a compensation for every product and service, not necessarily as a payment. In Google´s case the non-
10 you can see that Google´s search business basically provides a search service to search cutomers and a PPC (Pay per clickthe PPC advertising service is payment per click on an advertisement. The for the search service is data about the user
Google services and revenue
Google´s revenue model synergiesThis business model has two striking advantages: The information about the search customers is prvided to Google for freeformation, to advertisers via an automatic online auction.tween the search and advertising business. the sunk cost and operations cost of offerings like Gmail and others.
models
Now let us have a look at Google´s revenue modelthere usually is a compensation for every product and service, not necessarily as a payment. In
-monetary compensation you can see that Google´s search business basically provides a search service to search cu
tomers and a PPC (Pay per click) advertising service to its advertising customthe PPC advertising service is payment per click on an advertisement. The for the search service is data about the user
services and revenue streams
Google´s revenue model synergiesThis business model has two striking advantages: The information about the search customers is prvided to Google for free and Google sells advertising space, perfectly matched with the customer i
ertisers via an automatic online auction.tween the search and advertising business. the sunk cost and operations cost of offerings like Gmail and others.
Now let us have a look at Google´s revenue modelthere usually is a compensation for every product and service, not necessarily as a payment. In
monetary compensation foryou can see that Google´s search business basically provides a search service to search cu
) advertising service to its advertising customthe PPC advertising service is payment per click on an advertisement. The for the search service is data about the user who is searching.
streams.
Google´s revenue model synergies This business model has two striking advantages: The information about the search customers is pr
Google sells advertising space, perfectly matched with the customer iertisers via an automatic online auction.
tween the search and advertising business. The revenue generated in the broker business is used to carry the sunk cost and operations cost of offerings like Gmail and others.
Now let us have a look at Google´s revenue model for the broker businessthere usually is a compensation for every product and service, not necessarily as a payment. In
for their search offering is the key to Google´s fortune.you can see that Google´s search business basically provides a search service to search cu
) advertising service to its advertising customthe PPC advertising service is payment per click on an advertisement. The
is searching.
This business model has two striking advantages: The information about the search customers is prGoogle sells advertising space, perfectly matched with the customer i
ertisers via an automatic online auction. So Google leverages a revenue synergy bThe revenue generated in the broker business is used to carry
the sunk cost and operations cost of offerings like Gmail and others.
for the broker businessthere usually is a compensation for every product and service, not necessarily as a payment. In
search offering is the key to Google´s fortune.you can see that Google´s search business basically provides a search service to search cu
) advertising service to its advertising customthe PPC advertising service is payment per click on an advertisement. The non
This business model has two striking advantages: The information about the search customers is prGoogle sells advertising space, perfectly matched with the customer i
So Google leverages a revenue synergy bThe revenue generated in the broker business is used to carry
the sunk cost and operations cost of offerings like Gmail and others.
for the broker business. As you may remember, there usually is a compensation for every product and service, not necessarily as a payment. In
search offering is the key to Google´s fortune.you can see that Google´s search business basically provides a search service to search cu
) advertising service to its advertising customers. The compensation for non-monetary
This business model has two striking advantages: The information about the search customers is prGoogle sells advertising space, perfectly matched with the customer i
So Google leverages a revenue synergy bThe revenue generated in the broker business is used to carry
. As you may remember, there usually is a compensation for every product and service, not necessarily as a payment. In
search offering is the key to Google´s fortune.you can see that Google´s search business basically provides a search service to search cus-
ers. The compensation for monetary compensation
This business model has two striking advantages: The information about the search customers is pro-Google sells advertising space, perfectly matched with the customer in-
So Google leverages a revenue synergy be-The revenue generated in the broker business is used to carry
. As you may remember, there usually is a compensation for every product and service, not necessarily as a payment. In
search offering is the key to Google´s fortune. s-
ers. The compensation for compensation
o-n-e-
The revenue generated in the broker business is used to carry
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
86
6 Comparison of the three
Software companies design models to create competitive advantage and to tion, they try to lemodels.
Fig. 11: Comparison of the three
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the similarities that all three vendors do tions. But here, again, they also show differences in the target customers. While Microsoft and Google are mainly
An interesting view on the three companies is how they leverage their customer and partner ecosytem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, while its partner ecosystem is still not a significant source of reveecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
7 Summary
This article structure of business models nies in the software industrytion. Insights provided
Software specific chracteristics.panies in the software ecosystem.
Hybrid the specific characteristics of hybrid business models tors. But that differentiecosystem.
Comparison of the three
Software companies design models to create competitive advantage and to tion, they try to leverage synergies
Comparison of the three
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the similarities that all three vendors do tions. But here, again, they also show differences in the target customers. While Microsoft and Google are mainly focused on consumers, SAP is mainly focused on businesses as customers.
teresting view on the three companies is how they leverage their customer and partner ecosytem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, while its partner ecosystem is still not a significant source of reveecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
Summary
This article has outlined structure of business models
in the software industry. Insights provided
Software companies specific characteristics and the combination of them creates a hybrid business model with special chracteristics. Related to panies in the software ecosystem.
ybrid business models the specific characteristics of hybrid business models
But that differentiecosystem.
Comparison of the three
Software companies design and frequently change models to create competitive advantage and to
verage synergies
Comparison of the three revenue
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the similarities that all three vendors do tions. But here, again, they also show differences in the target customers. While Microsoft and Google
focused on consumers, SAP is mainly focused on businesses as customers.teresting view on the three companies is how they leverage their customer and partner ecosy
tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, while its partner ecosystem is still not a significant source of reveecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
outlined a classification of businessstructure of business models as well as
in the software industry showing similarities and differences in their status quo and future dire here are:
companies usually have hybrid business modelsracteristics and the combination of them creates a hybrid business model with special chRelated to software ecosystems, there has to be a fit of business models between the co
panies in the software ecosystem. models might differ between
the specific characteristics of hybrid business models But that differentiation between companies m
Comparison of the three revenue models
and frequently change models to create competitive advantage and to adapt to a
verage synergies Figure 11 shows similarities and differences
revenue models.
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the similarities that all three vendors do follow a common trend in the software industry to offer SaaS soltions. But here, again, they also show differences in the target customers. While Microsoft and Google
focused on consumers, SAP is mainly focused on businesses as customers.teresting view on the three companies is how they leverage their customer and partner ecosy
tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, while its partner ecosystem is still not a significant source of reveecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
a classification of businessas well as revenue models. showing similarities and differences in their status quo and future dire
have hybrid business modelsracteristics and the combination of them creates a hybrid business model with special ch
software ecosystems, there has to be a fit of business models between the co
differ between the specific characteristics of hybrid business models
tion between companies m
models
and frequently change their business models and corresponding revenue adapt to a changing business environment
shows similarities and differences
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the
follow a common trend in the software industry to offer SaaS soltions. But here, again, they also show differences in the target customers. While Microsoft and Google
focused on consumers, SAP is mainly focused on businesses as customers.teresting view on the three companies is how they leverage their customer and partner ecosy
tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, while its partner ecosystem is still not a significant source of reveecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
a classification of business and revenuerevenue models. These were applied
showing similarities and differences in their status quo and future dire
have hybrid business models. Each of the business patterns used has its racteristics and the combination of them creates a hybrid business model with special ch
software ecosystems, there has to be a fit of business models between the co
software vendorsthe specific characteristics of hybrid business models might be used to differentiate from the compet
tion between companies might also pave the way for a symbiosis in a software
their business models and corresponding revenue changing business environment
shows similarities and differences
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the
follow a common trend in the software industry to offer SaaS soltions. But here, again, they also show differences in the target customers. While Microsoft and Google
focused on consumers, SAP is mainly focused on businesses as customers.teresting view on the three companies is how they leverage their customer and partner ecosy
tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, while its partner ecosystem is still not a significant source of revenue. Microsoft leverages its partner ecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
and revenue models of software companiesThese were applied
showing similarities and differences in their status quo and future dire
Each of the business patterns used has its racteristics and the combination of them creates a hybrid business model with special ch
software ecosystems, there has to be a fit of business models between the co
software vendors to create competitive advantmight be used to differentiate from the compet
ight also pave the way for a symbiosis in a software
their business models and corresponding revenue changing business environment
shows similarities and differences of the three business
While SAP and Microsoft both are currently focused on software as a product, they showdifferences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the
follow a common trend in the software industry to offer SaaS soltions. But here, again, they also show differences in the target customers. While Microsoft and Google
focused on consumers, SAP is mainly focused on businesses as customers. teresting view on the three companies is how they leverage their customer and partner ecosy
tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business, nue. Microsoft leverages its partner
ecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
of software companiesThese were applied to three successful comp
showing similarities and differences in their status quo and future dire
Each of the business patterns used has its racteristics and the combination of them creates a hybrid business model with special ch
software ecosystems, there has to be a fit of business models between the co
to create competitive advantmight be used to differentiate from the compet
ight also pave the way for a symbiosis in a software
their business models and corresponding revenue changing business environment [9]. In addi-
of the three business
While SAP and Microsoft both are currently focused on software as a product, they show significant differences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the
follow a common trend in the software industry to offer SaaS solu-tions. But here, again, they also show differences in the target customers. While Microsoft and Google
teresting view on the three companies is how they leverage their customer and partner ecosys-tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business,
nue. Microsoft leverages its partner ecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in contrast, leverages the customer and partner ecosystem to massively subsidize new businesses.
of software companies and a three successful compa-
showing similarities and differences in their status quo and future direc-
Each of the business patterns used has its racteristics and the combination of them creates a hybrid business model with special cha-
software ecosystems, there has to be a fit of business models between the com-
to create competitive advantage. So might be used to differentiate from the competi-
ight also pave the way for a symbiosis in a software
their business models and corresponding revenue i-
of the three business
significant differences in their revenue models and main target customers. Google in contrast, is focused on its main broker business model and has advertising as main source of revenue. It is interesting to see the
u-tions. But here, again, they also show differences in the target customers. While Microsoft and Google
s-tem. SAP mainly uses revenue from its customer ecosystem to fund innovations and new business,
nue. Microsoft leverages its partner ecosystem to create most of its revenue to fund innovations and to subsidize new business. Google, in
a a-c-
Each of the business patterns used has its a-
m-
o i-
ight also pave the way for a symbiosis in a software
Eds: Jansen, Bosch, Ahmed, and Campell Proceedings of the Workshop on Software Ecosystems 2011
87
Software vendors usually have hybrid revenue models. The structure of revenue models with their combination of revenue streams, often containing one or more non-monetary compensations, can be a source of competitive advantage in a business model. Related to software ecosystems, there are two aspects. One is, that there might be revenue models specific to the software ecosystem like software ecosystem fees or revenue shares. The other is, that
Revenue models can be used to fund business patterns or businesses that are not connected by cau-sality. This funding might be used to create competitive advantage, e.g. by establishing lower pricing for other revenue streams. It might also be used to subsidize the software ecosystem, e.g. by donations of a commercial software vendor to the open source community.
Overall, it was proposed that creation of competitive advantage is possible in business and revenue models. It is obvious that this paper only shows an initial view of the subject and further detail research is warranted. Topics of interest for that research might be profitability of different business patterns, new combinations of hybrid business models and hybrid revenue models based on additional software companies analyzed and matching of business and revenue models of different companies in a software ecosystem.
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