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An Analysis of Dynamic Strategies during the Lifecycle

of Software Ecosystems

Rodolfo Vasconcelos C. L. de Andrade Carina Frota Alves

George Augusto Valença Santos

• A set of interacting businesses that work as a unit – Common goals

– Customer demands

– Customer base

– Shared costs, risks and knowledge

• A decentralized approach for software supply activities

• Ecosystem Health: comprised by Productivity, Niche Creation and Robustness.

• Roles: Keystone, Niche Player and Dominator.

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Software Ecosystems (SECOs)

• Warren proposes a framework – Dynamic Resource System View of Strategy (DRSV) - to explore companies performance throughout time adopting a visual approach.

• He highlights the importance of company resources as performance boosters.

• His proposal is highly concerned with business sustainability (long-term profitability). 3

Strategy Dynamics by Warren

• A model that makes use of concepts from Business Ecosystems as well as biological analogies to evaluate ecosystem performance through SECO Health.

• The model focuses on strategic issues. DRSV serves as a conceptual basis for the model. – Sustainable advantage

– Strategy communication

– Dynamic and temporal

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The Dynamic Strategies for Software Ecosystems (DS-SECO) model

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The DS-SECO model

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The phases of the DS-SECO model

• Represent the performance of SECO health elements.

• Use ecosystem stages as time scale.

• Graphs should be reviewed at each iteration.

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Phase 1 - Time-Path Definition

• Resources identification – Main relevant resources for the SECO must be identified to form the

resources list

– Example: expertise on mobile development, capital availability, a solid platform (provided by the keystone), etc.

• Resources flow analysis – Identify key forces and exogenous items that influence resources flow.

• Example of key forces: investments, mutualism, etc.

• Exogenous items: biological concepts – emergence, competition, etc.

• How resources, key forces and exogenous items relate to each other in terms of resources gain or losses?

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Phase 2 – Resources Identification and Phase 3 – Resources Flow Analysis

• Dynamic questions

– Based on time-paths and on resources flow analysis, the three basic dynamic questions (why, where, how) shall be answered for each health element.

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Phase 4 - Dynamic Questions

• Strategy assessment

– Business model, orchestration techniques, demand estimation, architectural issues, environmental analysis

– Based on the answers to dynamic questions.

– Changes in strategy may be needed to guarantee sustainable performance

– The outcomes of changes will be reassessed in the next iteration

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Phase 5 - Strategy Assessment

• In the beginning of birth, strategic definitions must be made

• The DS-SECO phases shall be executed at the end of each stage

• During self-renewal, the phases will be executed several times

• As a SECO leader, the keystone is committed for model application 11

How to apply the model

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The iPhone SECO

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Self-renewal – main facts

• iOS 4 with multitasking support and iOS 5 with iCloud

• Android as a threatening competitor

• iPhone 4 as the “thinnest smartphone at that time”

• iPhone 4S

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Self-renewal Phase 1 – time-path definition

• Resources list

– Potential user base

– Capital

– Know-how on mobile market

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Self-renewal Phase 2 – resources identification

• Key Forces

– Investments on R&D

– Investments on marketing

– Mutualistic partnerships

– Market differentials on iPhone

– Customer loyalty

• Exogenous items

– Emergence

– Competition

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Self-renewal Phase 3 – resources flow analysis

• fo

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Self-renewal Phase 4 – dynamic questions

Productivity Robustness Niche creation

Why

question

• Relevant launches led to high

productivity: iOS 4, iOS 5,

iPhone 4, iPhone 4S, iAD

• Application development was

highly active

• Despite competition,

iPhone still had a vast

potential user base;

• Mutualist partnerships

were strong among

SECO participants

• Hardware and software

improvements boosted niche

creation;

• The rising number of

downloads on Apple Store

also boosted niche creation;

• iPhone sales were motivating

Where

question

• New versions of iOS and

iPhone are expected for

defending against competition

• New applications are

expected at Apple Store

• Trend: productivity on the top

• Customer loyalty,

cooperations and capital

tend to provide the

SECO with very high

robustness.

• Users’ passion for iPhone

reinforces the potential

profitability of the SECO;

• Apple capacity to lead

innovations generates several

business opportunities

How

question

• Innovations on iPhone, iOS

and application development

must be maintained;

• iPhone superiority must

be sustained. The

Android SECO became

a real threat;

• The passion for iPhone

cannot wilt. For that,

investments on R&D and

marketing are paramount;

• The SECO needs to remain

attractive for niche players.

• Apple managed to orchestrate the SECO efficiently

• Hardware and software improvements were crucial for the SECO

• People around the world remained passionate about iPhone

• Competition became a feared threat posed mainly by the Android SECO

• Sustaining the innovation pace and monitoring competition was paramount so far and became mandatory

• iPhone value as unique cannot be lost

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Self-renewal Phase 5 – strategy assessment

• Contributions provided by this work – Gathering SECO state-of-the-art and literature on Business Ecosystems for a

better understanding of SECOs

– Integration with topics from Management

– The proposal of the DS-SECO to address open problems in the business perspective of SECOs

• Main limitations of this research – The difficulties in obtaining data directly from Apple

– The model was not empirically validated

– The Mystrategy tool simulation was not explored

• Future work – Empirical studies in several software domains

– Exploring deeply the simulation functionality of the Mystrategy tool

– Adding technical issues in addition to strategic ones to the DS-SECO model

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Conclusions

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“We think too much and feel too little. More than

machinery, we need humanity.

More than cleverness, we need kindness and gentleness”

Charles Chaplin