Platform Ecosystems: Aligning Architecture, Governance, and Strategy
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Platform Ecosystems is a hands-on guide that offers a complete roadmap for designing and orchestrating vibrant software platform ecosystems. Unlike software products that are managed, the evolution of ecosystems and their myriad participants must be orchestrated through a thoughtful alignment of architecture and governance. Whether you are an IT professional or a general manager, you will benefit from this book because platform strategy here lies at the intersection of software architecture and business strategy. It offers actionable tools to develop your own platform strategy, backed by original research, tangible metrics, rich data, and cases. You will learn how architectural choices create organically-evolvable, vibrant ecosystems. You will also learn to apply state-of-the-art research in software engineering, strategy, and evolutionary biology to leverage ecosystem dynamics unique to platforms. Read this book to learn how to:
- Evolve software products and services into vibrant platform ecosystems
- Orchestrate platform architecture and governance to sustain competitive advantage
- Govern platform evolution using a powerful 3-dimensional framework
If you’re ready to transform platform strategy from newspaper gossip and business school theory to real-world competitive advantage, start right here!
- Understand how architecture and strategy are inseparably intertwined in platform ecosystems
- Architect future-proof platforms and apps and amplify these choices through governance
- Evolve platforms, apps, and entire ecosystems into vibrant successes and spot platform opportunities in almost any―not just IT―industry
Well-partitioned architecture decomposes the platform and apps into relatively autonomous subsystems (A, not B). 1 Transaction costs are simply the overhead costs of doing a trade in the open market between two parties that might not have the same interests. They have a long tradition in the history of economics (see Baldwin, 2008; Williamson, 1987, 1991, 1999, 2010) and technology strategy (see Ang and Straub, 1998; Tiwana and Bush, 2007; Young-Ybarra and Wiersema, 1999). 5.3 The Two.
Application logic. The second function is the core work performed by the application that is distinctive to it. This encompasses the functionality of the app that makes it uniquely valuable to its end-users. For example, a video conferencing app’s core application logic is the video streaming between two client devices. 86 CHAPTER 5 Platform Architecture 1 Presentation Logic 2 Application Logic 3 Data Access Logic 4 Data Storage FIGURE 5.9 The four pieces of an app’s internal functionality.
Usually much higher than those for more monolithic platform architectures. 2. Technical performance takes a hit. Modular architectures pay a modularization performance tax. The modular decomposition of a platform’s ecosystem might split functionality that should have belonged in a single system instead of being split across many subsystems. The increased need for communication among these subsystems can decrease the overall technical performance of the ecosystem. It is usually not possible to.
The actual revenue need not directly be recouped from the end-user; it can be recouped from a third side (e.g., an advertiser) on a multisided platform. These three pricing strategies can directly be linked to free versus paid apps common in contemporary mobile app stores. The free model is a usage-based license subsidized by advertising. It generates an ongoing stream of revenue for the app developer, unlike the paid model that typically generates revenue from a one-time sale. 6.3 ALIGNING.
Decisions by platform owners impact several of the ecosystem evolution principles over the life of a platform. Table 6.7 provides a preview of these. The next section explains these ideas in depth. Table 6.6 Summary of Considerations in Aligning Platform Pricing Pricing Decision Business Model Lifecycle Architecture Pricing symmetry? Asymmetric if two-sided from outset and dependent on cross-side network effects Asymmetric if first mover advantage can be secured through network effects or.