Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar


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Choose the Best Approaches to Outside Innovation

If you look internationally, the numbers are even more surprising. In Asia, 31 of 36 unicorns are platforms, or about 86 percent.

This includes China, where 81 percent of 21 unicorns are platforms, and India, where 8 of 9 are platforms. In other words, the average linear unicorn is valued at a little more than half of comparable platform companies. Not surprisingly, platform businesses also have most of the funding raised by these unicorn startups. To top it off, platforms also got more favorable terms from investors.


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Obviously, not all of these unicorn companies will survive. But the trends in both public and private markets show that platform businesses are quickly overtaking linear companies.

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In particular, the huge shift toward platforms among unicorn startups suggests that the next wave of large public companies worldwide will be mostly platforms. A platform ultimately enables this value creation by facilitating transactions. It is the process that turns potential connections into transactions.

The four steps of the core transaction. The challenge is a unique one: how to get potentially millions of people to behave the way you want them to. The four functions of the platform business model.

First you must attract users to join, then you aid them by matching them together, providing the technology to facilitate the transaction and establishing the rules that govern the network in order to build trust and maintain quality. These are the f our core functions of a platform :.

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For more on platforms, read Modern Monopolies. If a platform handles these four functions well enough, it will be able to facilitate its core transaction and, hopefully, a lot of it. While all platforms share the same underlying business model, not all platforms are the same. Figuring out which platform type a business fits into should always be one of the first steps in designing a platform.

For further information on platform types, read more here. Exchange Platforms vs. Maker Platforms : Exchange platforms faciliate direct, connections.

Platform Business Model – Definition | What is it? | Explanation

Free and open-source operating systems such as Linux and descendants of BSD are widely utilized today, powering millions of servers , desktops , smartphones e. Android , and other devices. The free-software movement and the open-source software movement are online social movements behind widespread production and adoption of FOSS. FOSS free and open-source software allows the user to inspect the source code and provides a high level of control of the software's functions compared to proprietary software.

Although there is almost a complete overlap between free-software licenses and open-source-software licenses, there is a strong philosophical disagreement between the advocates of these two positions. As the Free Software Foundation FSF explains the philosophical difference between free software and open-source software : "The two terms describe almost the same category of software, but they stand for views based on fundamentally different values. Open-source is a development methodology; free software is a social movement.

For the free-software movement, free software is an ethical imperative, essential respect for the users' freedom. The earliest-known publication of the definition of his free-software idea was in the February edition [12] of the FSF's now-discontinued GNU's Bulletin publication. The canonical source for the document is in the philosophy section of the GNU Project website.

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As of August , it is published there in 40 languages. The open-source-software definition is used by the Open Source Initiative OSI to determine whether a software license qualifies for the organization's insignia for Open-source software. In the s through the s, it was common for computer users to have the source code for all programs they used, and the permission and ability to modify it for their own use.

Software , including source code, was commonly shared by individuals who used computers, often as public domain software. By the late s, the prevailing business model around software was changing. A growing and evolving software industry was competing with the hardware manufacturer's bundled software products; rather than funding software development from hardware revenue, these new companies were selling software directly.

Leased machines required software support while providing no revenue for software, and some customers who were able to better meet their own needs did not want the costs of software bundled with hardware product costs. In United States vs. IBM , filed January 17, , the government charged that bundled software was anticompetitive. In the s and early s, some parts of the software industry began using technical measures such as distributing only binary copies of computer programs to prevent computer users from being able to use reverse engineering techniques to study and customize software they had paid for.

In , the copyright law was extended to computer programs in the United States [24] —previously, computer programs could be considered ideas, procedures, methods, systems, and processes, which are not copyrightable. Early on, closed-source software was uncommon until the mids to the s, when IBM implemented in an "object code only" policy, no longer distributing source code. In , Richard Stallman , longtime member of the hacker community at the MIT Artificial Intelligence Laboratory , announced the GNU project , saying that he had become frustrated with the effects of the change in culture of the computer industry and its users.

The manifesto included significant explanation of the GNU philosophy, Free Software Definition and " copyleft " ideas. The FSF takes the position that the fundamental issue Free software addresses is an ethical one—to ensure software users can exercise what it calls " The Four Essential Freedoms ". The Linux kernel , created by Linus Torvalds , was released as freely modifiable source code in Initially, Linux was not released under either a Free software or an Open-source software license.

However, with version 0. BSDi lawsuit was settled out of court in In , Eric Raymond published The Cathedral and the Bazaar , a reflective analysis of the hacker community and Free software principles. The paper received significant attention in early , and was one factor in motivating Netscape Communications Corporation to release their popular Netscape Communicator Internet suite as Free software. This code is today better known as Mozilla Firefox and Thunderbird. Netscape's act prompted Raymond and others to look into how to bring the FSF's Free software ideas and perceived benefits to the commercial software industry.

They concluded that FSF's social activism was not appealing to companies like Netscape, and looked for a way to rebrand the Free software movement to emphasize the business potential of sharing and collaborating on software source code.

The new name they chose was "Open-source", and quickly Bruce Perens , publisher Tim O'Reilly , Linus Torvalds , and others signed on to the rebranding. The Open Source Initiative was founded in February to encourage the use of the new term and evangelize open-source principles. While the Open Source Initiative sought to encourage the use of the new term and evangelize the principles it adhered to, commercial software vendors found themselves increasingly threatened by the concept of freely distributed software and universal access to an application's source code.

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A Microsoft executive publicly stated in that "Open-source is an intellectual property destroyer. I can't imagine something that could be worse than this for the software business and the intellectual-property business. Users of FOSS benefit from the Four Essential Freedoms to make unrestricted use of, and to study, copy, modify, and redistribute such software with or without modification.

Manufacturers of proprietary, closed-source software are sometimes pressured to building in backdoors or other covert, undesired features into their software. FOSS is often free of charge although donations are often encouraged. This also allows users to better test and compare software. FOSS allows for better collaboration among various parties and individuals with the goal of developing the most efficient software for its users or use-cases while proprietary software is typically meant to generate profits.

Furthermore, in many cases more organizations and individuals contribute to such projects than to proprietary software. According to Linus's Law the more people who can see and test a set of code, the more likely any flaws will be caught and fixed quickly. However, this does not guarantee a high level of participation. Having a grouping of full-time professionals behind a commercial product can in some cases be superior to FOSS.

Furthermore, publicized source code might make it easier for hackers to find vulnerabilities in it and write exploits. This however assumes that such malicious hackers are more effective than white hat hackers which responsibly disclose or help fix the vulnerabilities, that no code leaks or exfiltrations occur and that reverse engineering of proprietary code is a hindrance of significance for malicious hackers.

Sometimes, FOSS is not compatible with proprietary hardware or specific software. While FOSS can be superior to proprietary equivalents in terms of software features and stability, in many cases FOSS has more unfixed bugs and missing features when compared to similar commercial software.


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Furthermore, unlike with typical commercial software missing features and bugfixes can be implemented by any party that has the relevant motivation, time and skill to do so. As the FOSS operating system distributions of Linux has a lower market share of end users there are also fewer applications available. In , the European Commission stated that "EU institutions should become open source software users themselves, even more than they already are" and listed open source software as one of the nine key drivers of innovation, together with big data , mobility, cloud computing and the internet of things.

While copyright is the primary legal mechanism that FOSS authors use to ensure license compliance for their software, other mechanisms such as legislation, patents, and trademarks have implications as well. On the other hand, the adoption of the new GPL version was heavily discussed in the FOSS ecosystem, [88] several projects decided against upgrading.

He also criticizes notebook manufacturers for optimizing their own products only privately or creating workarounds instead of helping fix the actual causes of the many issues with Linux on notebooks such as the unnecessary power consumption. Mergers have affected major open-source software. Oracle in turn purchased Sun in January, , acquiring their copyrights, patents, and trademarks.

Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar
Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar Business Model Innovation in Software Product Industry: Bringing Business to the Bazaar

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