Transaction Cost Economics in Software Ecosystems

Transcription

1 Transaction Cost Economics in Software Ecosystems By: Wilco van Duinkerken Website:

2 Thesis Introduction Governance Transaction Cost Theory My Thesis Research Question for the Audience Discussion

3 Software Ecosystem Apple Samsung (screens) Advertisers Billing System Real Estate Agents Server Monitoring US HuizenKanaal.tv Ticketing System Rails Plugin Providers Plugin Providers Plugin Providers SuperMarkets Database Provider 2 Database Provider 1 Internet Provider Other Locations Webserver Hosting Providers Hosting Providers Hosting Providers Operating system Information Suppliers Information Suppliers Information Suppliers

4 Even a small software vendor has a lot of relationships Imagine the complex network of a large or multinational software vendor

5 How to govern these relationships? m-w: gov ern (\ˈgə-vərn\) : a) to control, direct, or strongly influence the actions and conduct of b) to exert a determining or guiding influence in or over <income must govern expenditure> c) to hold in check : restrain

6 Governance structures Markets Hierarchies Short term contract Long term contract Service Level Agreements Open Source License Alliance Joint Venture Master Service Agreement (Raamwerkovereenkomst) SaaS (webservice) Partial Ownership (buy shares) Open Source Contribution

7 Transaction Cost Economics Initiated by Coase, 1937 Defined by Williamson, 1971 and going strong Researched in the fields of a.o. Human Assets, Procurement, Oil & Gas, Electricity, Music Industry and Outsourcing Little empirical research of TCE in IT No empirical research of TCT in SECOs

8 TCE Basics You can do/ produce something internally (yourself) or buy it from the market One can buy off the market using different governance modes The governance modes differ in the amount of control, flexibility and costs

9 Markets, Hybrids and Hierarchy Markets Hybrids Hierarchy License fee SLA Internal Development Open Source Component Adaption of Open Source Open Source Contribution Joint Ventures Alliances

10 TCE Foundations Studies Single transactions (although they might recur) TCE is a comparative undertaking Is First-order economizing, focussing on getting the basics right instead of arguing about nifty details Assumes that people are subject to bounded rationality and will act opportunistic every now and then

11 Downside comparison Markets Less control Possible opportunistic behavior You have to negotiate a price / contract Internal Bureaucratic Less Efficient Slower

12 Transaction Costs The costs of overcoming the downsides

13 Transaction Costs Are determined by three factors Asset Specificity: How specific (and/ or important) is the product or service you are buying Uncertainty: Internal, external and behavioral Recurrence: How often does the transaction occur

14 Asset Specificity

15 Uncertainty External Uncertainty or Statistic Risk Internal Uncertainty: arises from lack of communication, that is from one decision maker having no way of finding out the concurrent decisions and plans made by the others Behavioral Uncertainty

16 Uncertainty and Asset Specificity

17 Recurrence The periodicity with which a transaction recurs.

18 Governance mode determination by transaction costs Asset Specificity Low High Uncertainty Low High Classical Contract (non-collaborating) Neo-classical Contract (Collaborating) Relational contract internal governance occasional recurrent Recurrence Hierarchy Coordination Market Coordination

19 Empirical Evidence of TCT TCT is not always supported, though in general it is. A lot of flaws in empirical research results caused by proxy measurements Production differences are often ignored Almost no research in IT TCE Empirical evidence gets a lot of a attention

20 Research Question Can Transaction Cost Theory be applied to explain the governance structure of relationships between buyers and suppliers of software components and services in Software Ecosystems?

21 Research Model

22 Sub Questions Which governance structures can be seen in Software Ecosystems? How to adapt the Transaction Cost Theory concepts to Software Ecosystems? How do the governance structures in Software Ecosystems map to the Transaction Cost Economics governance structures? How to translate the classic concept of Asset Specificity to Software Ecosystems? How to translate the classic concept of Recurrence to Software Ecosystems? How to translate the classic concept of Uncertainty to Software Ecosystems? How to translate the classic concept of Production Costs to Software Ecosystems?

23 Research Method Unit of analysis: Software Component or Service Case studies at 3-5 companies investigating both the strategic/ managerial and technical decisions

24 Scope and Detail Level Apple Samsung (screens) Advertisers Billing System Real Estate Agents Server Monitoring US HuizenKanaal.tv Ticketing System Rails Plugin Providers Plugin Providers Plugin Providers SuperMarkets Database Provider 2 Database Provider 1 Internet Provider Other Locations Webserver Hosting Providers Hosting Providers Hosting Providers Operating system Information Suppliers Information Suppliers Information Suppliers

25 Scope and Detail Level Apple Samsung (screens) Advertisers Billing System Real Estate Agents Server Monitoring US HuizenKanaal.tv Ticketing System Rails Plugin Providers Plugin Providers Plugin Providers SuperMarkets Database Provider 2 Database Provider 1 Internet Provider Other Locations Webserver Hosting Providers Hosting Providers Hosting Providers Operating system Information Suppliers Information Suppliers Information Suppliers

26 Scope and Detail Level Java Requires, Includes Drivers WebServices Complete software packages... Ruby Requires, Includes Gems Rails plugins Rack Middleware...

27 Planning and Progress Literature study: done Research model: almost done Case studies: may-june Analysis of the results: July, August, September Wrapping up: September, October

28 In search of a modeling method

29 Questions?

30 References Check out sparkboxx/final-thesis.html or download the PDF directly at svn1.hosted-projects.com/sparkboxx/thesis/ thesis.pdf