October 2008

"Keystones can increase ecosystem productivity by simplifying the complex task of connecting network participants to one another or by making the creation of new products by third parties more efficient."

Marco Iansiti and Roy Levien

The TIM Lecture Series provides a forum that promotes the exchange of knowledge between university research and technology company executives and entrepreneurs. Readers outside the Ottawa area who are unable to attend the lectures in person are invited to view upcoming lectures in the series either through voice conferencing or webcast.

On September 3, 2008, Mike Milinkovich, Executive Director of the Eclipse Foundation, delivered a presentation entitled "A Practitioners Guide to Ecosystem Development". This lecture for the TIM Lecture Series introduced the fundamental concepts of ecosystems and how the Eclipse Foundation matches the theory. This report provides the key messages from the lecture.

Ecosystem Best Practices

The Eclipse Foundation is a not-for-profit organization which is globally known for its success in creating and nurturing a multi-billion dollar, worldwide ecosystem model that spans hundreds of companies and thousands of products. Yet, this achievement was mostly accomplished in blissful ignorance of business ecosystem theory, providing a working example of where theory does not match the Eclipse Foundation's experience. [Editor's note: see the Recommended Resources section at the end of this article for some theoretical references.] In this section of the lecture, Mike introduced those ecosystem concepts which proved successful within the Eclipse ecosystem.

The key component to an ecosystem is the platform foundation. In the case of Eclipse, this is a software development platform comprised of extensible frameworks, tools and runtimes for building, deploying and managing software across the lifecycle. The keystone--in this case, the Eclipse Foundation--needs to evolve the platform. This is always a tricky balancing act as predictability is key to the rapid adoption of an evolving platform. Surprisingly, a flexible platform creates more value than one where all the details were planned. Modularity needs to be designed into the ecosystem's platform foundation, allowing for the creation of niches which in turn uniquely allows complementors to participate in platform development. Niche creation is important for ecosystem growth.

There are other factors which influence the success of an ecoystem. Transparency and openness provide a level playing field and encourage companies to join the ecosystem. Having a non-profit as the keystone is important, but the non-profit has to be capable of selling the business value of joining the ecosystem. Open source is a particularly powerful technique for establishing and rapidly growing ecosystems. Value is created by linking people to other people within an ecosystem and across ecosystems. How to better engage consumers is the next learning stage for ecosystems.

How to measure the health of an ecosystem is an emerging science and we need to create tools to measure ecosystem health. The components so far defined as being necessary to the design of a healthy ecosystem are: i) transparent intellectual property regime; ii) strong leadership and governance; iii) platform foundation that evolves; iv) architecture of niches; v) global reach mechanism; vi) orchestrators; vii) mechanisms to improve health of ecosystem, and viii) business outreach such as strategic selling. However health is measured, the health of an ecosystem is more important than, and not necessarily related to, its size.

Other ecosystems lessons learned included:

  • many still don't understand business ecosystems and confuse supply chains with ecosystems
  • ecosystems are much more effective than vertical supply chains in innovation driven industries
  • the provincial and federal governments do not understand open source or ecosystems
  • you win by letting go
  • even the keystone can't control an ecosystem
  • the vision may die if champions leave the ecosystem
  • don't attempt to predict winners; instead, enable the creation of niches

Eclipse Ecosystem

This section provided insight into how the Eclipse ecosystem works. Eclipse began as a rewrite of IBM's proprietary VisualAge for Java which was strategically released as open source in order to gain market share for the Java IDE. This strategy has succeeded in that several competing products, such as Borland's J Builder, are now built with Eclipse. It is hard to say if Eclipse would have been as successful if it had been launched by a small company instead of being launched by IBM. Sun isn't involved in the Eclipse ecosystem as it is perceived as an IBM strategy to remove Sun's control of Java.

The Eclipse platform is suitable for both B2C and B2B. Further, the Eclipse Public License (EPL) is a copyleft license which is less viral than the GPL, making it attractive to many companies. Most companies that make money with Eclipse wrap their products (for example, Lotus Notes) around Eclipse, though some companies ship a product that expects Eclipse to be pre-installed.

One challenge faced by the Eclipse Foundation is how to quantify the user base. To gauge the size of the ecosystem, the last version of Eclipse shipped with an opt-in data collector and Eclipse staffers use social networking tools such as Facebook and Linkedin. The Eclipse Foundation would like to make users more sticky so that new users don't just download once and never return or become contributors to the ecosystem.

Another challenge is the annoyance caused by complementors' changes that break the platform. The Eclipse Foundation does not manage this as the negative feedback from the rest of the ecosystem generally encourages the problem to be quickly fixed. There have been discussions about a certification program for Eclipse components, but this will probably never gain concensus as many large companies provide their own certification and some companies would fail the certification process.

Open Source

The final section discussed the role of open source within a business ecoystem. The natural affinity can be seen with the view that open source is as much a business phenomenon as it is a social phenomenon. Partners entering an ecosystem still have to move up the open source maturity model one step at a time.

While standards bodies differ from ecosystems, open source is complementary to standards organizations as it speeds up the adoption of the standard. The increasing trend towards the transparency embodied in open source means that standards bodies who lack transparency are a dying breed.

Mike concluded the lecture with a discussion on the types of contributions that occur within the Eclipse ecosystem. Most of the contributions are from commercial entities. Of the contributions classified as individual (i.e. non-corporate), many of these contributors are paid by a company whose corporate policy prohibits using a work email on a public mailing list. A small percentage of individual contributors aren't paid by a company and building their own reputation is a key motivator for contributing. Sadly, the percentage of government contributions is very low. There are some EU funded projects, but no projects are directly funded by the US or Canadian governments. Academic contributions are also low; a notable exception is Mylyn which came out of a thesis from the University of British Columbia.

Recommended Resources

Business Ecosystem as the New Approach to Complex Adaptive Business Environments

Digital Business Ecosystems

Business Ecosystem: A Conceptual Model Of An Organisation Population From The Perspectives Of Complexity And Evolution

Ecosystem Strategy: Keystones and Dominators

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