The disruptive effect of digital business models is already visible, ranging from exponential growth to fast extinction. To succeed in digital business, organizations need much wider capabilities than conventional enterprise applications offerings. For example, a heavy manufacturer may need a solution consisting of embedded sensors within industrial equipment, software to aggregate and manage the data, storage and processing of large amounts of data, and data delivery to customers securely through a subscription service.
Technology providers, regardless of size, cannot accommodate technological complexity and rapid pace of innovation solely with the traditional make or buy options: they have to leverage the power of ecosystems.
In the enterprise applications space, ecosystems are not new. Software vendors (such as SAP, Oracle and Salesforce) have long created global networks of independent software vendors (ISVs) and consulting providers to complement their suite offerings. However, just offering a marketplace for partner applications and services is not sufficient to form an effective ecosystem. A technology provider can orchestrate an ecosystem by assuming the following responsibilities:
- Attract and recruit complementary partners.
- Define integration routes and provide relevant technologies and standards.
- Ensure customer-facing consistency without cannibalizing the core product roadmap and go-to-market model.
- Drive faster monetization.
In the just released note “Digital Business Redefines Application Software Ecosystems“, together with colleagues Stephen Crawford, Robert P. Anderson, Rajesh Kandaswamy, Alys Woodward and John Santoro, we look at how the advent of the digital business and cloud technologies has created more ways for technology providers to orchestrate and participate in enterprise applications ecosystems.
These ecosystems follow four archetypes:
- The Cloud Platform-led ecosystem: Orchestrated through use of common infrastructure.
- The Application Suite-led ecosystem: Orchestrated through a suite containing most of the solution features.
- The Experience-led ecosystem: Orchestrated through the definition of expected experiences across use cases and user personas.
- The Industry-led ecosystem: Orchestrated through jointly defined business requirements by industry members seeking standards-based interoperability.
The reference of each ecosystem to the four archetypes and its composition of participants will not be written in stone. Orchestrators may change priorities related to the ecosystem definition or capabilities they need from their participants.
Ecosystems adoption by enterprise applications buyers is still fairly limited, with the focus being still on custom applications and integration to fill in their digital platform gaps. We plan to do further research on this topic from a buyer perspective, related to the potential and challenges of the various technology provider ecosystems towards more effective and timely digital transformation. Meanwhile, I would love to hear your views as to the extent you are currently leveraging enterprise applications ecosystems in your own organizations and digital transformation roadmaps.