The document discusses the goals of software vendors for partner ecosystems from a practitioner's perspective. It outlines financial goals like monetizing the ecosystem and saving costs. Product goals include strengthening market presence and offerings by filling gaps. Network effect goals are to maximize ecosystem gravity and retention by increasing incentives and lock-in. The summary focuses on the high-level goals of software vendors for their partner ecosystems.

1. Goals of software vendors for
partner ecosystems
– a practitioner´s view
Dr. Karl Popp
Corporate Development
SAP AG
karl.michael.popp@sap.com
http://www.drkarlpopp.com
Copyright © 2010 Dr. Karl Popp

2. Background information
http://www.drkarlpopp.com/BusinessMod
Business Models elsintheSoftwareindustry.html
in the software industry
Profit from Software
Ecosystems
ISBN-13: 978-3842300514
Business Models, partnership
models and ecosystems in the
software industry
Examples from over 50
software companies
Copyright © 2010 Dr. Karl Popp

3. Definitions
• An economic ecosystem is a set of
companies that exchange products or
services to serve a common goal or to
achieve higher levels of individual goals.
• A software ecosystem is an economic
ecosystem that forms around a software
vendor
Copyright © 2010 Dr. Karl Popp

4. Software Ecosystem
Software
Acquisition Partners
Targets
Software
Suppliers Customers
vendor
Open
Source
Comm. System
Integrators
Copyright © 2010 Dr. Karl Popp

5. Software Ecosystem
Software
Acquisition Partners
Targets
Software
Suppliers Customers
vendor
Open
Source
Comm. System
Integrators
Products,
Assets or
Payments
Services
Copyright © 2010 Dr. Karl Popp

6. Types of Ecosystems
Software
Acquisition Partners
Targets
Software
Suppliers Customers
vendor
Customer
Open Ecosystem
Source
Comm. System
Integrators Focus of this
presentation
Supplier Partner
Ecosystem Ecosystem
Copyright © 2010 Dr. Karl Popp

7. Financial goals
• Monetize on the partner ecosystem
– Increase existing or create new revenue
streams
– E.g. by letting partners sell products or by
charging fees for certification
• Save cost
– Lower cost of development, support,
maintenance, education, marketing
– E.g. by outsourcing tasks to partners like
support, maintenance, sales, training
Copyright © 2010 Dr. Karl Popp

8. Revenue streams (examples)
Software
Partners
Software License Customers
vendor revenues
Revenue
streams
Copyright © 2010 Dr. Karl Popp

9. Product related goals
• Strengthen market presence
– Diversified partnership strategies for regional
and local markets
• Strengthen software vendor´s offerings
– Partners fill whitespaces and provide
complementing solutions
• Innovate and co-innovate solutions
– A sound innovation strategy of a software
vendor contains a mix of internal and external
innovation.
Copyright © 2010 Dr. Karl Popp

10. Network effect related goals
• Maximize ecosystem gravity
– Hypothesis: increasing the number of
participants in the ecosystem attracts even
more new members for the ecosystem.
• Maximize retention of participants in
the ecosystem
– Retention of participants in the ecosystem is
based on two important factors: incentives
and lock-in.
Copyright © 2010 Dr. Karl Popp

11. Summary
• Software vendors define goals for their
partner ecosystems
• Software vendors engage in win-win
partnerships that create revenue and save
cost
• Software vendors plan for and leverage
network effects in partner ecosystems
Copyright © 2010 Dr. Karl Popp

12. Background information
http://www.drkarlpopp.com/BusinessMod
Business Models elsintheSoftwareindustry.html
in the software industry
Profit from Software
Ecosystems
ISBN-13: 978-3842300514
Business Models, partnership
models and ecosystems in the
software industry
Examples from over 50
software companies
Copyright © 2010 Dr. Karl Popp

13. Video lessons
• Get your education online at
mindbites.com:
• http://www.mindbites.com/lesson/13903-
software-business-model-basics
• http://www.mindbites.com/lesson/13904-
software-revenue-models
Copyright © 2010 Dr. Karl Popp