Software Business

Although software startups are considered important for economic development due to their ability to quickly create cutting-edge technologies and their potential to scale to a wide market, contextual knowledge about the product idea development process of startups is poorly understood in the literature. This study explores the idea validation process of software startups in an attempt to understand the practices used for idea validation, discover how the process is affected by the founder’s prior competencies, and determine the effect of those practices on requirement gathering. We conducted an exploratory multiple case study in nine software startups to determine the kind of practices they used for idea validation. We identified ten practices used as elements of the idea validation process. Our results show that idea validation is a highly non-linear process in which several validation practices are used in varying combinations and timing. The most frequently used practices included copying existing products, prototyping, utilizing expert support, and cooperating closely with customers. The founder’s prior competencies also influenced the selected practices. Copying and prototyping were common practices when the founders had prior competencies in the application area, while utilizing expert support was a widespread practice to compensate for the founder’s missing competencies. We also observed that the idea validation practices identified in the study serve requirement gathering at different levels of abstraction, varying from business-related requirements down to design-level requirements.

Innovation activities provide considerable challenges to small firms due to resource constraints. Conversely, large, established firms are often forced to buy technologies to remain innovative. This paper investigates the interplay of these two aspects in a specific software-based startup context. Based on structured interviews, the paper analyses what characteristics of startups and small firms and resources accessed through networking determine acquisition likelihoods and growth. This addresses a gap in the literature, namely understanding better the dual role of venture capital, specifically with regard to the type of innovation pursued by small firms and in its interplay with other determinants of growth and acquisition.

The ambivalent paradigm Internet of Things (IoT) is gaining importance in today’s industries. To manage the various devices built on different technologies and to apply complex event-triggered business rules to the data streams, platforms are necessary tools for almost all use cases. In the recent years, hundreds of vendors entered the intransparent IoT platform market, from small startups focusing on niches, to large enterprise vendors offering professional solutions. These platforms need tools to orchestrate the interactions between the different sides involved, so-called platform governance mechanisms. The purpose of this multiple case study analysis is to explore the platform governance mechanisms applied in IoT platforms. To achieve this goal, we explored the governance concepts of eight selected platforms in a multiple case study analysis, resulting in a description of the important aspects and differences regarding platform governance. Moreover, the four main trade-offs that platform vendors must be aware of are subsequently discussed. In a last step, an evaluation and discussion of the contribution to theory and practice is provided.

Mobile computing and the Internet of Things promises massive amounts of data for big data analytic and machine learning. A data sharing economy is needed to make that data available for companies that wish to develop smart systems and services. While digital markets for trading data are emerging, there is no consolidated understanding of how to price data products and thus offer data vendors incentives for sharing data. This paper uses a combined keyword search and snowballing approach to systematically review the literature on the pricing of data products that are to be offered on marketplaces. The results give insights into the maturity and character of data pricing. They enable practitioners to select a pricing approach suitable for their situation and researchers to extend and mature data pricing as a topic.

A board of directors is a supreme organism of a modern company. Often, a single board member has a place in several companies’ management teams. This is called a board interlock and its impact on a single board member, companies and the economics on the whole has been studied for decades. However, there is a lack of understanding how software companies’ board of directors interlock as the field is driven by knowledge and relations more heavily than the other fields. Therefore, well-connected board members could be a vital competitive advantage for companies. This study presents a quantitative analysis of 262 Finnish software companies, their boards and performance. The results show that neither high board interlocks nor foreign board members are remarkably related on the performance of companies. The implications of the findings are discussed and future research inquiries are proposed.

This paper proposes an approach for modeling and analyzing strategic complementarity in software businesses. The primary research objective is to develop an approach for representing and reasoning about synergistic value creation in software enterprises and ecosystems. This agenda is based on the increasing importance of complementarity as a concern within software organizations and their networks. It recognizes the prevalence of coopetition, as a common practice, in the software industry where businesses cooperate and compete simultaneously in open source communities, standards-setting bodies, and software ecosystems. It focuses on complementarity since it is a critical motivator for coopetition among software businesses. This study offers an approach for comparing alternate combinations of software products for assessing their abilities for synergy creation with reference to the concept of added value. It evaluates the sufficiency of this approach by applying it to an industrial case study from management literature. It also identifies a direction for future research for this line of inquiry.

Business modeling is becoming a foundational process in the information technology industry. Many ICT companies are constructing their business models to stay competitive on the cutting edge of the technology world. However, when comes to new technologies or emerging markets, it remains difficult for the decision maker to make an assertive choice. This paper aims to fill this gap by providing organizations with an overall approach to better design and develop business models in an innovative ICT market. The business model canvas is used to analyze existing players in the market. Moreover, a case study is made of Software Defined Networking (SDN): a business model template for SDN is proposed as a representation tool to bridge the business concept and the SDN functionalities. The models and methods are evaluated and enhanced by interviewing experts from key players in the SDN market. In addition, the method is applied to a case organization for further evaluation, which indicates that an average satisfaction score of 0.77 out of 1 to the model. Therefore, the approach of creating new business models in innovative ICT market in this paper is found to be appropriate and effective in analyzing existing SDN providers and reusing their business components of activities into a new SDN strategy.

Much research that analyzes the evolution of a software ecosystem is confined to its own boundaries. Evidence shows, however, that software ecosystems co-evolve independently with other software ecosystems. In other words, understanding the evolution of a software ecosystem requires an especially astute awareness of its competitive landscape and much consideration for other software ecosystems in related markets. A software ecosystem does not evolve in insulation but with other software ecosystems. In this research, we analyzed the OpenStack software ecosystem with a focal perspective that attempted to understand its evolution as a function of other software ecosystems. We attempted to understand and explain the evolution of OpenStack in relation to other software ecosystems in the cloud computing market. Our findings add to theoretical knowledge in software ecosystems by identifying and discussing seven different mechanisms by which software ecosystems mutually influence each other: sedimentation and embeddedness of business relationships, strategic management of the portfolio of business relationships, firms values and reputation as a partner, core technological architecture, design of the APIs, competitive replication of functionality and multi-homing. Research addressing the evolution of software ecosystem should, therefore, acknowledge that software ecosystems entangle with other software ecosystems in multiple ways, even with competing ones. A rigorous analysis of the evolution of a software ecosystem should not be solely confined to its inner boundaries.

Current methods for measuring open source software ecosystem health are unable to measure the health of young software ecosystems, due to a lack of data. This paper proposes a new method for measuring software ecosystem health. By using a mixed method design with interviews as the primary data source, a health measurement can be performed on data scarce ecosystems. This is applied to ResearchKit, Apple’s SDK to create applications for medical research. The case study shows that the ResearchKit ecosystem is threatened by the outbound links of the third-party software developers. These developers intend to create web-based applications as ResearchKit suffers from a selection bias that makes it unsuitable for most medical research. The interviews exposed an inherent problem that is unrelated to ecosystem size and may not have been found in a traditional health measurement.

Software firms participate in an ecosystem as a part of their innovation strategy to extend value creation beyond the firm’s boundary. Participation in an open and independent environment also implies the competition among firms with similar business models and targeted markets. Hence, firms need to consider potential opportunities and challenges upfront. This study explores how software firms interact with others in OSS ecosystems from a coopetition perspective. We performed a quantitative and qualitative analysis of three OSS projects. Finding shows that software firms emphasize the co-creation of common value and partly react to the potential competitiveness on OSS ecosystems. Six themes about coopetition were identified, including spanning gatekeepers, securing communication, open-core sourcing and filtering shared code. Our work contributes to software engineering research with a rich description of coopetition in OSS ecosystems. Moreover, we also come up with several implications for software firms in pursing a harmony participation in OSS ecosystems.

This paper studies security policies of the Android and iOS software ecosystems. These platforms have experienced security issues since their public release in 2007. This research creates an overview of the results that security issues cause and the actions available to limit security infractions based on scientific literature. Following the overview, this paper attempts to explain premises of those issues by analyzing the security recommendations of both platforms and comparing them to OWASP security guidelines. This is done by comparing development guidelines set up by both platforms and assessing the importance of each of these guidelines in the ecosystem perspective. The conclusion highlights vulnerabilities in the developer guidelines of mobile platforms and recommends appropriate action to improve the situation.

From having been exclusive for companies in the online domain, feature experiments are becoming increasingly important for software-intensive companies also in other domains. Today, companies run experiments, such as e.g. A/B tests, to optimize product performance and to learn about user behaviors, as well as to guide product development and innovation. However, although experimentation with customers has become an effective mechanism to improve products and increase revenue, companies struggle with how to leverage the results of the experiments they run. In this paper, we study the reasons for this and we identify three key challenges that make feature experimentation a difficult task. Our research reveals the following challenges: (1) the impact of experiments doesn’t scale, (2) business KPIs and team level metrics are not aligned and (3) it is unclear if the available solutions are applicable across domains.

Practitioners on the area of mobile application development usually rely on set of app-related success factors, the majority of which are directly related to their economical/business profit (e.g., number of downloads, or the in-app purchases revenue). However, gathering also the user-related success factors, that explain the reasons why users choose, download, and install apps as well as the user-related failure factors that explain the reasons why users delete apps, might help practitioners understand how to improve the market impact of their apps. The objectives were to: identify (i) the reasons why users choose and installing mobile apps from app stores; (ii) the reasons why users uninstall the apps. A questionnaire-based survey involving 121 users from 26 different countries was conducted.

Software product evolution by means of improving their architecture, tools, or development methodologies are rather common in the lifetime of a software product. Especially if the product is in the domain of engineering where some of the basic calculation principles were established in some cases more than 50 years ago. However, a radical change of software products to evolve both in the software engineering as much as the organizational and business aspects in a disruptive manner are rather rare.

In this paper, we report on the transformation of one of the market leader product series in water-related calculation and modeling from a traditional business-as-usual series of products to an evolutionary software ecosystem. We do so by relying on existing concepts on software ecosystem analysis to analyze the future ecosystem. We report and elaborate on the main focus points necessary for this transition. We argue for the generalization of our focus points to the transition from traditional business-as-usual software products to software ecosystems.

Software startups face with multiple technical and business challenges, which could make the startup journey longer, or even become a failure. Little is known about entrepreneurial decision making as a direct force to startup development outcome. In this study, we attempted to apply a behavior theory of entrepreneurial firms to understand the root-cause of some software startup’s challenges. Six common challenges related to prototyping and product development in twenty software startups were identified. We found the behavior theory as a useful theoretical lens to explain the technical challenges. Software startups search for local optimal solutions, emphasize on short-run feedback rather than long-run strategies, which results in vague prototype planning, paradox of demonstration and evolving throw-away prototypes. The finding implies that effectual entrepreneurial processes might require a more suitable product development approach than the current state-of-practice.

Software producing organizations are contributing increasingly to open source software, by making their software open source or contributing to existing projects. Platform leaders contribute to open source software in different manners, but for whose interests are these companies contributing to open source software? Are contributions made by software developers as part of a software vendor or do these software producing organizations want to do what is right without benefits? So how do platform leaders contribute to open source software? By analyzing the data from GitHub repositories, the contributions to open source software by three platform leaders is researched in two dimensions, how are the developers connected and to which projects do these developers contribute. By analyzing their connectedness and analyzing the developed projects, the conclusion is drawn that contributions are made for the strategic advantage of the software producing organizations. The majority of the contributions made to open source software is to their own projects and by developers who contribute to these projects full-time.