Slide 1: Transaction Cost Economics in Software Ecosystems
Wilco van Duinkerken - Utrecht University wilco@sparkboxx.com - June 19th 2009
Slide 2: Did you ever ask yourself one of the following questions?
Slide 3: Should I write a software component myself or buy/use it from somebody else?
Slide 4: I’m using an open source component, when do I start contributing?
Slide 5: What are the “hidden” costs of using external components?
Slide 6: How can I limit the costs and risks of using external components?
Slide 7: How to govern the relationships with my component providers?
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
Slide 8: 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 proof (yet) of TCE in the product
software industry
Slide 9: The Basics
• • •
You can do/ produce something internally (yourself) or buy it from the market One can buy “from the market” using different governance modes The governance modes differ in the amount of control, flexibility and costs
Slide 10: Governance modes
• • • • • • •
Markets Hierarchies Short term contract Long term contract Service Level Agreements Open Source License Open Source Contribution
• • • • •
Alliance Joint Venture Master Service Agreement (Raamwerkovereenkomst) SaaS (webservice) Partial Ownership (buy shares)
Slide 11: The governance modes differ in the amount of control, flexibility and costs
Slide 12: A governance mode is chosen based on transaction costs
Slide 13: Transaction Costs
• Are determined by three factors • Asset Specificity: How specific (and • Recurrence: How often does the
transaction occur. important) is the product or service you are buying.
• Uncertainty: Internal, external and
behavioral uncertainty.
Slide 14: Governance mode determination by transaction costs
Asset Specificity Low
Uncertainty
High Neo-classical Contract (Collaborating) Relational contract internal governance
Low High
Classical Contract (non-collaborating)
occasional recurrent Recurrence Hierarchy Coordination Market Coordination
Slide 15: I want to answer the question:
• Can Transaction Cost Economics be applied
to explain the governance structure of relationships between buyers and suppliers of software components in Software Ecosystems?
Slide 16: I would like to:
1. Have a group discussion about: What are transaction costs of software components? 2. Have individual interviews on: How do you choose which component to use? and How to govern the relationship with the supplier of this component?
Slide 17: Planning
•
Group Discussion:
•
• • • • • •
when: The first week of July (date to be set) where: Utrecht University (Beleidslab) how long will it take me? ± 90 minutes
Individual interviews: when: Somewhere in July where: Anywhere how long will it take me? ± 60 minutes
Slide 18: Can I Participate in Both the group and Individual sessions?
Yes, you can :-)
Slide 19: What’s in it for me?
1. You will receive a print and/or electronic version of my thesis. 2. You will gain some insight in your company relations and possible ways of improving these relations. 3. I’m willing to give a presentation about the subject at your company when my thesis is finished.
Slide 20: Want to participate?
• Please contact me: • E-mail: wilco@sparkboxx.com • Twitter: @sparkboxx • LinkedIn: http://www.linkedin.com/in/
wilcovd
Slide 21: More sources
• Download my thesis so far • View a summary of my thesis research at
http://prezi.com/90808/
