carnegie mellon university ©2006 - 2008 robert t. monroe 45- 827 technology ecosystems -- and –...

Carnegie Mellon University ©2006 - 2008 Robert T. Monroe 45-827

Technology Ecosystems -- and –

Packaging Software-Driven Capabilities

High-Tech Product Innovation

Robert Monroe

April 15, 2008


Overview

For a given product P, P’s technology ecosystem encompasses the set of technologies and technology products (both existing and anticipated over P’s lifetime) with which P needs to co-exist, integrate, or build upon.

- Bob Monroe

The technology ecosystem concept provides additional context for refining a product idea.


Understanding The Tech Ecosystem Is Important

• Almost all high-tech products rely on and leverage other technologies– A powers of 10 analysis is applicable here– Many software intensive products provide a substantial portion

of their value through their interaction and integration with other software intensive products and systems

• Examples:– RFID, ERP, and enterprise logistics systems– iPod, iTunes, QuickTime, and personal computers (Mac or PC)– GPS receivers, satellite communications, atomic clocks, GIS– Web servers, web browsers, routers, DNS, firewalls, HTTP, …


Static Analysis of Technology Ecosystems


Technology Ecosystem Chart

Inputs- Types of inputs- Software and hardware packages providing those inputs- Standard data types and formats that you will accept

Outputs- Type of outputs- Software and hardware packages receiving those outputs- Standard data types and formats that you will output

ProductConcept

Non-technical constraintson technology options

- patents- regulations

- competitive chokepoints

Technology infrastructure- Explore components available for incorporation into your solution - What should you buy instead of build? - Is what you want to buy available? Under what licensing terms?- Identify hardware and software platforms on which your solution will run - What hardware and software will your customers have to provide? - OS, databases, CAD systems, …?- Identify hardware and software systems with which you need to peacefully coexist - OS, database, CAD tools, other common software that your customers will use?


Static Analysis Framework (I)

For each key stakeholder, identify:– How do I anticipate he or she will use the product?

– What technologies are they likely to already have in place and use that are relevant to the operation of the new product P?

• To provide inputs to P?

• To use output from P?

• To use at the same time as, but independent from, P?

• That they will want to run P on?

– Are these technologies:• open or proprietary?

• easily extended or closed?

• freely available, licensable, or unavailable?


Static Analysis Framework (II)

• Identify non-technical constraints that materially limit your ability to create or use technologies – patents, regulations, proprietary API’s, etc.

• Your answers to these questions should help you fill out the ecosystem chart– … and raise many questions, probably more than they answer


Quick Technology Ecosystem Exercise

Complete the static analysis framework for a navigation system that incorporates real-time traffic information to help drivers find their way and also avoid traffic jams, accidents (of other drivers), closed roadways, detours, speed traps, etc.


Dynamic Analysis of Technology Ecosystems


The Technology Ecosystem is Dynamic

• Computational technologies change– Sometimes very quickly (consumer electronics, mash-ups)

– Sometimes moderately quickly (video game consoles, cell phones, operating systems)

– Sometimes very slowly (satellite-based systems, GPS, etc.)

• Static ecosystem analysis is a good starting point– … but not sufficient to make big bets

• Full ecosystem analysis requires making educated guesses about future technology directions


Technology Adoption Curves: Moore’s Chasm

Source: Scott Ambler, Crossing The Chasm Dr. Dobb’s Journal (online), May 4, 2006http://www.ddj.com/dept/architect/187200223


Technology Adoption Curves: Cumulative Penetration

Source: Wikipedia media commons - Technology Diffusion


Technology Adoption Curves: Gartner Hype Cycle

Source: Gartner Corp., via AYE conference website:http://www.ayeconference.com/wiki/scribble.cgi?read=HypeCycle


Technology Adoption Curves: Gartner Example (05)

Source: Gartner Corp., via BBC website:http://news.bbc.co.uk/1/hi/technology/3577746.stm#graphic


Technology Adoption Curves: Gartner Example (07)

Source: Gartner Corp., via Guardian UK website:http://blogs.guardian.co.uk/technology/authors/bobbie_johnson/index.html


Dynamic Analysis

• Will your product live in a fast, medium, or slow changing tech ecosystem?

• Identify the technologies in your static ecosystem that are:– Likely to change significantly during your product’s lifetime– Likely to change at a significantly different rate than your product– Going to be critical to the success of your product– At a significantly different point on the adoption or hype curves

• Determine whether you need to change your assumptions or strategy accordingly

• Dynamic analysis takes a lot more (educated) guesswork than static analysis


Some Key Decisions

• Do I need to make big bets on specific platforms and complementary technologies?– Is there a more flexible approach that is cost and revenue-

effective?

• Is there a single dominant player in the tech ecosystem that I need to ‘partner’ with or should I stay agnostic and try to work with everybody?

• Do I design for what is available today, or where I expect the market will be in the future?– Repeat this question for multiple time horizons


Tech Ecosystem Exercise


Quick Review: Product Opportunity Gap

• Over the past decade consumers have become more dependent on web-based retailers and service providers.

• To prevent fraud, web retailers and service providers need to authenticate that the customer making a purchase is who he or she claims to be.

• The standard way that web providers authenticate customers is requiring a userid and password to login.

• Consumers now need to manage many different passwords for many different sites, creating a hassle for consumers and a security problem for both consumers and web-based businesses.


Early Conceptualization Example

• Provide a small keychain-sized device that stores userid and passwords for user-selected websites. – Device stores userid/password combos that it provides to the

browser on the computer to which it is connected.

– Device can connect to computer using bluetooth, IR, or USB.

– Userid/Passwords stored in an encrypted format on the device

– Fingerprint is required to decrypt device contents or send userid/password combo to browser


Mid-Fidelity Conceptualization

Example user scenario:• Mary uses three different online financial services – credit card, checking, and

brokerage. • She uses different password/id combos at each one to improve security but she has a

hard time remembering them. • When she sits down to pay her bills and reconcile her accounts each month she sets her

key-chain id next to her computer and presses her thumb on the thumbprint pad. • Her thumbpress turns the device on, which sends a bluetooth signal to her pc. • The software on her pc recognizes the signal and alerts her browser to query the device

whenever a login screen pops-up. • The device provides the userid/password for each of her online financial sites• After 15 minutes without a query from the pc, the device turns itself off

Example flowchart:

Fingerprint unlocksdevice

Login screen recognizedUserid/pwd sent to browser

Banking application acceptsuserid/pwd, access granted


Today’s Exercise: Tech Ecosystem Analysis

• Complete an initial ecosystem analysis for the following product concept to address the password management opportunity identified previously– Static analysis initially

– Dynamic analysis, time permitting

• For this exercise, these are high-level, broad assessments– Focus on understanding and identifying the key technologies

that populate the ecosystem and their role in that ecosystem

– Raising lots of questions is a good thing at this stage


Packaging Software-Driven Capabilities


Packaging High-Tech Innovations Is Not About…

• Selecting the box…

• Designing the hardware enclosure…

• Choosing colors…

• …


Packaging High-Tech Innovations Is About

• Determining the best way to deliver your innovative solution to your target customers

• Understanding how to turn your innovative idea into a profitable, sustainable, and defensible business

• Fitting your solution smoothly into your customers’ technology ecosystems – … or creating a new and better ecosystem for them


Basic Packaging Approaches

• Complete System

• Component

• Service

• Hybrid


Packaging Innovation As A Complete System

• Provide a complete end-to-end solution for your customers

• Advantages:– Simplicity for customers

– Holistic design opportunity

• Disadvantages– More expensive to design/produce

– All-or-nothing purchase decision

• When is this approach likely to succeed?

• When is it unlikely to succeed?


Packaging Innovation As A Component

• Package your solution as a component that needs to be incorporated into other products or systems to provide its value

• OEM-targeted components

• End-user components

• When is this approach likely to succeed?

• When is it unlikely to succeed?


Packaging Innovation As A Service

• Provide your solution as a service– Generally over the web– Ubiquitous networking and web standards

make this an increasingly attractive option

• Advantages:– Simplicity for customers– Smoother, more predictable revenue model

• Disadvantages– You need to provide the infrastructure– Customer security and privacy concerns

• When is this approach likely to succeed?• When is it unlikely to succeed?


This Is Not A Discrete Decision

• A system at one power of ten is a component at the next

• The same software code base can be packaged as a standalone system, a component for integration with other systems, a service, or any combination of these– … but the cost to support multiple packaging models can be high– Why? What are some of the cost drivers in supporting multiple

packaging models?


Hybrid Models

• Many successful high-tech offerings are packaged as a hybrid of system, components, and services

• Benefits:– Broadens the market

– Recurring revenue stream(s)

– Multiple revenue streams

– Hedges your bets

• Drawbacks– Added development cost and complexity

– It is very difficult to create a business that is great both at creating products and providing services


Discussion Questions


Packaging Analysis in Phase I and Phase II

• Phase I: Think broadly – Look for broad technology shifts that might make a new packaging

of an old idea an appealing offering (SET analysis)

– Observe target customers tech ecosystem

– No decisions at this point on packaging

• Phase II: Look, Listen, Learn– Understand target customers tech ecosystem

– Understand technology need/savvy/ability of target customers

– No decisions at this point on packaging but start to generate hypotheses about how you different packaging alternatives might work for target customers

– No decisions at this point on packaging


Key Packaging Decisions For Phase III

• Pick a path: System, Component, Service, or Hybrid?

• Work within customers technology ecosystem or create a new one?

– If within an existing ecosystem:• How will your solution fit in?

• With what will your solution need to interact?

– If creating a new ecosystem• Identify all the things you will need to make the ecosystem a success

• Evaluate whether this is really feasible


Key Packaging Decisions For Phase IV

• Reaffirm system, component, service, or hybrid decision

• Prototype to confirm that your approach fits in target ecosystem

• Confirm that this packaging makes sense to your customers

• If building a new ecosystem, figure out:– What you will provide

– What you will try to recruit others to provide

– … and how you are going to get them to do so

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