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Invisible Engines: How Software Platforms Drive Innovation and Transform Industries

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Author Info

  • David S. Evans

    ()
    (LECG LLC)

  • Andrei Hagiu

    ()
    (Harvard Business School)

  • Richard Schmalensee

    ()
    (MIT Sloan School of Management)

Abstract

Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution--a revolution that will change both new and old industries. The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits. Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

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Bibliographic Info

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This book is provided by The MIT Press in its series MIT Press Books with number 0262050854 and published in 2006.

Volume: 1
Edition: 1
ISBN: 0-262-05085-4
Handle: RePEc:mtp:titles:0262050854

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Web page: http://mitpress.mit.edu

Related research

Keywords: software platforms; internet; communications;

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Cited by:
  1. Rahul Basole & Jürgen Karla, 2011. "On the Evolution of Mobile Platform Ecosystem Structure and Strategy," Business & Information Systems Engineering, Springer, vol. 3(5), pages 313-322, October.
  2. David S. Evans & Richard Schmalensee, 2013. "The Antitrust Analysis of Multi-Sided Platform Businesses," NBER Working Papers 18783, National Bureau of Economic Research, Inc.
  3. Weyl, E. Glen, 2008. "Monopolies in Two-Sided Markets: Comparative Statics and Identification," Department of Economics, Working Paper Series qt69c9c56z, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. Ansari, Shahzad & Garud, Raghu, 2009. "Inter-generational transitions in socio-technical systems: The case of mobile communications," Research Policy, Elsevier, vol. 38(2), pages 382-392, March.
  5. Muge Ozman, 2008. "The Two Faces of Open Innovation: NetworkExternalities and Learning," Working Papers of BETA 2008-24, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  6. Christoph Burkard & Thomas Widjaja & Peter Buxmann, 2012. "Software Ecosystems," Business & Information Systems Engineering, Springer, vol. 4(1), pages 41-44, February.
  7. Kevin J. Boudreau & Andrei Hagiu, 2008. "Platform Rules: Multi-Sided Platforms as Regulators," Harvard Business School Working Papers 09-061, Harvard Business School.
  8. AlvinE. Roth, 2008. "What Have We Learned from Market Design?," Economic Journal, Royal Economic Society, vol. 118(527), pages 285-310, 03.
  9. Claire M. Weiller & Michael G. Pollitt, 2013. "Platform Markets and Energy Services," Cambridge Working Papers in Economics 1361, Faculty of Economics, University of Cambridge.
  10. Graça, Jorge, 2011. "The Blessings of Vintage: Exploring Technological Change made by Users of Discontinued Home Video Games Hardware," Spatial and Organizational Dynamics Discussion Papers 2011-8, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.
  11. Ahn, Illtae & Shin, Ilsoon, 2010. "On the optimal level of protection in DRM," Information Economics and Policy, Elsevier, vol. 22(4), pages 341-353, December.
  12. Elizabeth J. Altman & Mary Tripsas, . "Product to Platform Transitions: Organizational Identity Implications," Harvard Business School Working Papers 14-045, Harvard Business School.
  13. Tim COWEN & Annabelle GAWER, 2012. "Competition in the Cloud: Unleashing Investment and Innovation Within and Across Platforms," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(85), pages 45-62, 1st quart.
  14. Gauguier, Jean-Jacques, 2009. "L’industrialisation de l’Open Source," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/4388 edited by Toledano, Joëlle.

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