Apple's iPod

How software changed the world

A new book looks into the impact of the software platform revolution on the business world.

by HBS Working Knowledge
Last Updated: 23 Jul 2013

Andrei Hagiu, co-author of Invisble Engines, says that software platforms such as Linux, the Mac OS and Windows have 'fueled innovation and improved productivity'. He says there are some key management traits needed for those who make their living from software platforms.

These are: being able to attract third-party producers who can build the most valuable innovations; knowing how to manage the 'ecosystem' (deciding the correct balance between quantity and quality, knowing when to compete and when to collaborate, for instance); knowing how to manage the physical design and scope of the platforms; and being able to spot competitive threats early on, especially in adjacent industries.

Hagiu says that in his view in an environment where there is an 'explosion'  in the number of digital music services (download and/or subscription), Apple should open up iTunes and devolve more control to music publishers which would improve the variety. This would make it the eBay of digital music.

In the future, Hagiu says, software platforms will continue to cross industry boundaries such as the auto industry. The platforms that can span the widest range of functionalities and markets and those that provide the best content (games, music, movies) will be the winners. The losers will be those that provide a bricks-and-mortar product or service that can be digitised such as newspapers.

HBS Working Knowledge
How Software Platforms Revolutionise Business
Sean Silverstone
Review by Morice Mendoza

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