BY JAMES COOKE, EDITOR AT LARGE
techwatch
it’s not a jungle out there—
it’s an ecosystem
FOR MOST OF US, THE TERM “ECOSYSTEM” CONJURES UP
images of forests and jungles teeming with animals and plant life. But
a number of experts contend that ecosystems are emerging in the supply chain software world as well, and that this could affect how logistics and supply chain managers buy and use software applications.
The concept was first put forward by David G. Messerschmitt and
Clemens Szyperski in their 2003 book Software Ecosystem. They used
the term to describe a community of companies that work together
to sell sundry applications based on a common platform, like those
developed by major software companies such as SAP, Oracle, or
Eschinger.
Two decades ago, such competitive cooperation
would have been unthinkable. The big enterprise
resource planning (ERP) vendors that provided the
software platforms held enormous sway over the market, and these big vendors had big ambitions. Not only
did they want to provide the platforms or “
backbones” to which all of a company’s applications were
connected, but they wanted to provide all of the software as well. No way were they going to invite other
software developers to the table.
But the information technology world of 2010 is
radically different from that of 1990. The emergence
of cloud computing, a business model in which a company’s data and
applications are stored on off-site computers and accessed over the
Internet, challenges the dominance of ERP. In short, a company no
longer has to install ERP software on its own servers to create the
ecosystem platform. The platform can be a “cloud.”
That means it’s theoretically possible for a major supply chain soft-
ware vendor—say, Manhattan or RedPrairie—to serve as the center of
an ecosystem. In fact, analyst Lora Cecere of the Altimeter Group
contends that Google, Amazon, or even Facebook could provide the
platform for a supply chain software ecosystem in the near future.
Most important to logistics and supply chain managers is the fact
that in an ecosystem, the platform vendor does not seek to own or offer
all software applications. Unlike the ERP vendors of the ’90s, which
tried to offer everything to everybody, the software platform maker rec-
ognizes its limits. It knows it can’t do it all. And it understands the
advantages of having other software makers pro-
vide specialized applications for the ecosystem.
“Platform vendors can’t be experts in everything,”
says Gartner analyst Dwight Klappich. “Even if
they could build the application, the market is not
big enough, so they will partner with another ven-
dor that has the expertise.”
What types of specialized programs are we
talking about? Klappich cites fuel-tax manage-
ment programs as an example. Others might
include network design,
inventory strategy opti-
mization, or trailer load
optimization.
Editor’s note: If you plan to attend the Council
of Supply Chain Management Professionals’
Annual Global Conference in San Diego this
month, look for a special panel on software ecosystems. Several of the analysts quoted in this column
will be participating in the event.
