Software

36 Results

 

Firms and the Economics of Skilled Immigration

Firms play a central role in the immigration of skilled workers to the United States. In this paper the authors review the progress that has been made so far on understanding the impacts of high skilled immigration from the perspective of the firm. They discuss why an understanding of the economics of the firm is important, and emphasize the important degree to which firms internalize substitutions and complementarities over different worker groups and occupations. They then review recent academic work about firms and skilled immigration, and describe important areas for future research from both microeconomic and macroeconomic perspectives, respectively. Overall, the authors make clear that firms play an essential and active role in the skilled immigration process. In fact, the structure of the most important skilled immigration program allows firms to first choose the worker that they want to hire before the immigration to the United States occurs. The same importance is true for universities and students, who often become the workers later hired by firms (e.g., Stephan and Levin 2001, Stephan 2010). Given this policy framework, it is particularly valuable to understand exactly how these institutions choose to be a part of the immigration process, the role of the immigrants in their sponsoring institutions, and how these initial conditions persist for future assimilation of the immigrant. Read More

Visualizing and Measuring Software Portfolio Architectures: A Flexibility Analysis

Contemporary business environments are constantly evolving, requiring continual changes to the software applications that support a business. Moreover, during recent decades, the sheer number of applications has grown significantly, and they have become increasingly interdependent. Many companies find that managing applications and implementing changes to their application portfolio architecture is increasingly difficult and expensive. Firms need a way to visualize and analyze the modularity of their software portfolio architectures and the degree of coupling between components. In this paper, the authors test a method for visualizing and measuring software portfolio architectures using data of a biopharmaceutical firm's enterprise architecture. The authors also use the measures to predict the costs of architectural change. Findings show, first, that the biopharmaceutical firm's enterprise architecture can be classified as core-periphery. This means that 1) there is one cyclic group (the "Core") of components that is substantially larger than the second largest cyclic group, and 2) this group comprises a substantial portion of the entire architecture. In addition, the classification of applications in the architecture (as being in the Core or the Periphery) is significantly correlated with architectural flexibility. In this case the architecture has a propagation cost of 23 percent, meaning almost one-quarter of the system may be affected when a change is made to a randomly selected component. Overall, results suggest that the hidden structure method can reveal new facts about an enterprise architecture. This method can aid the analysis of change costs at the software application portfolio level. Read More

Language Wars Divide Global Companies

An increasing number of global firms adopt a primary language for business operations—usually English. The problem: The practice can surface dormant hostilities around culture and geography, reports Tsedal Neeley. Closed for comment; 19 Comments posted.

First Minutes are Critical in New-Employee Orientation

Employee orientation programs ought to be less about the company and more about the employee, according to new research by Daniel M. Cable, Francesca Gino, and Bradley R. Staats. Closed for comment; 16 Comments posted.

10 Reasons Customers Might Resist Windows 8

Has Microsoft become too innovative? Professor Rosabeth Moss Kanter, a leader in the field of change management, discusses reasons that people might not rush to embrace Windows 8. Closed for comment; 27 Comments posted.

Managing the Open Source vs. Proprietary Decision

In their new book, The Comingled Code, HBS professor Josh Lerner and London School of Economics professor Mark Schankerman look at the impact of open source software on economic development. Our book excerpt discusses implications for managers. Closed for comment; 2 Comments posted.

Using What We Know: Turning Organizational Knowledge into Team Performance

An organization's captured (and codified) knowledge--white papers, case studies, documented processes--should help project teams perform better, but does it? Existing research has not answered the question, even as U.S. companies alone spend billions annually on knowledge management programs. Looking at large-scale, objective data from Indian software developer Wipro, researchers Bradley R. Staats, Melissa A. Valentine, and Amy C. Edmondson found that team use of an organization's captured knowledge enhanced productivity, especially for teams that were geographically diverse, relatively low in experience, or performing complex work. The study did not find effects of knowledge use on the quality of the team's work, except for dispersed teams. Read More

One Strategy: Aligning Planning and Execution

Strategy as it is written up in the corporate playbook often becomes lost or muddled when the team takes the field to execute. In their new book, Professor Marco Iansiti and Microsoft's Steven Sinofsky discuss a "One Strategy" approach to aligning plan and action. Read More

The Determinants of Individual Performance and Collective Value in Private-Collective Software Innovation

Why do people expend personal time and effort toward creating a public good? Over the past decade, collaborative, community-based approaches to developing knowledge-intensive products like encyclopediae, music, and software have gained prominence in both practice and scholarly analysis. "Open source software development," for example, is distinguished by self-selection of distributed participants into tasks, free revealing of knowledge, collective creation of shared software artifacts, and participants' ability to generate new innovations by reinterpreting and repurposing knowledge and artifacts created by others. The MathWorks' Ned Gulley and HBS professor Karim R. Lakhani study the determinants of individual performance and collective value in software innovation by analyzing 11 programming competitions that mimic the working of the open source software community. Read More

The Architecture of Complex Systems: Do Core-periphery Structures Dominate?

All complex systems can be divided into a nested hierarchy of subsystems. However, not all these subsystems are of equal importance: Some subsystems are core to system performance, whereas others are only peripheral. In this study, HBS professor Carliss Y. Baldwin and coauthors developed methods to detect the core components in a complex software system, establish whether these systems possess a core-periphery structure, and measure important elements of these structures. The general patterns highlight the difficulties a system architect faces in designing and managing such systems. Results represent a first step in establishing stylized facts about the structure of real-world systems. Read More

Mixing Open Source and Proprietary Software Strategies

Open source and proprietary software development used to be competing strategies. Now software firms are experimenting with strategies that mix the two models. Researcher Gaston Llanes discusses recent research into these "mixed source" strategies. Read More

Fluid Teams and Fluid Tasks: The Impact of Team Familiarity and Variation in Experience

In the context of team performance, common wisdom suggests that performance is maximized when individuals complete the same work with the same people. Although repetition is valuable, at least up to a point, in many settings such as consulting, product development, and software services organizations consist largely of fluid teams executing projects for different customers. In fluid teams, members bring their varied experience sets together and attempt to generate innovative output before the team is disassembled and its individual members move on to new projects. Using the empirical setting of Wipro Technologies, a leading firm in the Indian software services industry, this study examines the potential positive and negative consequences of variation in team member experience as well as how fluid teams may capture the benefits of variation while mitigating the coordination costs it creates. Read More

Principles that Matter: Sustaining Software Innovation from the Client to the Web

Despite the current strength and promise of the Internet software market, the future pace of growth and innovation is not assured. The principles of choice, opportunity, and interoperability were important in the growth of PC software and in the overall health of the information technology ecosystem, and these same principles will shape competition in Internet software, according to HBS professor Marco Iansiti. Given the unprecedented speed at which this industry is developing, consumers and the industry should watch carefully as different companies compete. Choice, opportunity, and interoperability should serve as an important lens, particularly when focused on companies with especially large footprints in the new markets. Read More

Monopolistic Competition Between Differentiated Products With Demand For More Than One Variety

How and when is price competition most significant among firms? This paper develops a theoretical framework for studying price competition between multiple firms. Two examples of markets that fit the description for study are software applications and videogames: There are thousands of software applications as well as games, and different users are interested in different applications and/or games. A given software or game user's tastes may overlap with another's, yet they may have nothing in common with a third's. Thus, although there is a sense in which competition is localized (any given firm competes only with firms whose brands are similar to its own), it is not clear how the fact that consumers are generally interested in purchasing multiple products affects the type of competition waged among firms. Read More

Quantity vs. Quality and Exclusion by Two-Sided Platforms

It is common for two-sided platforms to deny participation to some potential customers, who would otherwise be willing to pay the platforms' access and/or transaction fees. Videogame console manufacturers such as Microsoft, Sony, and Nintendo, for example, restrict access to a select set of game developers and exclude many others by including security chips in their consoles, even though the latter would also be willing to pay the per-game royalties levied by the manufacturers. Apple routinely excludes certain application developers from its highly popular iPhone store. Professor Andrei Hagiu builds a simple model formalizing profit-maximizing two-sided platforms' choice of exclusion policies, which is fundamentally determined by a tradeoff between quality and quantity. Read More

Variation in Experience and Team Familiarity: Addressing the Knowledge Acquisition-Application Problem

Team familiarity helps team members successfully locate knowledge within a group, share the knowledge they possess, and respond to the knowledge of others. While team familiarity may help all teams to better coordinate their actions, it may play a particularly important role for teams with individuals looking to apply knowledge from their varied experience. This possibility leads to the question that provides the foundation for this paper: Does team familiarity moderate the relationship between variation in experience and performance? Prior research attempting to link variation in experience and performance has found effects ranging from positive to neutral to negative. Huckman and Staats explain these differential results by drawing on related work from learning, knowledge management, and social networking. Read More

Monetizing IP: The Executive’s Challenge

Many companies fail to develop a strategy around protecting and monetizing their intellectual property. In this Q&A, Harvard Business School professor Josh Lerner discusses current trends in IP including the rise of patent pools. Read More

The Surprising Right Fit for Software Testing

Software analysts and programmers live to innovate—but hate to run tests. Yet top-notch testing saves many a company money when bugs are caught early. A new case coauthored by HBS professor Robert D. Austin describes the secret behind a Danish consultancy's success: The majority of its testers have Asperger syndrome or a form of autism spectrum disorder. Read More

Optimal Deterrence when Judgment-Proof Agents Are Paid In Arrears—With an Application to Online Advertising Fraud

It is commonplace for large entities (both advertisers and ad networks) to enter into relationships with numerous small agents such as Web sites, blogs, search syndicators, and other marketing partners. For example, one well-known affiliate network boasts more than a million affiliates promoting offers from the network's hundreds of merchants, and Google contracts with numerous independent Web sites to show Google's "AdSense" ads. Although these advertising agents are often small, they can take advantage of technology to claim payments they have not earned. In practice, the legal system cannot offer meaningful redress to an aggrieved advertiser or ad network. This paper argues that delayed payment offers a more expedient alternative—a sensible stopgap strategy for use when primary enforcement systems prove inadequate. Read More

Reducing Risk with Online Advertising

Fraud is fairly easy in the world of online advertising, particularly for determined adversaries. In this Q&A, HBS professor Ben Edelman, who designs electronic markets, explains how contract terms can be managed to both reduce advertisers' risks of being defrauded and reward good suppliers. "The idea here is to make everyone better off, except of course the fraudsters," Edelman says. Read More

The Impact of Component Modularity on Design Evolution: Evidence from the Software Industry

What factors should influence the design of a complex system? And what is the impact of choices on both product and organizational performance? These issues are of particular importance in the field of software given how software is developed: Rarely do software projects start from scratch. The authors analyzed the evolution of a commercial software product from first release to its current design, looking specifically at 6 major versions released at varying periods over a 15-year period. These results have important implications for managers, highlighting the impact of design decisions made today on both the evolution and the maintainability of a design in subsequent years. Read More

Dynamics of Platform Competition: Exploring the Role of Installed Base, Platform Quality and Consumer Expectations

What factors drive platform success, long-run market structure, and market efficiency? Conventional wisdom suggests that for a new platform to be successful, either it must make its technology compatible with the incumbent, or its technical advantage must offer so much value to consumers that it exceeds the combination of functionality, installed base, and complementary goods value offered by the incumbent. Zhu and Iansiti develop a dynamic model to examine the evolution of platform-based markets. They find that a huge quality advantage may not be necessary for an entrant to be successful. Using data from the video game industry, they find support for their theoretical predications. Read More

Bringing ‘Lean’ Principles to Service Industries

Toyota and other top manufacturing companies have embraced, improved, and profited by lean production methods. But the payoffs have not been nearly as dramatic for service industries applying lean principles. HBS professor David Upton and doctoral student Bradley Staats look at the experience of Indian software services provider Wipro for answers. Read More

Team Familiarity, Role Experience, and Performance:Evidence from Indian Software Services

In contexts ranging from product development to service delivery, a significant amount of an organization's work is conducted by "fluid teams" that strive for innovative output. Fluid project teams exist only for the duration of a single project, and are comprised of members who may join or leave a team during the course of a project. In such settings, simple measures of cumulative output may not accurately capture team experience, particularly when changes in team composition are substantial over time. This study of an Indian software services firm, Wipro Technologies, considers an approach for capturing the experience held by fluid teams. It extends the concept of team fluidity in a way that allows for greater granularity in the measurement of team experience and a finer understanding of the determinants of team performance. Read More

Exclusivity and Control

Music, television shows, movies, Internet and mobile content, computer software, and other forms of media often require a consumer to join a platform in order to access or utilize the media. This affiliation may take the form of a subscription to a distribution channel or purchase of a hardware device. One of the primary means of differentiation and competition between platforms for consumer adoption is the acquisition of premium or quality content. However, whether or not certain content is exclusive to one platform or is present on multiple platforms varies significantly from industry to industry. One can even view Apple's exclusive U.S. provision of the iPhone to AT&T as even more variation in the degree of exclusivity across industries. Why is it that some forms of content are available only on one platform, while others are distributed through several or all platforms available—that is, they "multihome"? This paper analyzes industry propensity for exclusivity and presents a model of platform competition. The key driving force is the nature of the relationship between the content and the platforms: outright sale (all control rights, particularly over content pricing, are transferred from the content provider to the platform) or affiliation (the content provider maintains control rights over pricing). Read More

Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry

Several recent studies have highlighted the important role that cross-border ethnic networks might play in facilitating entrepreneurship in developing countries. Little is known, however, about the extent to which domestic entrepreneurs rely on the diaspora and whether this varies systematically by the characteristics of the entrepreneurs or their local business environment. The Indian diaspora is estimated at over 18 million people spanning 130 countries. Given that formal institutions in India remain weak and hence the informal barriers to trade are higher, do diaspora networks serve as substitutes to the functioning of the local business environment? Do they help entrepreneurs to circumvent the barriers to trade arising from imperfect institutions? This study examines the extent to which software entrepreneurs within India vary in their reliance on expatriate networks. Read More

Proprietary vs. Open Two-Sided Platforms and Social Efficiency

The rising popularity of the open-source software movement has prompted many governments around the world to enact policies promoting open-source software systems at the expense of proprietary systems. Oftentimes, these policies seem to stem from a presumption (shared by some economists) that open software platforms are inherently more efficient than their proprietary counterparts. But is that so? This paper provides a simple model of two-sided platforms that clearly shows how this common intuition breaks down in two-sided markets. Read More

Evolution Analysis of Large-Scale Software Systems Using Design Structure Matrices and Design Rule Theory

Designers have long recognized the value of modularity. But because design principles are informal, successful application depends on the designers' intuition and experience. Intuition and experience, however, do not prevent a company such as Microsoft from constantly grappling with unanticipated challenges and delays in bringing software to market. Clearly, designers need a formal theory and models of modularity and software evolution that capture the essence of important but informal design principles and offer ways to describe, predict, and resolve issues. This paper evaluates the applicability of model and theory to real-world, large-scale software designs by studying the evolution of two complex software platforms through the lens of design structure matrices (DSMs) and the design rule theory advanced by Kim Clark and Carliss Baldwin. Read More

The Business of Free Software: Enterprise Incentives, Investment, and Motivation in the Open Source Community

IBM has contributed more than $1 billion to the development and promotion of the Linux operating system, and other vendors such as Sun are ramping up open source software efforts and investment. Why do information technology vendors that have traditionally sold proprietary software invest millions of dollars in OSS? Where have they chosen to invest, and what are the characteristics of the OSS projects to which they contribute? This study grouped OSS projects into clusters and identified IT vendors' motives in each cluster. Read More

How Software Platforms Revolutionize Business

Cell phones, the Game Boy, and PCs are examples of products based upon software platforms—ecosystems where independent companies can provide products and services tied to the core technology. Playing in a software platform world can make you rich—ask ringtone creators—but it also demands special management skills that emphasize cooperation over competition. Professor Andrei Hagiu discusses his new book, Invisible Engines. Read More

Microsoft vs. Open Source: Who Will Win?

Using formal economic modelling, professors Pankaj Ghemawat and Ramon Casadesus-Masanell consider the competitive dynamics of the software wars between Microsoft and open source. Read our interview. Read More

Exploring the Structure of Complex Software Designs: An Empirical Study of Open Source and Proprietary Code

How does a product's design mirror the organization that develops it, and how does such a dynamic occur? To track the evolution of one design over time, this exploratory study compared software designs developed via different modes of organization-open source versus proprietary development. As it turned out, the architecture of the product developed by a highly distributed team of developers (Linux) was more modular than another product of similar size developed by a co-located team of developers (Mozilla). The study helped reveal potential performance tradeoffs from architectures with different characteristics. Read More

Wrap-up: Software, Telecom, and Recovery

How is the VC industry doing on its own and in partnership with software and telecoms? These were just three topics discussed in special panel sessions at the recent conference. Here, a few highlights from those conversations. Read More

Governance in India and Around the Globe

India is not known for rigid corporate governance standards. Is software giant Infosys changing all that? A working paper by HBS professors Tarun Khanna and Krishna Palepu looks at how globalization may—or may not—foster convergence of corporate governance. Read More

Why Evolutionary Software Development Works

What is the best way to develop software? HBS professor Alan MacCormack discusses recent research proving the theory that the best approach is evolutionary. In this article from MIT Sloan Management Review, MacCormack and colleagues Marco Iansiti and Roberto Verganti uncover four practices that lead to successful Internet software development. Read More

The Simple Economics of Open Source

What motivates thousands of computer programmers-and even the companies that employ them-to share their code with the world? The growing use of so-called "open source" software may not seem, at first glance, to make much economic sense. But according to research by HBS Professor Josh Lerner and his colleague Jean Tirole, economics may actually help explain why open source works as well as it does. Read More