Digital Innovation Challenges

Transcription

1 Digital Innovation Challenges The Distributed Tuning of Apple s ios Dr Carsten Sørensen London School of Economics and Political Science Department of Management The Information Systems and Innovation Group [email protected] carstensorensen.com digitalinfrastructures.org Collaborators on this work: Ben Eaton, Oslo Silvia Elaluf-Calderwood, LSE Kalle Lyytinen, Case Western David Tilson, University of Rochester Youngjin Yoo, Temple University

2 General Post Office 1964 view of telecoms in the 90's

3 Digital Infrastructures

4 Digitizing Analog to digital conversion Analog signal is sampled, quantized, and turned into bit stream Digital to analog conversion Analog signal reconstructed from bit stream

5 Analogue = Tight Coupling Storage Format Processing Technology Distribution Technology Music (Tilson, Lyytinen, & Sørensen, 2010)

6 Digital = Loose Coupling Storage Formats Processing Technology Distribution Technology Music (Tilson, Lyytinen, & Sørensen, 2010)

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8 The Stone Age did not end because humans ran out of stones. It ended because it was time for a re-think about how we live. William McDonough Architect Stoneage Ironage Bronzeage... there are known knowns; there are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don't know. But there are also unknown unknowns there are things we do not know we don't know. Donald Rumsfeld United States Secretary of Defense. Dr Carsten Sørensen Plastic Digital

9 Digital Materiality Editable Interactive Open Reprogrammable Distributed Fluid Transfigurable Modularity Granularity (Kallinikos, Aaltonen & Marton, 2013)

10 First morning after Sweden changed from driving on the left side to driving on the right,

11 The Internet Decentral structure Born out of unregulated packet-switching Many-to-Many Communication Telecommunications Payment termination Born out of regulated line-switching One-to-One Communication Content Providers Movies, Music, Television Established vertical stack One-to-Many Communication

12 21st Century Challenge 20th Century: Industrial infrastructures for instant encounters with customers through products (roads, railways, electricity etc) 21st Century: Digital infrastructures for ongoing hyper-customised customer relationships through services (mobile internet etc) We do not understand the dynamics of digital platform, -infrastructure, and -service ecosystem innovation, yet we are in the middle of significant disruption caused by such dynamics.

13 Dr Carsten Dr Sørensen, John Atkinson, LSE Wrong Hands 9gag.com/gag/

14 Paradoxes Change Control Stability Prior investments Previous design decisions Control structures Change Recursion Scalability Flexibility (Re)negotiated meanings Centralised Control Old analog control structures Industry structures Regulation / laws Distributed Control Effect of changes Rivalries/tussles for new control points Short-term stability

15 Digital Infrastructures Change: Change through growth and new standards enabled by stable standards and -installed base. Control: Increased control can both hinder and facilitate increased generativity Relational across layers not recursively organised. Electricity and water utilities cannot generatively create new infrastructure businesses to challenge incumbents. Extremely scalable: Components relatively easily replaced and upgraded Upwards flexible: Open to creation of higher-level services Downwards flexible: Wide range of networks potentially providing interconnectivity Convergent and Divergent depending on perspective Paradoxes of change and control Unknowability of innovation through recombination (Tilson, Lyytinen & Sørensen, 2010, Yoo, Henfridsson, Lyytinen, 2010)

16 ! Generativity New patterns of (socio-technical) connections enabled Blurring of social categories New (temporarily) stable socio-tech configurations! Dynamics$reflect$tussles$between$ centralized$and$distributed$control$ Flexibility /Stability Strategic actions (many actors) New (contested) control points (Re)development of digital infrastructures e.g.$attempts$to$exert$control$ points$or$negate$those$of$ others$ (Tilson, Lyytinen, Sørensen, 2010b) 16

17 Smartphone Service Systems

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19 Burnt-Out Platform? I have learned that we are standing on a burning platform. And, we have more than one explosion - we have multiple points of scorching heat that are fueling a blazing fire around us. [...] Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem. In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. [...]Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range. Nokia CEO Stephen Elop

20 Platforms Stable core modules Peripheral modules support variety Industry platforms supporting standardisation Products, systems, services and technologies, e.g., airframes and jet engines, car underbodies and engines, printers, and power tool motors, computer operating systems, networking protocols, credit card systems, video game consoles, shopping malls, and dating sites Mirror hypothesis - modular architecture and organisational structure (Tilson, Sørensen & Lyytinen)

21 Types Product development early 1990s - platform product open for modifications Platform investments, -technologies, and -thinking Internal platforms Supply chain platforms Industry platforms Multi-sided markets (Gawer & Cusumano; Gawer)

22 Wireless device platforms

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24 Apple vs Google Apple itunes App Store ios Handset dongle Premium brand Pre-approval Tight control Google Android Market Place Android Advertisement Premium to medium Post-yanking Loose control

25 Apple s Strategy Elements No investments in telecommunications infrastructure Invest in cloud infrastructure for bespoke services Utilise other infrastructures (GSM, LTE, Internet etc) Shift as many services to use IP over 3G or 4G as the partner networks will allow Initially selected one exclusive operator in each country with revenue sharing arrangement Subsequently, traditional handset subsidy, but with Apple in full brand control Price-plan separate issue for operator Profits from handset, icloud subscription, iad advertisement, 30% tax on content, apps, and inapp subscriptions Seek to converge communication from operators to Internet as lock-in (imessenger) through deep integration Anything machine to be generatively defined and populated in interaction with global community Careful cultivation of control points to ensure control, yet allow creativity Value added to ecosystem through greatly reducing capital costs of new innovation - from large expensive development organisations to small and nimble bedroom developers. (Tilson, Sørensen & Lyytinen)

26 Distributed Tuning of Boundary Resources

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28 Digital Disruptions From Industrial System Management The management of distributed manufacturing processes through a centrally negotiated and -controlled architecture with associated modules. Mix-and-match modules to innovate Design hierarchy with no side-effects Governance through structural arrangements Abernathy, Utterback, Clark, Baldwin, Henderson, Gawer To Service System Management The innovation and re-arrangement of service systems facilitating the co-production of services Digital infrastructures, -platforms and -service systems Layered-modular architectures (Yoo et al, 2010) Governance through day-to-day operational decisions The ongoing resolution of paradox of control and generativity

29 The ios Game Native ios Apps Web Apps Jailbreak App Stores Reject Accept Apple Allowing Blocking Refining Ignoring HTML 5.0 Resist Cooperate Developer Requesting Bypassing Influencing Revise Native Jailbreak Drop

30 Just over 4600 blog postings

31 Service Systems and Boundary Resources Service Dominant Logic - Service Systems (Vargo & Lusch) Boundary Resources (Ghazawneh & Henfridsson) Tuning - resistance and accommodation (Pickering, Barrett et al)

32 Extreme Case 1 million ios apps 4600 blog articles 45 instances of disputed code 30 boundary resources in 15 clusters 6 themes

33 Boundary Resource (Ghazawneh & Henfridsson 2013)

34 Resistance is not Futile! Developer Response to Apple s Control Cooperate Resist Changes to Apple s Control Arrangements Changes to innovation arrangements No changes to innovation arrangement 0 or 45 cases 22 of 45 cases 10 of 45 cases 13 of 45 cases, 2007

35 Results The Distribution of Apps Written in Native ios Code - Jailbraking (Jan 07- ) The Migration of Installed Base - Adobe Flash & developer tools (Jan 07- Nov 11) Negotiating the Equivocality of Content Controls - Mark Fiori (Jul 08- Sep 10) Contesting Revenue Cannibalisation by Proxy - Google Voice, Skype... (Jul 09- Sep 10) The Control of Customer Data - Financial Times (Apr 10 - Jun 11)

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39 Issues Distributed Tuning Of Boundary Resources Theorising the process Controlled Generativity of Distributed Tuning. Digitality and the Dynamics of Power

40 Contributions Service Dominant Logic - Service Systems (Vargo & Lusch) Political actions of greatly heterogeneous actors relational power. Boundary Resources (Ghazawneh & Henfridsson) Distributed process where even the weak have leverage, and involving a range of actors. Tuning - resistance and accommodation (Pickering, Barrett et al) Distributed across heterogeneous actors and technologies. Individual and group struggles interacting in a distributed context.

41 Barrett, Oborn, Orlikowski and Yates (2012): Reconfiguring Boundary Relations: Robotic Innovations in Pharmacy Work. Organization science, vol. 23, no. 5, pp Benkler, Y. (2006): The Wealth of Networks. Yale University Press. Clark, K. B. (1985) The Interaction of Design Hierarchies and Market Concepts in Technological Evolution. Research Policy, 14(5): Clark, D. D., J. Wroclawski, K. R. Sollins, & R. Braden (2005): Tussle in Cyberspace: Defining Tomorrow's Internet. IEEE/ACM Transactions on Networking, vol. 13, no. 3, pp Eaton (2013): Distributed Tuning of Boundary Resources: The Case of Apple s ios Service System. Forthcoming in MIS Quarterly, Eaton, B., S. Elaluf-Calderwood, C. Sørensen, & Y. Yoo (2011): Structural Narrative Analysis as a means to unfold the Paradox of Control and Generativity that lie within Mobile Platforms. In The 10th International Conference on Mobile Business, Como, Italy Eaton, B., S. Elaluf-Calderwood, & C. Sørensen (2010): The Role of Control Points in Determining: Business Models for Future Mobile Generative Systems. In Proceedings of joint 9th International Conference on Mobile Business (ICMB 2010) and 9th Global Mobility Roundtable (GMR 2010), Athens: Eaton, B., S. Elaluf-Calderwood, & C. Sørensen (2010): A Methodology for Analysing Business Model Dynamics for Mobile Services using Control Points and Triggers. In Business Models for Mobile Platforms (BMMP 2010), Berlin: Elaluf-Calderwood, S., C. Sørensen, B. Eaton, & J. Herzhoff (2011): Control Points and Tussles in Flexible Mobile Network Innovation. In European Conference of Information Systems - ECIS 2011, Helsinki, Finland: Farjoun, M. (2010) Beyond Dualism: Stability and Change as a Duality. Academy of Management Journal, 35(2): Gawer (2009): Platforms, Markets and Innovation. Cheltenham: Edward Elgar, Gawer and Cusumano (2002): Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation Harvard Business School Press. Ghazawneh and Henfridsson (2013): Balancing Platform Control and External Contribution in Third-Party Development: The Boundary Resources Model. Information Systems Journal, vol. 23, no. 2, pp Hanseth, O. & K. Lyytinen (2010): Design Theory for Dynamic Complexity in Information Infrastructures: The Case of Building Internet. Journal of Information Technology, vol. 25, no. 1, pp Henderson, R. M. & Clark, K. B. (1990) Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms. Administrative Science Quarterly, 35: Henfridsson and Bygstad (2013): The Generative Mechanisms of Digital Infrastructure Evolution. MIS Quarterly, vol. 37, no. Forthcoming. Henfridsson, Mathiassen and Svahn (2014): Managing technological change in the digital age: the role of architectural frames. Journal of Information technology. Herzhoff, J. (2009): The ICT Convergence Discourse in The Information Systems Literature A Second-Order Observation. In European Conference of Information Systems (ECIS), Verona, Italy. Herzhoff, J. (2010): Convergence and Mobility: Just Another Fad or Fashion? A Systems- Theoretical Analysis. In 18th European Conference on Information Systems (ECIS), South Africa. Herzhoff, J. (2011): Unfolding the Convergence Paradox: The Case of Mobile Voice-Over-IP in the UK. PhD Thesis, London School of Economics and Political Science. Herzhoff, J., S. Elaluf-Calderwood, & C. Sørensen (2010): Convergence, Conflicts, and Control Points: A Systems-Theoretical Analysis of Mobile VoIP in the UK. In Proceedings of joint 9th International Conference on Mobile Business (ICMB 2010) and 9th Global Mobility Roundtable (GMR 2010), Athens: Kallinikos, J. (2010) Governing Through Technology: Information Artefacts and Social Practice. London: Palgrave. Lessig, L. (1999): Code and Other Laws of Cyberspace. New York: Basic Books. Lessig, L. (2002): The Future of Ideas: The Fate of the Commons in a Connected World. New York: Vintage Books. Lewis, M. (2000): Exploring Paradox: Toward a More Comprehensive Guide. Academy of Management Review, vol. 25, no. 4, pp Nielsen, P. & O. Hanseth (2010): Towards a Design Theory of Usability and Generativity. In 18th European Conference on Information Systems (ECIS), South Africa. Pickering (1993): The Mangle of Practice: Agency and Emergence in the Sociology of Science. American Journal of Sociology, vol. 99, no. 3, pp Poole, M. S. & A. H. Van de Ven (1989): Using Paradox to Build Management and Organization Theories. Academy of Management Review, vol. 14, no. 4, pp Saltzer, J. H., D. P. Reed, & D. D. Clark (1984): End-To-End Arguments in System Design. ACM Transactions on Computer Systems, vol. 2, no. 4, pp Shapiro, C. & H. R. Varian (1998): Information Rules: A Strategic Guide to the Network Economy. Harvard Business School Press. Star, S. L. & Ruhleder, K. (1996) Steps Toward an Ecology of Infrastructure: Design and Access for Large Information Spaces. Information Systems Research, 7(1): Tilson, D. (2008): The Interrelationships Between Technical Standards and Industry Structures: Actor-Network Based Case Studies of the Mobile Wireless and Television Industries in the US and the UK. Unpublished Doctoral Dissertation, Case Western Reserve University. Tilson, D., Lyytinen, K., & Sørensen, C. (2010a) Desperately Seeking the Infrastructure in IS Research: Conceptualization of Digital Convergence as the Co-evolution of Social and Technical Infrastructures. In 43rd Hawaii International Conference on System Science (HICSS 43), Kauai. Tilson, D., Lyytinen, K., & Sørensen, C. (2010b) Digital Infrastructures: The Missing IS Research Agenda. Information Systems Research, 20(4): Tilson, D., C. Sørensen, & K. Lyytinen (2011): The Paradoxes of Change and Control in Digital Infrastructures: The Mobile Operating Systems Case. In The 10th International Conference on Mobile Business, Como, Italy Tilson, D., Sørensen, C., & Lyytinen, K. (2012) Change and Control Paradoxes in Mobile Infrastructure Innovation: The Android and ios Mobile Operating Systems Cases. In 45th Hawaii International Conference on System Science (HICSS 45), Maui, HI. Best track paper. Tiwana, A., B. Konsynsky, & A. A. Bush (2010): Platform Evolution: Coevolution of Platform Architecture, Governance, and Environmental Dynamics. Information Systems Research, vol. 21, no. 4, pp Vargo, S. L. & Lusch, R. F. (2004) Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68(1): Wu, T. (2010): The Master Switch: The Rise and Fall of Information Empires. Knopf Publishing Group. Yoo, Y., O. Henfridsson, & K. Lyytinen (2010): The New Organizing Logic of Digital Innovation: An Agenda for Information Systems Research. Information Systems Research, vol. 21, no. 4, pp Zittrain, J. (2008): The Future of the Internet: And How to Stop It. Allen Lane. Zittrain, J. (2008): Ubiquitous Human Computing. Philosophical Transactions of The Royal Society, vol. 366, pp

42 digitalinfrastructures.org 10 x 3 Minute YouTube Videos London tourist sight Digital Infrastructure Issue

43 Watch in your own time...

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45 Long and Winding Road... 22/9/2010 Youngjin spent one day at LSE with Ben, Silvia and I... and since then we have Skyped almost once each week... MISQ Special Issue on Service Innovation in a Digital Age 15/2/2011 First Submission - Apple and Google 13/11/2012 Discuss changes with editors in Honolulu 24/2/2012 Second Submission - Apple s Innovation Boundaries 14/12/2012 Youngjin present ideas at ICIS 2013 panel 12/2013 Discuss contribution with Senior Editor 4/2/2013 Third Submission - Digital Service Ecosystem Governance 30/10/2013 Fourth entirely new submission - Distributed Tuning of Boundary Resources. 4/2/2014 Acceptance with minor/moderate changes 15/4/2014 Final submission 2014/2015? Publication available Each iteration: Huge uncertainty, possible doom, unlikely nirvana, long wait... almost certainly more work but not entirely new paper...

46 Distributed and collaborative working Mobile information technology Enterprise mobility The Internet & work The future of work enterprisemobilitybook.com IFIP Internet Project

47 Collaborators Incomplete list Faculty Dr Carsten Sørensen, LSE Prof Kalle Lyytinen, Case Western Reserve University Prof Kjeld Schmidt, Copenhagen Business School Prof Lars Mathiassen: Georgia State University Prof Ola Henfridsson: Warwick University Business School Prof Youngjin Yoo: Temple University 1 Doctoral Students (at least at some point in this process ;-) Primary supervisor Dr Adel Al-Taitoon 1 2 Secondary supervisor : Off-premises F/X trading in Middle-East bank Dr Amarolinda Saccol: PDA Support for Brazilian bank workers Antti Lyyra 1 : Robotics Platforms & Machine Learning Dr Arianna Bassoli 1 : The urban experience and ubiquitous technology Dr Ben Eaton 1 : Technical visions for mobile innovation Dr Daniele Pica 2 : Mobile interaction in UK operational policing Dr David Tilson 2 : Digital infrastructure innovation Dr Fredrik Ljungberg 2 : Göteborg Universiy: Networking Dr Gamel Wiredu 1 : Mobile ICT for remote learning in NHS Dr Henrik Fagrell 2 : Göteborg University: Mobile Knowledge Dr Jan Herzhoff 2 : Convergence and control in mobile infrastructures Dr Jan Kietzmann 1 : Mobile communities of practice Dr Katerina Voutsina 2 : Itinerant IT experts in Greece Dr Kofi Boateng 1 : ICT-based control in distributed organising Dr Lars Svensson 2 : University West: Communities of Distance Education Dr Masao Kakihara 1 : Emerging practices of Tokyo professionals Dr Nina Lundberg 2 : Göteborg University: IT in Health Care Dr Ofer Engel 1 : Social Networking Services Dr Patrick Kärrberg 2 : Mobile service delivery platforms Dr Peter Carstensen 2 : Coordination of software testing Reuel Ocho 1 : Digital Fluency and Virtualisation in Cloud Computing Dr Silvia Elaluf-Calderwood 1 : Choosing contexts in taxi work Siobhan Thomas 1 : Computer Game Development and Somatic Awareness Dr Ulrika Snis 2 : University West: Codifying Knowledge Work

48 Projects Digital Music Project Second-order video data analysis Approx. 200 music producers Digital music materiality INFORMATION SYSTEMS AND INNOVATION GROUP Department of Management 2013 NewCo Project Mobile advertisement startup Quantified self INFORMATION SYSTEMS AND INNOVATION GROUP Department of Management Telenor Project Internet Innovation & Value Networks The Internet & mobile- and fixed operators INFORMATION SYSTEMS AND INNOVATION GROUP Department of Management MVCE / EPSRC Flexible mobile networks User interaction for breakthrough services INFORMATION SYSTEMS AND INNOVATION GROUP Department of Management Laboratorium Projects Work-Integrated Learning and Coordination (University West, EU Area 2 Funding) The Internet Project The COMIC Project Organisational aspects of Internet use (Göteborg, Oslo etc) Coordination mechanisms for distributed working (EU ESPRIT - Loads of unis)

49 Layered-Modular Architectures Physical goods and digital software Modularity of manufacturing Layering of software Layered Modular Architecture extending the modular architecture of physical goods with four loosely coupled digital layers of: devices networks services, and contents Contents Layer Service Layer Network Layer Logical Transmission Physical Transport Device Layer Logical Capability Physical Machinery (Yoo, Henfridsson & Lyytinen, 2010)

50 Layered Modular Architecture Modular Architecture Fixed product boundary and meaning Loose coupling between components through standardized interfaces Components nested in a single design hierarchy Product-specific components Components designed and produced by firms sharing productspecific knowledge Low Reprogrammability Homogenization of data Self-reference High Layered Modular Architecture Fluid product boundary and meanings Loose coupling between components through standardized interfaces Heterogeneous layers following multiple design hierarchies Product-agnostic components Layer are coupled through standards and protocols shared by heterogeneous firms (Yoo, Henfridsson & Lyytinen, 2010, p.729)