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Transaction Cost Theory - Request for Participation in Research

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Wilco van Duinkerken
Wilco van Duinkerken

Software vendors often use components of external vendors or open source communities. One way to see how to govern these relationships is by looking at Transaction Cost Economics. In order to help me operationalize Transaction Cost Economics for software vendors I am looking for product software managers that want to participate in my research.

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Transaction Cost Economics in Software Ecosystems Wilco van Duinkerken - Utrecht University wilco@sparkboxx.com - June 19th 2009
Did you ever ask yourself one of the following questions?
Should I write a software component myself or buy/use it from somebody else?
I¡¯m using an open source component, when do I start contributing?
What are the ¡°hidden¡± costs of using external components?
How can I limit the costs and risks of using external components?
How to govern the relationships with my component providers? m-w: gov¡¤ern (?g?-v?rn) : a) to control, direct, or strongly in?uence the actions and conduct of b) to exert a determining or guiding in?uence in or over <income must govern expenditure> c) to hold in check : restrain
Transaction Cost Economics ? Initiated by Coase, 1937 ? De?ned by Williamson, 1971 and going strong ? Researched in the ?elds of a.o. Human Assets, Procurement, Oil & Gas, Electricity, Music Industry and Outsourcing ? Little empirical research of TCE in IT ? No proof (yet) of TCE in the product software industry
The Basics ? You can do/ produce something internally (yourself) or buy it from the market ? One can buy ¡°from the market¡± using different governance modes ? The governance modes differ in the amount of control, ?exibility and costs
Governance modes ? Markets ? Alliance ? Hierarchies ? Joint Venture ? Short term contract ? Master Service Agreement (Raamwerkovereenkomst) ? Long term contract ? SaaS (webservice) ? Service Level Agreements ? Partial Ownership (buy ? Open Source License shares) ? Open Source Contribution
The governance modes differ in the amount of control, ?exibility and costs
A governance mode is chosen based on transaction costs
Transaction Costs ? Are determined by three factors ? Asset Speci?city: How speci?c (and important) is the product or service you are buying. ? Recurrence: How often does the transaction occur. ? Uncertainty: Internal, external and behavioral uncertainty.
Governance mode determination by transaction costs Asset Speci?city Low High Low Neo-classical Contract (Collaborating) Uncer- tainty Classical Contract (non-collaborating) internal High Relational contract governance occasional recurrent Recurrence Hierarchy Coordination Market Coordination
I want to answer the question: ? Can Transaction Cost Economics be applied to explain the governance structure of relationships between buyers and suppliers of software components in Software Ecosystems?
I would like to: 1. Have a group discussion about: What are transaction costs of software components? 2. Have individual interviews on: How do you choose which component to use? and How to govern the relationship with the supplier of this component?
Planning ? Group Discussion: ? when: The ?rst week of July (date to be set) ? where: Utrecht University (Beleidslab) ? how long will it take me? ¡À 90 minutes ? Individual interviews: ? when: Somewhere in July ? where: Anywhere ? how long will it take me? ¡À 60 minutes
Can I Participate in Both the group and Individual sessions? Yes, you can :-)
What¡¯s in it for me? 1. You will receive a print and/or electronic version of my thesis. 2. You will gain some insight in your company relations and possible ways of improving these relations. 3. I¡¯m willing to give a presentation about the subject at your company when my thesis is ?nished.
Want to participate? ? Please contact me: ? E-mail: wilco@sparkboxx.com ? Twitter: @sparkboxx ? LinkedIn: http://www.linkedin.com/in/ wilcovd
More sources ? Download my thesis so far ? View a summary of my thesis research at http://prezi.com/90808/

More Related Content

Transaction Cost Theory - Request for Participation in Research

  • 1. Transaction Cost Economics in Software Ecosystems Wilco van Duinkerken - Utrecht University wilco@sparkboxx.com - June 19th 2009
  • 2. Did you ever ask yourself one of the following questions?
  • 3. Should I write a software component myself or buy/use it from somebody else?
  • 4. I¡¯m using an open source component, when do I start contributing?
  • 5. What are the ¡°hidden¡± costs of using external components?
  • 6. How can I limit the costs and risks of using external components?
  • 7. How to govern the relationships with my component providers? m-w: gov¡¤ern (?g?-v?rn) : a) to control, direct, or strongly in?uence the actions and conduct of b) to exert a determining or guiding in?uence in or over <income must govern expenditure> c) to hold in check : restrain
  • 8. Transaction Cost Economics ? Initiated by Coase, 1937 ? De?ned by Williamson, 1971 and going strong ? Researched in the ?elds of a.o. Human Assets, Procurement, Oil & Gas, Electricity, Music Industry and Outsourcing ? Little empirical research of TCE in IT ? No proof (yet) of TCE in the product software industry
  • 9. The Basics ? You can do/ produce something internally (yourself) or buy it from the market ? One can buy ¡°from the market¡± using different governance modes ? The governance modes differ in the amount of control, ?exibility and costs
  • 10. Governance modes ? Markets ? Alliance ? Hierarchies ? Joint Venture ? Short term contract ? Master Service Agreement (Raamwerkovereenkomst) ? Long term contract ? SaaS (webservice) ? Service Level Agreements ? Partial Ownership (buy ? Open Source License shares) ? Open Source Contribution
  • 11. The governance modes differ in the amount of control, ?exibility and costs
  • 12. A governance mode is chosen based on transaction costs
  • 13. Transaction Costs ? Are determined by three factors ? Asset Speci?city: How speci?c (and important) is the product or service you are buying. ? Recurrence: How often does the transaction occur. ? Uncertainty: Internal, external and behavioral uncertainty.
  • 14. Governance mode determination by transaction costs Asset Speci?city Low High Low Neo-classical Contract (Collaborating) Uncer- tainty Classical Contract (non-collaborating) internal High Relational contract governance occasional recurrent Recurrence Hierarchy Coordination Market Coordination
  • 15. I want to answer the question: ? Can Transaction Cost Economics be applied to explain the governance structure of relationships between buyers and suppliers of software components in Software Ecosystems?
  • 16. I would like to: 1. Have a group discussion about: What are transaction costs of software components? 2. Have individual interviews on: How do you choose which component to use? and How to govern the relationship with the supplier of this component?
  • 17. Planning ? Group Discussion: ? when: The ?rst week of July (date to be set) ? where: Utrecht University (Beleidslab) ? how long will it take me? ¡À 90 minutes ? Individual interviews: ? when: Somewhere in July ? where: Anywhere ? how long will it take me? ¡À 60 minutes
  • 18. Can I Participate in Both the group and Individual sessions? Yes, you can :-)
  • 19. What¡¯s in it for me? 1. You will receive a print and/or electronic version of my thesis. 2. You will gain some insight in your company relations and possible ways of improving these relations. 3. I¡¯m willing to give a presentation about the subject at your company when my thesis is ?nished.
  • 20. Want to participate? ? Please contact me: ? E-mail: wilco@sparkboxx.com ? Twitter: @sparkboxx ? LinkedIn: http://www.linkedin.com/in/ wilcovd
  • 21. More sources ? Download my thesis so far ? View a summary of my thesis research at http://prezi.com/90808/