Definition
Open Ecosystem Model (or horizontal integration) is a business model where a company licenses its software to multiple hardware partners (e.g., Android, Windows).
Why It Matters
It maximizes scale, market share, and developers’ reach by leveraging the manufacturing power of partners.
Core Concepts
- The Jobs/Gates Binary:
- Gates (Open): Pursued a “horizontal standard” by licensing MS-DOS/Windows. This model prioritizes market share, compatibility, and rapid scaling.
- Cycle of Dominance: History shows that open models often win in market share (e.g., Windows, Android), but integrated models capture the majority of the industry’s profit (e.g., Macintosh, iPhone).