Companies that make nonphysical or intangible products, such as software and computer-based information services, can use the concepts of product families, product platforms, and derivative products. Our purpose here is to show how to apply these concepts for more effective development of software products, whether for commercial sale or for systems developed by MIS staffs.
Our first hypothesis: that well-designed platform architectures for software products, like platform architectures for physical products such as a car or office furniture, can provide substantial R&D productivity benefits for development organizations. We define a product platform as a set of subsystems and interfaces that form a common structure from which a stream of derivative products can be efficiently developed and produced.1 That efficiency is measurable in terms of the cost and time required to generate products from underlying platforms.2
Platforms as an engineering concept are not new. A chapter in Modern Man by Henry Ford contains a careful delineation of subsystems inside an automobile and examines new component technologies both inside and outside the company to improve comfort, ease of use, and durability.3 And, during the development of the DC3 in the 1930s, a small team of dedicated engineers that wanted to make commercial passenger traffic profitable for the fledgling airlines designed the DC1 platform as a series of innovations to major aircraft subsystems. The new platform subsystems included new designs for a welded frame, new engines from suppliers, new navigation systems, stronger landing gear, and a passenger friendly interior, all designed during several weeks. Better versions emerged, leading to the DC3, and from it, a passenger version, a cargo version, a troop-carrying version, and so on, all derivative products based on the same product platform.4 Platforms are the common sense of yesteryear being rediscovered today by management in various industries.
This definition — the platform composed of subsystems and interfaces between subsystems and the external environment — serves well for software. Indeed, at a conceptual level, the architecture of a software platform differs little from that of a chair. The chair’s subsystems include the pedestal, stem, seat, armrest, backrest; the subsystem interfaces include various fasteners, coasters, and user interfaces, such as the height adjustment lever and seat cushions.
1. M.H. Meyer and A.P. Lehnerd, The Power of Product Platforms (New York: Free Press, 1997), p. xii.
2. M.H. Meyer, P. Tertzakian, and A.P. Lehnerd, “Metrics for Managing Product Development in the Context of the Product Family,” Management Science, volume 43, January 1997, pp. 88–111.
3. H. Ford, Today and Tomorrow (Garden City, New York: Doubleday, Tage, and Company, 1926;
Cambridge, Massachusetts: Productivity Press, 1988, reprint).
4. Public Broadcasting System, Nova segment, The Plane That Changed the World. Today, there are some 100,000 DC3s still performing short-haul duty around the globe.
5. M.A. Cusumano and R.W. Selby, Microsoft Secrets (New York: Free Press, 1995).
6. E. Brynjolfsson and C.F. Kemerer, “Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market,” Management Science, volume 42, December 1996, pp. 1627–1647.
7. This is an impressive company. Financial results for the company in the quarter ending June 1998 show approximately $150 million annual sales, a gross margin of more than 90 percent, and an operating margin (profit before tax) of more than 25 percent. Growth by fiscal year (September) was $34 million in 1995, $60 million in 1996, and $100 million in 1997. Visio has in excess of $100 million cash on its balance sheet, compared to $36 million in liabilities.
8. M.H. Meyer and L. Lopez, “Technology Strategy in a Software Products Company,”Journal of Product Innovation Management, volume 12, Summer 1995, pp. 294–306.
9. To examine VenturCom’s real-time process control technology, see the company’s Web site at: http://www.venturcom.com.
10. K. Kelly, Out of Control (Reading, Massachusetts: Addison Wesley, 1994).
11. By “high end,” we refer to higher cost and higher performance systems in terms of such dimensions as complexity of analyses, execution speed, and degree of distributed computing architecture.
12. There was a total of forty subsystem iterations (five major subsystem areas times eight systems or products), but four of these had no applicable subsystem module, leading to thirty-six possible common technology applications.
13. Teams may take the additional step of assessing an approximate percentage of reuse and usability for common subsystem technology. These percentages are merely applied to the numerator and denominator of the commonality calculation.
14. As a variation of a process we call “composite design,” described in chapter 4 of Meyer and Lehnerd (1997), we have experimented using platform subsystems as a basis for talking to lead users.
More specifically, we have asked these users to identify their own needs, examples of products that satisfy those needs, and the approaches taken by those products, on a subsystem by subsystem basis, as opposed to the product or system as a whole. Then the group of respondents rank orders the list of needs. This process not only identifies best approaches by competitors; it helps identify partners in technologies that can be licensed for subsystems that the firm needs to incorporate into the system but does not choose to make.