Invisible Engines: How Software Platforms Drive Innovation and Transform Industries

409 Pages Posted: 14 Mar 2016

See all articles by David S. Evans

David S. Evans

Global Economics Group; University College London

Andrei Hagiu

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: March 13, 2016

Abstract

“Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution — a revolution that will change both new and old industries.” Invisible Engines was written, including those words, mainly in 2004 and 2005 and published in 2006. Timing is everything and, sometimes, even economists get it right: on January 9, 2007 Steve Jobs introduced the iPhone. We believe Invisible Engines may still be worth reading for the enduring principles it lays out; for the lessons taught by software platforms that transformed the economy from the mid 1970s through the mid 2000s; and for its general insights into new economics of multisided platforms. Some of the book will, no doubt, seem like watching an old movie with landline telephones and big cathode ray screens sitting or workers’ desks.

Note: MIT Press has kindly agreed to allow us to post the published book on SSRN for free distribution. Invisible Engines was the Winner of the Business, Management & Accounting category in the 2006 Professional/Scholarly Publishing Annual Awards Competition presented by the Association of American Publishers.

Keywords: software platforms, two-sided markets, multi-sided platforms, operating systems, information communications and technology, mobile phones

JEL Classification: D21, D22, D23, D40, D47, K21, L10, L14, L17, L23, L40, L63, L86, L96, N00, N70, O30, O31, O47

Suggested Citation

Evans, David S. and Hagiu, Andrei and Schmalensee, Richard, Invisible Engines: How Software Platforms Drive Innovation and Transform Industries (March 13, 2016). Available at SSRN: https://ssrn.com/abstract=2747032

David S. Evans (Contact Author)

Global Economics Group ( email )

111 Devonshire St.
Suite 900
Boston, MA 02108
United States

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Andrei Hagiu

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-313
Cambridge, MA 02142
United States
617-715-4844 (Phone)

HOME PAGE: http://andreihagiu.com/

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Room E62-525
Cambridge, MA 02142
United States
617-253-2957 (Phone)
617-258-6617 (Fax)

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