As social beings, humans are not living in isolation but rather interact and communicate within their social network via language, meant to convey parts of some conceptualization from the sender to a single recipient or a set of recipients. Communities of agents not only share a common language but also the individual conceptualizations of the world (real and abstract) have to overlap to a significant extent, allowing for efficient reference to whole conceptual structures like "the German constitution", "game theory" or "medical sciences". For "societies" of interacting technical devices or software agents the situation is not quite as Babylonian since although these agents are meant to act individually (and also have a private state and private knowledge) in most cases they are designed to refer to one common ontology or standardized protocol and thus do not have to deal with misunderstanding. However, the more these systems become interconnected, the more this situation resembles the one described for societies of human agents even though the misunderstanding might be easier to detect when the different reference ontologies are made explicit and published. Obviously, in both cases standardization of a common language or set of rules for interaction reduces the individual degree of freedom for the sake of compatibility and benefits derived from interaction. In his work, Falk Graf von Westarp addresses the software market as a domain strongly depending on compatibility effects of the individuals' decisions.
This book identifies the relevant determinants of modern software markets, and incorporates these in a simulation model that provides the basis for an integrated theory of software markets. The novel approach overcomes the deficiencies of existing approaches such as Network Effect Theory or Models of Network Diffusion, which do not sufficiently explain the phenomena of modern software markets. Here, the focus is on software for data manipulation, storage, and/or transmission in the corporate world. Based on a study of the largest 1000 German and US companies, the author presents a comparative analysis of the market for enterprise resource planning systems, Electronic Data Interchange (EDI) solutions, and office communication applications. By integrating empirical, theoretical and simulation results von Westarp provides buyers and sellers of software products with valuable and insightful managerial advice.
