1. What is Business Ecosystem Business ecosystems are formed by large, loosely connected networks of entities. Like species in biological ecosystems, firms interact with each other in complex ways, and the health and performance of each firm is dependent on the health and performance of the whole. James F. Moore defines business ecosystem as "an economic community supported by a foundation of interacting organizations and individuals". This economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organisms also include suppliers, lead producers, competitors, and other stakeholder. The idea of business ecosystem is the same as of natural ecosystem. It is a system that can sustain itself without outside interventions. {draw:frame} 2. IT role in Business Ecosystem James Moore defines four stages of evolutionary of business ecosystem. {draw:rect} Each of the stage demands significant role of IT to evolve to the next stage, and especially IT plays a great deal in the last phase of renewal part. For example, when we look in to a manufacturing company, the ability to catch the customer's needs is significant in their business. Then the customer's needs and data of customers have to be shared with suppliers in order to produce appropriate types and amounts of products in appropriate time. To share the information between company and the suppliers IT is needed. These demand-driven economy trends provide the evidence that the IT will play a significant role in distribution channel. This paper will focus on the IT strategy in distribution channel. 3. Distribution channel Distribution is all about getting product/service to the right people at the right time with special consideration for profit and eff ...