Competing with Superstars: Does Exclusive Third-Party Content Discourage Complementary Innovation?

We study how the introduction of exclusive third-party applications affects competing complementors’ innovation strategies in platform ecosystems. In this study, we exploit the exclusive entry of Super Mario Run into the complementary app market of Apple’s iOS App Store in Autumn 2016 as a quasi-experiment. We collect monthly time-series data throughout the observation period. We find that complementors show heterogeneous innovation behavior after the entry. First, we demonstrate that affected complementors with a similar market position as the entrant follow a competition strategy for update releases in the affected niche market. Complementors who do not hold a similar market position reduce the number of updates for existing products in the affected niche market following a differentiation strategy. Finally, independent of the complementor’s market position, affected complementors follow a differentiation strategy for new app releases, increasing the number of new app releases in other categories

The Future of Digital Platform Design - The Case of the EU Platform Regulation Discourse

Digital platform research focuses on the mechanisms in digital platform ecosystems and the dynamics between platform owners, complementors, and end-users. Recent studies begin looking beyond the boundaries of narrow platform ecosystems. The development of the European Union’s Digital Markets Act (DMA) is a revelatory case to study this wider perspective of ecosystems and its dynamics. Hundreds of actors participated in discourses on the regulation, which aims to regulate so-called gatekeeper platforms that are alleged to be powerful, unfair to platform users, and incontestable for competitors. By means of a critical discourse analysis, we coded 1720 contributions on the proposed and adopted DMA between June 2020 and July 2022. We identify 72 positions and 16 narratives along 5 discourses. Our study creates a better understanding of a wider perspective of platform ecosystem structure that goes beyond the triangle of platform owner, complementors, and end users

The Coevolution of Platform Dominance and Governance Strategies: Effects on Complementor Performance Outcomes

Multisided platforms such as Apple’s App Store and Valve’s Steam become increasingly dominant when more end users and complement producers join their ecosystems. Despite their importance to a platform’s overall success, however, we know little about complement producers and how they are affected by a platform’s dominance trajectory: How does a platform’s increasingly dominant market position affect performance outcomes for complementors? We explore this question by conducting a multiple case study on four market leading platform ecosystems over several years. We discover that, as a platform becomes increasingly dominant, the platform sponsor’s governance strategies shift from being largely supportive of the wider complement population to becoming more selective and geared toward end users. These changes are associated with shifts in complementor performance outcomes. Although the value created at the overall ecosystem level increases as a platform gains dominance, average demand for individual complements decreases and becomes progressively concentrated. Furthermore, we find that prices for complements decline, whereas the costs complementors incur increase. These findings are particularly salient in the context of digital platform ecosystems, where platform sponsors can seamlessly alter their technological infrastructures and implement changes to extend and solidify their dominant positions.AMD Data Visualizatio

Relations Between Actors in Digital Platform Ecosystems: A Literature Review

Digital platform ecosystems are a popular field of study in information systems and an economic structure of significant importance worldwide. However, we know little about what relations exist between and among actors on digital platforms. Findings of mutually beneficial interactions, cooperation, and value creation contrast findings of power, dependency, control, governance, rules, and competition in the ecosystem. To shed light on this issue, we conduct a structured literature review of information systems and management literature. In 144 studies, we find 19 different relations between and among platform owner, complementors, and end-users. We contribute to research in three ways. First, by discovering that instability of roles on digital platforms explains dual roles and the dynamics of roles more holistically than concepts that account for specific dual roles. Second, by finding weighting in the relations. Third, by observing nestedness of relations

Professionalizing Small Complementors in a Heterogeneous Platform Ecosystem. A Logistics Case

Understanding digital platform ecosystems is a central theme in information systems research. Particularly complementors’ characteristics, motivations, and their heterogeneity are examined in contemporary research. However, little is known about heterogeneity across both sides of the platform market and how digital platforms enable interactions across these heterogeneous sides. With a single case study of a digital logistics platform’s ecosystem, we investigate how a platform enables interactions in a market exhibiting heterogeneity in the use of technology across both sides. We find cross-market-side heterogeneity, a new dimension in the relationship between platform owner and complementor. Our results suggest that platform owners offer auxiliary services that enable complementors to interact on an equal footing with consumers. We explain how platform owners can enable complementors to overcome the resulting differences in professionalization

HOW PARTS CONNECT TO WHOLE IN BUILDING DIGITAL GENERATIVITY IN DIGITAL PLATFORM ECOSYSTEMS

Generativity drives digital innovation and platform growth by engaging many other businesses with diverse digital skills and resources in a digital platform. As the proliferation of generativity research grows, the Information Systems (IS) literature demonstrates the basic understanding of this notion in the areas of properties of digital technologies, social events, and/or the interaction between these two without an integrated view of how generativity is raised to enable the digital innovation. Therefore, considering that digital platforms are a kind of ecosystem, we aim to develop a new understanding of this emerging phenomenon by employing a holistic perspective. Through the information ecology theoretical lens, we develop a digital generativity process model that explains how the technological and social resources interact to generate perpetual digital innovation in digital platform ecosystems (DPE). This study contributes to generativity research by providing a dynamic and holistic view of generativity formalization in DPEs

Tasapainoilu ekosysteemien välillä ja onnistuminen ekosysteemeissä – Tapaustutkimus komplementtituottajien strategioista alustakeskeisissä ekosysteemeissä

The ecosystem concept enables and demands expanding the focus of strategy making from individual companies to value systems in a novel way. Ecosystems are characterized by nongeneric complementarity and a lack of full hierarchical control. The construct has attracted growing interest in both academics and practitioners, but the focus of interest has mainly been directed to companies in leading positions of the ecosystems with the ability and responsibility to orchestrate the ecosystems. This thesis is an effort to not only present the most important characteristics of ecosystems, but to provide insight about the players that represent a majority in ecosystems, but have not been thoroughly understood previously, i.e. the complementors. The thesis builds on literature in strategy, but also on information systems literature to provide a summary of the most important themes for complementors. Specialization and multihoming enable companies to succeed in ecosystems, but they also come with some costs. Furthermore, there seems to be a tradeoff between them, which has not been widely explored or explicitly studied in prior literature, although early indications exist. The empirical case study of this thesis is inductive and exploratory in nature. Based on interviews from eight case companies that provide services to business customers in the software industry, and comprehensive analysis of the interview data, insights on complementor strategies regarding ecosystems are provided. The main theoretical contribution of this thesis is the identification of a divergence in the approach the complementors take to participating in ecosystems or platforms. The case companies either focus on a single platform or remain independent of platforms while participating in multiple platforms. The decision regarding platform participation is strategic in nature as platform-focused complementors and platform independent complementors differ in their key success drivers and the way their offerings relate to platforms. The organizations have aligned themselves to succeed with their platform participation decision. Furthermore, the way they are responding to changes in the operating environment, mainly driven by technology development and customer needs, differ. All in all, it seems that the way the case companies approach platform participation seems to be fundamentally interrelated with many characteristics of the companies. In addition to theoretical contributions, the thesis provides practical implications as advice to complementors. As the findings are context-specific to some degree, some limitations in applicability to other contexts are discussed. However, complementors in other industries where platforms are emerging and complementarity is nongeneric in a manner that requires continuous development of specialized capabilities that relate to platforms, may also find the advice useful.Ekosysteemin käsite mahdollistaa ja vaatii strategian tarkastelun painopisteen siirtymistä yksittäisistä yrityksistä arvoa tuottaviin systeemeihin. Käsitteen tärkeimpiä ominaispiirteitä ovat epägeneerinen komplementaarisuus sekä täyden hierarkkisen kontrollin puute. Ekosysteemit ovat herättäneet kiinnostusta niin tutkijoissa kuin ammatinharjoittajissakin, mutta kiinnostus on kohdistunut lähinnä ekosysteemejä hallitseviin yrityksiin. Sen sijaan komplementtien tuottajia, jotka edustavat suurinta osaa ekosysteemien yrityksiä, ei ole aikaisemmissa tutkimuksissa perusteellisesti tarkasteltu. Tämän diplomityön pyrkimyksenä onkin esitellä ekosysteemien tärkeimpiä ominaispiirteitä sekä luoda syvempää ymmärrystä komplementtien tuottajista. Tämä työ rakentuu niin strategisen kuin tietojärjestelmätieteenkin kirjallisuuden varaan, ja tarjoaa yhteenvedon komplementtituottajien kannalta tärkeimmistä teemoista. Erikoistuminen ja useampaan alustaan kuuluminen mahdollistavat komplementtituottajien menestymisen ekosysteemeissä, mutta näihin liittyy myös kustannuksia. Lisäksi, näillä vaikuttaa olevan vaihtoehtoinen suhde, jota ei ole aiemmassa kirjallisuudessa käsitelty syvällisesti, mutta josta on jo aikaisia merkkejä viimeaikaisissa artikkeleissa. Työn empiirinen tapaustutkimus on luonteeltaan induktiivinen ja eksploratiivinen. Löydökset perustuvat haastatteludataan, joka on kerätty kahdeksasta yrityksestä, jotka tuottavat palveluita yritysasiakkaille ohjelmistoalalla. Haastatteludatan perusteellisen analyysin perusteella tässä työssä esitetään löydöksiä komplementtituottajien strategioista ekosysteemeissä. Työn tärkein ja tieteellisesti arvokkain havainto on se, komplementtituottajat lähestyvät osallistumista ekosysteemeihin tai alustoihin kahdella erilaisella tavalla. Tapausyritykset joko keskittyvät yhteen alustaan tai pysyttelevät riippumattomina alustoista osallistuen useampaan alustaan samanaikaisesti. Päätös alustoihin osallistumisesta on luonteeltaan strateginen, sillä alustakeskittyneet ja alustariippumattomat komplementtituottajat eroavat toisistaan tärkeimmissä menestystekijöissään sekä tavassa, jolla niiden tarjonta suhtautuu alustoihin. Organisaatioiden sopeutuminen osallistumispäätökseen mahdollistaa niiden menestyksen. Lisäksi nämä erityyppiset yritykset eroavat kyvyssään vastata muutoksiin toimintaympäristössä, jonka kehitystä ajaa teknologian kehitys ja muutokset asiakkaiden tarpeissa. Kaiken kaikkiaan vaikuttaakin siltä, että tapausyritysten tapa lähestyä alustoihin osallistumista on perustavalla tavalla yhteydessä niiden ominaispiirteisiin. Tieteellisen arvon lisäksi diplomityön johtopäätökset tarjoavat käytännön ohjeita komplementtituottajille. Löydökset ovat kuitenkin kontekstisidonnaisia, minkä vuoksi työssä käsitellään rajoituksia löydösten soveltamisesta muihin konteksteihin. Rajoitukset huomioon ottaen myös muiden alojen komplementtituottajat voivat hyödyntää työn löydöksiä ja ohjeita. Ohjeet ovat erityisesti hyödyllisiä aloilla, joissa alustat kasvattavat merkitystään, ja joissa komplementit ovat epägeneerisiä niin, että komplementtituottajien on jatkuvasti kehitettävä alustoihin erikoistunutta osaamistaan

Platform Competition: A Systematic and Interdisciplinary Review of the Literature

Over the past three decades, platform competition—the competition between firms that facilitate transactions and govern interactions between two or more distinct user groups who are connected via an indirect network—has attracted significant interest from the fields of management and organizations, information systems, economics, and marketing. Despite common interests in research questions, methodologies, and empirical contexts by scholars from across these fields, the literature has developed mostly in isolated fashion. This article offers a systematic and interdisciplinary review of the literature on platform competition by analyzing a sample of 333 articles published between 1985 and 2019. The review contributes by (a) documenting how the literature on platform competition has evolved; (b) outlining four themes of shared scholarly interest, including how network effects generate “winner-takes-all” dynamics that influence strategies, such as pricing and quality; how network externalities and platform strategy interact with corporate-level decisions, such as vertical integration or diversification into complementary goods; how heterogeneity in the platform and its users influences platform dynamics; and how the platform “hub” orchestrates value creation and capture in the overall ecosystem; and (c) highlighting several areas for future research. The review aims to facilitate a broader understanding of the platform competition research that helps to advance our knowledge of how platforms compete to create and capture value

Essays on Business Value Creation in Digital Platform Ecosystems

Digital platforms and the surrounding ecosystems have garnered great interest from researchers and practitioners. Notwithstanding this attention, it remains unclear how and when digital platforms create business value for platform owners and complementors. This three-essay dissertation focuses on understanding business value creation in digital platform ecosystems. The first essay reviews and synthesizes literature across disciplines and offers an integrative framework of digital platform business value. Advised by the findings from the review, the second and third essays focus on the value creation for platform complementors. The second essay examines how IT startups entering a platform ecosystem at different times can strategically design their products (i.e., product diversification across platform architectural layers and product differentiation) to gain competitive advantages. Longitudinal evidence from the Hadoop ecosystem demonstrates that product diversification has an inverted U-shaped relationship with complementors success, and such an effect is more salient for earlier entrants than later entrants. Earlier entrants should develop products that are similar to other ecosystem competitors to reduce uncertainty whereas later entrants are advised to explore market niche and differentiate their products.The third essay investigates how platform complementors strategies and products co-evolve over time in the co-created ecosystem network environment. Our longitudinal analysis of the Hadoop ecosystem indicates that complementors technological architecture coverage and alliance exploration strategies increase their product evolution rate. In turn, complementors with faster product evolution are more likely to explore new partners but less likely to cover a wider range of the focal platforms technological layers in subsequent periods. Network density, co-created by all platform complementors, weakens the effects of complementors strategies on their product evolution but amplifies the effects of past product evolutions on strategies.This three-essay dissertation uncovers various understudied competitive strategies in the digital platform context and enriches our understanding of business value creation in digital platform ecosystems

Governance Mechanisms in Digital Platform Ecosystems: Addressing the Generativity-Control Tension

Digital platform owners repeatedly face paradoxical design decisions with regard to their platforms’ generativity and control, requiring them to facilitate co-innovation whilst simultaneously retaining control over third-party complementors. To address this challenge, platform owners deploy a variety of governance mechanisms. However, researchers and practitioners currently lack a coherent understanding of what major governance mechanisms platform owners rely on to simultaneously foster generativity and control. Conducting a structured literature review, we connect the fragmented academic discourse on governance mechanisms with each aspect of the generativity-control tension. Next to providing avenues for prospective digital platform research, we elaborate on the double-sidedness of governance mechanisms in fostering both generativity and control