Managers in strategy and organization for innovation are increasingly confronted with the challenge to compete on the basis of complex technology platforms. Prominent examples, such as Microsoft Windows (operating systems), Google (Internet search engines), Facebook (online social networks), Sony PlayStation (video game consoles), Visa (payment cards), Wal-Mart (retail), Tesla Motors (electric cars) or Life Technologies (genome sequencing), demonstrate that platforms are pervasive in many industries. In fact, platforms represent one of three configuration models through which firms innovate and generate value. Thus, platforms are both a mechanism for value creation through innovation and value capture through appropriation. Their economic importance is substantial: in terms of market value, 60 of the 100 largest companies worldwide earn more than half of their income in platform markets.
The emergence of platforms reflects the growing interdependency between products and services and the increasing dispersion of innovation activities among many different actors, especially in rapidly evolving high-tech industries. It has been widely acknowledged in management theory and practice that in order to successfully commercialize innovations and create value for end users, platforms have to be embedded in an interrelated array of organizations, including suppliers, complementors, customers, competitors and institutions. Thereby, platforms constitute the foundation upon which a vast and diverse web of firms, commonly defined as a ‘business ecosystem’, develop and provide complementary products and services.
While the question of how platform owners can stimulate R&D activities by complementors has been tackled in the academic literature and evolved to a promising research field, a coherent concept of the managerial levers is still missing. This motivates the following research question: “What firm-level and industry-level determinants of platform-centric ecosystems encourage or impede complementary innovation by third-party organizations?” Accordingly, the main objective of this thesis is to conceptualize an integrated view of the defining elements of platform ecosystems and their implications for the innovation orientation of complementors. In addition, this thesis aims to test and build on the proposed theoretical framework empirically by investigating the high-tech industry platform ecosystems of Amazon Web Services (AWS) and Advanced RISC Machines (ARM).
Table of Contents
1 Introduction
1.1 Research field and relevance
1.2 Research question and approach
1.3 Outline
2 Theory
2.1 Platform-centric ecosystems
2.1.1 Product platforms
2.1.2 Industry platforms
2.1.3 Multi-sided platforms
2.1.4 Complementary innovation
2.1.5 Platform architecture
2.1.6 Platform participants
2.1.7 Platform dynamics
2.2 Platform management
2.2.1 Platform strategies
2.2.2 Platform organization and governance
3 Towards an integrated view: the determinants of platform-centric ecosystems and their implications for complementary innovation
3.1 Platform strategy
3.1.1 Degree of openness
3.1.2 Market organization for complementors
3.2 Platform organization
3.2.1 Verticality
3.2.2 Internal and interfirm organization
3.3 Platform architecture
3.3.1 Modularity
3.3.2 Technical boundary resources
3.4 Complementary asset position
3.5 Appropriability regime
3.6 Industry architecture
4 Examining complementary innovation in platform-centric ecosystems: in-depth case study research on ARM and AWS
4.1 Research methodology
4.1.1 Research design
4.1.2 Data collection and analysis
4.2 ARM, the next Intel? How the ‘fab-less’ and ‘chip-less’ licensor of processor IP designs created a leading semiconductor platform ecosystem
4.2.1 Company and platform ecosystem overview
4.2.2 Platform strategy
4.2.3 Platform organization
4.2.4 Platform architecture
4.2.5 Complementary asset position
4.2.6 Appropriability regime
4.2.7 Industry architecture
4.3 AWS, beyond e-retailing: how the online bookstore Amazon built a leading platform and partner ecosystem for cloud computing services
4.3.1 Company and platform ecosystem overview
4.3.2 Platform strategy
4.3.3 Platform organization
4.3.4 Platform architecture
4.3.5 Complementary asset position
4.3.6 Appropriability regime
4.3.7 Industry architecture
5 Discussion
5.1 Theoretical implications
5.2 Managerial implications
6 Conclusion
6.1 Summary of findings
6.2 Limitations and future research
6.3 Concluding remarks
Research Objectives and Thematic Focus
The thesis aims to identify and conceptualize the firm-level and industry-level determinants that influence complementary innovation in platform-centric ecosystems. By establishing a unified theoretical framework and empirically testing it through two case studies, the work seeks to clarify how platform owners can effectively encourage or impede innovation by third-party organizations.
- Theoretical integration of determinants in platform-centric ecosystems
- Analysis of platform strategy, architecture, and organizational design
- Evaluation of appropriability regimes and industry-level influences
- In-depth empirical investigation of ARM’s semiconductor platform
- Empirical analysis of Amazon Web Services (AWS) cloud platform
Excerpt from the Book
1.1 Research field and relevance
Managers in strategy and organization for innovation are increasingly confronted with the challenge to compete on the basis of complex technology platforms. Prominent examples, such as Microsoft Windows (operating systems), Google (Internet search engines), Facebook (online social networks), Sony PlayStation (video game consoles), Visa (payment cards), Wal-Mart (retail), Tesla Motors (electric cars) or Life Technologies (genome sequencing), demonstrate that platforms are pervasive in many industries (Evans et al., 2006; Gawer & Cusumano, 2002, 2014; Gawer, 2009c; Iansiti & Levien, 2004b; Shapiro & Varian, 1999a, 1999b; Tiwana, 2014). In fact, platforms represent one of three configuration models through which firms innovate (Baldwin & von Hippel, 2011) and generate value (Stabell & Fjeldstad, 1998). Thus, platforms are both a mechanism for value creation through innovation and value capture through appropriation (Jacobides et al., 2006; Teece, 1986). Their economic importance is substantial: in terms of market value, 60 of the 100 largest companies worldwide earn more than half of their income in platform markets (Eisenmann, 2007).
The emergence of platforms reflects the growing interdependency between products and services and the increasing dispersion of innovation activities among many different actors, especially in rapidly evolving high-tech industries (Gawer & Cusumano, 2002). It has been widely acknowledged in management theory and practice that in order to successfully commercialize innovations and create value for end users, platforms have to be embedded in an interrelated array of organizations, including suppliers, complementors, customers, competitors and institutions.
Summary of Chapters
1 Introduction: This chapter provides an overview of the research field, defines the research question, and outlines the overall structure of the thesis.
2 Theory: This chapter establishes the theoretical foundations by reviewing platform-centric ecosystems and core concepts of platform management.
3 Towards an integrated view: the determinants of platform-centric ecosystems and their implications for complementary innovation: This chapter integrates existing literature into a cohesive theoretical framework consisting of six determinants of platform ecosystems.
4 Examining complementary innovation in platform-centric ecosystems: in-depth case study research on ARM and AWS: This chapter applies the developed theoretical framework to empirical case studies of the semiconductor platform ARM and the cloud platform AWS.
5 Discussion: This chapter synthesizes the main findings and discusses the resulting theoretical and managerial implications.
6 Conclusion: This chapter summarizes the findings of the thesis, addresses research limitations, and suggests avenues for future research.
Keywords
Platform-centric ecosystems, Complementary innovation, Platform strategy, Industry architecture, Appropriability regime, Modular architecture, Ecosystem governance, ARM, Amazon Web Services, Business ecosystems, Third-party developers, Innovation management, Network externalities, Strategic management, Technological innovation.
Frequently Asked Questions
What is the core focus of this thesis?
The work investigates the firm-level and industry-level determinants of platform-centric ecosystems (PCEs) and how these factors specifically encourage or impede complementary innovation by third-party organizations.
What are the primary themes discussed?
Key thematic areas include platform strategy, platform organization, platform architecture, the position of complementary assets, the appropriability regime, and industry architecture.
What is the primary research question?
The central question is: "What firm-level and industry-level determinants of platform-centric ecosystems encourage or impede complementary innovation by third-party organizations?"
Which scientific methodology is utilized?
The thesis employs a deductive research approach, utilizing a qualitative multi-case study design. It analyzes existing literature to build a framework, which is then tested through pattern-matching using empirical secondary data from ARM and AWS.
What is covered in the main body of the work?
The main body consists of an extensive literature review to define platform concepts, the development of an integrated theoretical framework, and two detailed in-depth case studies of industry leaders ARM and AWS.
Which keywords best characterize the research?
The most important keywords include Platform-centric ecosystems, Complementary innovation, Platform strategy, Business ecosystems, and Appropriability regime.
How does ARM foster innovation through its platform architecture?
ARM uses modular IP designs and standardized interfaces, supplemented by technical boundary resources like design tools (APIs/SDKs), to transfer design capabilities to external firms, reducing their development costs and time-to-market.
What is the role of the APN in the AWS ecosystem?
The AWS Partner Network (APN) acts as a collaborative ecosystem that supports third-party developers through various programs, training, and a transparent pricing model, helping them to build and distribute their own cloud-based applications efficiently.
Why did the author choose ARM and AWS for the case studies?
These companies were chosen as "typical cases" within the ICT sector to test the theoretical framework and provide analytical generalizability, illustrating how both firms leverage platform dynamics to drive third-party innovation.
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- Konstantin Kugler (Autor:in), 2015, Complementary Innovation in Platform-Centric Ecosystems. An Entegrated View, München, GRIN Verlag, https://www.grin.com/document/300635
