From the literature review and discussion on industry platforms above, we can appreciate that there are many similarities and relationships with other theo-retical concepts already reviewed in this thesis. Firstly, network effects as dis-cussed in Section 2.2.3 play a key role in attracting users to platforms, whether end users or complementors. Secondly, as also acknowledged by Cusumano (2010), platforms tend to have more than one market side to them with cross-side effects between users on different cross-sides, as described by Parker & Van Alstyne (2000, 2005); Rochet & Tirole (2003), and other authors in what is known as two-sided market theory (discussed in Section 2.4.3). Also they used the term ‘platform’ to refer to the entity that brings the different sides of the market together. Their perspective was mainly that of economics, however, not of technology or standardization. In today’s Internet media industries we can see that two market sides are often not enough to capture the complexity of relationships between platform users. As an example, online video por-tals need to attract end users, content producers, advertisers, and possibly a content aggregator on board to be successful. Thus, the classic problem of subsidization of market sides become significantly more complex.
We can also see that the concept of ‘business ecosystem’ (Moore, 1993) with its notions of cooperation and competition, occurring in varying degrees si-multaneously between firms, is closely related to that of industry platforms.
Also Brandenburger & Nalebuff (1996) discuss cooperation and competition, or “co-opetition”, and describe complementors as companies that make ancil-lary products that expand a platform’s market and make it more valuable to customers.
Cusumano & Gawer (2002) acknowledge that firms may often have ambivalent roles, being platform leaders in one context and complementors in another, and that some level of competition between platform leaders and complementors is often inevitable, especially when the platform leader chooses to expand the scope of its business operations. Although they did not use the term
‘ecosystem’ in their early publications, they have since likened the term to industry platform in the sense that ecosystems tend to form around industry platforms. In later publications, the theory of two or multi-sided markets is also referenced by Cusumano (2010).
Platforms, Communities, and Business Ecosystems as a System Muegge (2013) is one of the few authors who have explicitly recognized and dis-cussed the interrelatedness of the concepts platform, community, and business ecosystem, all of them relevant for an entrepreneur or would-be complemen-tor planning to offer products or services based on shared platform assets. In his example, neither a mobile application developer nor a provider of online services is choosing “just” a specific platform or community or ecosystem, but rather a “bundled system” comprised of instances of all three subsystem types.
In other words, choosing a platform often goes hand-in-hand with choosing a business ecosystem as well. Similarly, these choices also influence the choice of membership or participation in various communities, such as collaborative innovation communities and open source software communities.
According to Muegge (2013), research related to community innovation typ-ically examines the role of communities outside the boundaries of firms in creating, shaping, and disseminating technological and social innovations and providing valuable support to others. As an example, Boudreau & Lakhani (2009) discuss the circumstances under which companies should pursue and organize collaborative communities rather than competitive markets as the source for their outside innovation. Chesbrough & Appleyard (2007) have studied open innovation related strategy and management practices exten-sively.
The second body of relevant research on communities relates to open source communities and projects. West & O’Mahony (2008) have studied 12 open
source projects initiated by corporate sponsors and a further group of five projects originating from autonomous open source communities. Based on the obtained results, they argue that sponsors consider three design dimen-sions that together create a specific participation architecture or model of in-teraction and contribution in the community: 1) production (the way pro-duction processes are conducted), 2) governance (decision-making processes), and 3) intellectual property rights (allocation of rights to use the community’s output). They also distinguish between two dimensions of openness, namely transparency (i.e., allowing those outside the community to follow and under-stand a community’s production efforts) and accessibility (allowing external participants to influence a community’s production efforts). Further discus-sion of communities, a term with a plethora of definitions and disparate uses, is outside the scope of this thesis.
The main conceptual argument of Muegge (2013) is that platforms, communi-ties, and business ecosystems can be understood as different levels of analysis in a complex hierarchical system, and that architecture is the unifying concept linking the three levels together. Here, architecture is not meant in a tradi-tionally technical sense only but also as describing organizational structure and form as well as patterns of interaction. Therefore, Muegge (2013) de-scribes three levels of organization each involving a distinct type of actor: an organization of things (a platform), an organization of people (a community, such as a developer or user community), and an organization of economic actors (a business ecosystem), each representing organizational forms in an interconnected system as opposed to more traditional organizational forms.
Discussion
Muegge (2013) contends that for the most part, research and practitioner literature rarely considers platforms, communities, and business ecosystems together or observes their interactions in detail. Extensive bodies of research do exist on each topic individually, but they are kept largely separate due to differing publication venues. He argues further that the knowledge is scat-tered in many places such as practitioner books, specialized scholarly books, journal articles, and various online sources, making it rather difficult and time-consuming to collect and put all the pieces together. Yet, this is required to gain a holistic understanding of the status quo and ongoing developments in the topic area, not to mention actionable knowledge. This is largely also the gap that the author of this thesis sees in the current literature on industry platforms and business ecosystems. Thus, a key purpose for this thesis from a theoretical perspective is to bring together and, where possible, reconcile the latest research on platforms, two-sided markets, and business ecosystems into a holistic whole, a conceptual framework that would capture the essential
dimensions of analysis for the comprehensive study of business ecosystems and their success factors, and ultimately, guidelines for strategic decision-making.
Analysis Framework
In this chapter, an analysis framework is formulated that brings together and builds upon many of the existing concepts and frameworks discussed in the previous chapter. The goal of the framework is to capture both firm-level and ecosystem-level factors that enable value-adding complementary innovation in a thriving, vibrant ecosystem. The platforms on which complementary innovation is created and that mediate and facilitate transactions in a two or multi-sided market are analyzed as a key part of the framework. In particular, the art and practice of managing the platforms, communities of complementors and the broader ecosystem is of special interest.
In the following sections, each part of the framework is examined separately, but for a quick overview, the framework is illustrated in Figure 3.2, at the end of the chapter.