Context dependent trade-offs around platform-to-platform openness
The case of the Internet of Things
Lars Mosterd (Student TU Delft)
Vladimir C.M. Sobota (TU Delft - Economics of Technology and Innovation)
G. van de Kaa (TU Delft - Economics of Technology and Innovation)
Aaron Ding (TU Delft - Information and Communication Technology)
Mark de De Reuver (TU Delft - Information and Communication Technology)
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Abstract
As digital platforms are dominating the digital economy, complex ecologies of platforms are emerging. While the openness of digital platforms is an important theme in platform studies, the openness between platforms has hardly been studied. This paper explores factors that affect decisions by platform owners to open their platforms to other platforms. The focus is on Internet-of-Things platforms for automotive and healthcare applications. According to the findings, platform owners make trade-offs on whether to open up on a case-by-case basis. We identify a complex array of factors relating to direct benefits and costs (e.g., revenues from selling platform data), indirect benefits (e.g., attractiveness of the focal platform to users) as well as strategic consideration (e.g., improving bargaining power towards other actors). How businesses make trade-offs on these factors depends on market-level context (e.g., maturity of the market and standards) and organizational context (e.g., strategic focus and business objectives). Our findings provide a basis for future studies on the openness between platforms, which will become increasingly important as platforms proliferate in every layer of the digital industry.
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