Opening Platforms: How, When and Why?

This paper has been published under the same title as Chapter 6 in Platforms, Markets & Innovation (ed. Gawer, 2009) pp 131-162

Harvard Business School Entrepreneurial Management Working Paper No. 09-030

29 Pages Posted: 7 Sep 2008 Last revised: 12 Jun 2014

Thomas R. Eisenmann

Harvard University - Entrepreneurial Management Unit

Geoffrey Parker

Dartmouth College

Marshall W. Van Alstyne

Boston University – Questrom School of Business; Massachusetts Institute of Technology (MIT) - Sloan School

Date Written: August 31, 2008

Abstract

Platform-mediated networks encompass several distinct types of participants, including end users, complementors, platform providers who facilitate users' access to complements, and sponsors who develop platform technologies. Each of these roles can be opened - that is, structured to encourage participation - or closed. This paper reviews factors that motivate decisions to open or close mature platforms. At the platform provider and sponsor levels, these decisions entail: 1) interoperating with established rival platforms; 2) licensing additional platform providers; or 3) broadening sponsorship. With respect to end users and complementors, decisions to open or close a mature platform involve: 1) backward compatibility with prior platform generations; 2) securing exclusive rights to certain complements; or 3) absorbing complements into the core platform. Over time, forces tend to push both proprietary and shared platforms toward hybrid governance models characterized by centralized control over platform technology (i.e., closed sponsorship) and shared responsibility for serving users (i.e., an open provider role).

Keywords: platforms, network effects, open innovation, standards, two-sided networks

Suggested Citation

Eisenmann, Thomas R. and Parker, Geoffrey and Van Alstyne, Marshall W., Opening Platforms: How, When and Why? (August 31, 2008). This paper has been published under the same title as Chapter 6 in Platforms, Markets & Innovation (ed. Gawer, 2009) pp 131-162; Harvard Business School Entrepreneurial Management Working Paper No. 09-030. Available at SSRN: https://ssrn.com/abstract=1264012 or http://dx.doi.org/10.2139/ssrn.1264012

Thomas R. Eisenmann (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Cambridge, MA 02163
United States

Geoffrey Parker

Dartmouth College ( email )

Hanover, NH 03755
United States
603-646-9075 (Phone)

HOME PAGE: http://engineering.dartmouth.edu/people/faculty/geoffrey-parker

Marshall W. Van Alstyne

Boston University – Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-358-3571 (Phone)

HOME PAGE: http://questromapps.bu.edu/mgmt_new/Profiles/VanAlstyneMarshall.html

Massachusetts Institute of Technology (MIT) - Sloan School ( email )

Center for Digital Business
5 Cambridge Center - NE25, 7th Floor
Cambridge, MA 02142
United States
617-253-0768 (Phone)

HOME PAGE: http://web.mit.edu/marshall/www/home.html

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