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Co-Creation of Value in a Platform Ecosystem: The Case of Enterprise Software

MIS Quarterly, Forthcoming

67 Pages Posted: 1 May 2011 Last revised: 29 Oct 2015

Marco Ceccagnoli

Scheller College of Business at Georgia Tech

Chris Forman

Cornell University - Dyson School of Applied Economics and Management; Georgia Institute of Technology - Scheller College of Business

Peng Huang

University of Maryland - Robert H. Smith School of Business

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business

Date Written: April 27, 2011

Abstract

It has been argued that platform technology owners co-create business value with other firms in their platform ecosystems by encouraging complementary invention and exploiting indirect network effects. In this study we examine whether participation in an ecosystem partnership improves the business performance of small independent software vendors (ISVs) in the enterprise software industry and how appropriability mechanisms influence the benefits of partnership. By analyzing the partnering activities and performance indicators of a sample of 1210 small ISVs over the period of 1996-2004, we find that joining a major platform owner’s platform ecosystem is associated with an increase in sales and a greater likelihood of issuing an IPO. In addition, we show that these impacts are greater when ISVs have greater intellectual property rights or stronger downstream capabilities. This research highlights the value of interoperability between software products, and stresses that value co-creation and appropriation are not mutually exclusive strategies in inter-firm collaboration.

Keywords: Platform ecosystem, partnership, business value, sales, IPO, intellectual property rights, downstream capabilities

Suggested Citation

Ceccagnoli, Marco and Forman, Chris and Huang, Peng and Wu, D. J., Co-Creation of Value in a Platform Ecosystem: The Case of Enterprise Software (April 27, 2011). MIS Quarterly, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1824389

Marco Ceccagnoli

Scheller College of Business at Georgia Tech ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Chris Forman

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Peng Huang (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business ( email )

800 West Peachtree Street, NW
Atlanta, GA 30308
United States
404-894-4364 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://mgt.gatech.edu/wu

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