Governance Strategies to Drive Complementary Innovation in IoT Platforms: A Multiple Case Study

Abstract

The widespread uptake of the Internet of Things spurred both software and hardware firms to compete for platform leadership. Information systems research has acknowledged that a platform's success depends on the innovational output of its ecosystem of firms. However, the question whether platform owners should coordinate these firms through cooperative or competitive strategies to create complementary applications remains unaddressed. To address this gap, an exploratory, multiple case study of four German companies with IoT platforms was conducted. Five of the six governance strategies derived from the literature were confirmed: opening, alliancing, coring, entering, and pricing. In these strategies, 19 distinct governance mechanisms and their positive or negative effects were identified. The findings contribute to research on business-to-business platforms by demonstrating that cooperation between platform owners and complementors represents the dominant meta-level strategy in IoT platforms.

From real-time visibility to operational benefits – tensions on unfinished paths

“…Previous studies have explored the relationships between real-time visibility and the Internet of Things (de Vass et al, 2020;Fahim et al, 2021;Lee and Rim, 2016;Lee and Lee, 2015). Marheine (2020) did not attempt to explain how to unlock value from complementors and ensure successful platform execution and successful governance that can reduce the asymmetry effects and increase the willingness of complementors to manage the B2B IoT digital platforms successfully. Hein et al (2020) suggested from an ecosystem perspective, it is pivotal to understand how firms can integrate their existing network of stakeholders from a goods-dominant perspective of creating value to a services-dominant view of co-creating value.…”

“…The willingness of freight forwarders to exert control significantly contributes to tension competition versus collaboration in the relations between the freight forwarders and a platform owner. Other studies on the IoT platforms did not identify tensions (Marheine, 2020) but discussed governance strategies. The scholars call for research on how platforms balance seemingly conflicting tensions (e.g.…”

“…Scholars have paid very little attention to understanding the governance and tensions of a platform for real-time visibility and industrial digital platforms that are integrators of resources from carriers and telematics. Most insights on governance strategies and their effectiveness in driving complementary innovation talk about business-to-consumer (B2C) platforms (Marheine, 2020). Despite the increasing significance of platform-based business models, a clear understanding of the interplay of platform strategies, ecosystem conditions, and governance of platforms is essential.…”

“…, 2021; Lee and Rim, 2016; Lee and Lee, 2015). Marheine (2020) did not attempt to explain how to unlock value from complementors and ensure successful platform execution and successful governance that can reduce the asymmetry effects and increase the willingness of complementors to manage the B2B IoT digital platforms successfully. Hein et al.…”