Power dynamics in software platform ecosystems

Abstract

AbstractIn software platform ecosystems, the technological and structural peculiarities vest the platform owner with an extremely powerful position that puts any complementor at the mercy of the platform owner's actions. Paradoxically, it is the self‐determination and proactivity of the complementors that determine the ecosystem's success through their surprising outside innovations. This study addresses this power paradox by unpacking the power dynamics between platform owners and complementors. Based on an exploratory multiple‐case study of six platform partnerships, we find that power in platform ecosystems unfolds as a reciprocal process of three interlocking cycles, in which both the platform owner and the complementors take an active role. The modus operandi of power in platform ecosystems is a “central power cycle” in which the complementors repeatedly evaluate whether to accept or reject the platform owner's domination power. Thriving partnerships sustain this central power cycle over time, which requires that the platform owner and the complementors dynamically adapt their wielding of power to the changing needs of the partnership (partnership adaptation cycle) or the ecosystem (ecosystem redefinition cycle). For the platform owner, this entails the occasional use of manipulation to favour a particular partnership or redefining the ecosystem's framework and sporadically wielding coercion in favour of the broader ecosystem. For the complementor, this entails over‐subjectification to entice the platform owner to wield its power in favour of their partnership. Our findings have important implications for platform ecosystem and power theory, as well as managerial practice.